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John The Pessimist

Hedging The Hpc

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We appear to be having one of those periods where there's lots of chat about imminent HPC.

http://www.housepricecrash.co.uk/forum/index.php?/forum/22-house-prices-and-the-economy/

What does the HPC hive mind plan to do with their various deposit funds etc to protect it during any forthcoming instability?

Personally I'm weighing up moving significant amount of EUR into GBP. I'm also planning to off-load a portfolio of defensive shares. So I'm looking at going all in on GBP.

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We appear to be having one of those periods where there's lots of chat about imminent HPC.

http://www.housepricecrash.co.uk/forum/index.php?/forum/22-house-prices-and-the-economy/

What does the HPC hive mind plan to do with their various deposit funds etc to protect it during any forthcoming instability?

Personally I'm weighing up moving significant amount of EUR into GBP. I'm also planning to off-load a portfolio of defensive shares. So I'm looking at going all in on GBP.

Buying a house.

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We appear to be having one of those periods where there's lots of chat about imminent HPC.

http://www.housepricecrash.co.uk/forum/index.php?/forum/22-house-prices-and-the-economy/

What does the HPC hive mind plan to do with their various deposit funds etc to protect it during any forthcoming instability?

Personally I'm weighing up moving significant amount of EUR into GBP. I'm also planning to off-load a portfolio of defensive shares. So I'm looking at going all in on GBP.

I'm quite minded to try and avoid being subject to bail-ins. Have even purchased some premium bonds.

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Apparently the best performing assets historically have been gold, land and art. Going all in to GBP is no good if we QE our way to massive inflation. All sovereign governments and central banks are on a knife edge of solvency.

True, GBP is risky, but it's also the medium in which I'm most likely to buy a house. Even if my defensive shares outperform the indices, in the event of an equity crash, they'll still only be the prettiest horse in the glue factory. My Euro are from STRing a house in Dublin. Prospects for the EUR are poor right now.....

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Apparently the best performing assets historically have been gold, land and art. Going all in to GBP is no good if we QE our way to massive inflation. All sovereign governments and central banks are on a knife edge of solvency.

Which is why they may need HPC and all the good things which come from it. Bonfire of the Boomers (wealth-equity) - from Japan to US prime to UK low-mid-high prime. £300K-500K houses owned outright / near outright, of which there are so many.. might be smugness for the owners, but not earning the banks anything.

More housing transactions, more lending in volume, profits for banks (which can generally handle hard hpc) and have offloaded/smoothed a lot of positions out to wider yield-fury-chasing market at ever higher prices.

Where's the inflation (except in house prices). Velocity is weak and weakening.

June 11, 2014

Deputy BoE Governor, Broadbent.

"Andy [Haldane] is the master of the colourful phrase but on this I disagree with him," said Broadbent, who instead identified risks in the UK's housing market as the greatest threat to the country's economic outlook. He went on to say that the Bank will not directly intervene on house prices, but is instead only interested in "the rate of growth of mortgages, which is today very low".

http://www.cityam.co...ace-mp-grilling

2 October 2014

Ben Broadbent agrees that interest rate rises will cause problems for "a certain number of borrowers" but is clearly of the view that the concern has been overdone.

He points out that the total amount of debt in the economy is actually lower than it was five years ago.

"I would lean against the view I think that any rise in interest rates would cause calamity for a very large number of households. I think that's an exaggeration of where we are at the moment," he told me.

Broadbent doesn't think higher interest rates will lead to a significant rise in the number of repossessions.

If the owner side/VI side can parade about with these ultra extreme prices (and £Trillions in equity) vs younger generations being pushed into the sea/off the cliffs on price... something can give... even if the VI only see more HPI in a sickly market.

xknp69.jpg

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What does the HPC hive mind plan to do with their various deposit funds etc to protect it during any forthcoming instability?

Personally I'm weighing up moving significant amount of EUR into GBP. I'm also planning to off-load a portfolio of defensive shares. So I'm looking at going all in on GBP.

Wow, what is your thinking behind this? I have been thinking about buying some more defensive shares and moving some cash out of GBP!

Oh, and don't forget gold and silver, if you see some real instability!

Edited by renting til I die

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Wow, what is your thinking behind this? I have been thinking about buying some more defensive shares and moving some cash out of GBP!

Oh, and don't forget gold and silver, if you see some real instability!

Yes, GBP is the last place I want to be if it all goes tits up.....

The result I strongly think the UK VI's want is a nominal flatline in GBP in houseprices whilst the pound collapses against other currencies making UK plc more competitive and generating a mini boom in wages in the devalued currency as a result!

I'd say the old favourite of gold/land is the least worst - but timing is everything. If I had a lump sum in GBP I would at the least move half into USD as the first stages of any emergency are likely to see a flight to dollars.

disclaimer: DYOR, not financial advice

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Peter Schiff's bank, Euro Pacific allows you to have several currencies on an account, while being offshore with 100% deposits covered. Then you could have a selection of currencies. Kind of like a selection of several wines. Or cheese. Or fiat toilet paper. :P

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Defensive stocks (food & bluechip manufacturing) will fall in value, albeit less so than the rest of the index. I'm trying to maintain value so that I can buy in the event of a HPC.

Likewise, most of my cash currently sits in EUR. I'm assuming that most effects of a Grexit are now priced in, so I'm happy to sit out for the moment. However, I'll have to convert to GBP when I decide to buy (and probably several months beforehand so it can sit in an account here and be 'visible').

That is my thinking!

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