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No One Does Ponzi Like Government Does Ponzi

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So we had a bust in 2008 fueled by the excesses and unrestrained banking industry (with the nod of Gordon Broon).

Now we are having another housing boom fueled no less by the might of the Government and its myriad of housing props with the central bank in support.

My question is how much further can this go? - I tend to think that this ponzi will get to eye watering levels that will shame the thickest of skins before it does collapse.

What is the limit to this absurdity?

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So we had a bust in 2008 fueled by the excesses and unrestrained banking industry (with the nod of Gordon Broon).

Now we are having another housing boom fueled no less by the might of the Government and its myriad of housing props with the central bank in support.

My question is how much further can this go? - I tend to think that this ponzi will get to eye watering levels that will shame the thickest of skins before it does collapse.

What is the limit to this absurdity?

It's limited by the younger generations willingness and ability to buy into the scheme.

Schemes like HTB might help a few people onto the market but it's already pushed it beyond pretty much everyone now.

We're already seeing 30 somethings with no homes and no chance of affording homes.

These people are now awakening to the issue and will start to put pressure on government.

Either that or it's a full blown crisis.

I know which I expect first :lol::lol::lol:

Edited by TheCountOfNowhere

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HTB was introduced not all that long ago to obviously help people buy very expensive homes they could not afford. In a very short time we have again reached that level where have very expensive homes that people can not afford, what next?

HTB on steroids

It is just shocking how some people just cannot see the problem

Well, we've seen the future....20% HTB in London -> 40% HTB in London.

These people undoubtedly do see the problem, they just dont care. Their friends/funders/fugture employers are making money hand over fist out of their policies IMHO.

It's criminal if you ask me

But like the 2007 collapse, the limit will be reached.

Looking at the crazy 2007+40% asking prices round the country I would say that limit has been reached, hence why I fully expect something to give this year.

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It's limited by the younger generations willingness and ability to buy into the scheme.

Schemes like HTB might help a few people onto the market but it's already pushed it beyond pretty much everyone now.

We're already seeing 30 somethings with no homes and no chance of affording homes.

These people are now awakening to the issue and will start to put pressure on government.

Either that or it's a full blown crisis.

I know which I expect first :lol::lol::lol:

it was the market moving its ladder away from the ftb ers which helped to trigger previous crashes (along with finance elastic snapping).

However what we laughingly call the market has cleansed these out by being out bidded by speculators, and then when the credit limits were reached these too got took over by cash buying speculators.

How long till the crash/correction happens depends on how long the parasites/speculators can afford to hold on to their investments I suppose. When the limits to that are approached mind, the fall out will be mind blowing.

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It may not end so quickly. What we have is good old fashioned inflation, but whereas previous inflations (Weimar Republic etc) were in normal goods, this one has been focussed on assets - of all classes around the world, but in the UK concentrated on property. The shift is because, in the past the newly printed money leaked into the normal economy; now it's generated through loans on assets.

So, how long can it go on? As long as the bank/mortgage-driven computerised printing presses keep going.

Or am I wrong?

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It may not end so quickly. What we have is good old fashioned inflation, but whereas previous inflations (Weimar Republic etc) were in normal goods, this one has been focussed on assets - of all classes around the world, but in the UK concentrated on property. The shift is because, in the past the newly printed money leaked into the normal economy; now it's generated through loans on assets.

So, how long can it go on? As long as the bank/mortgage-driven computerised printing presses keep going.

Or am I wrong?

People still need to buy into it.

People still need to service the debt.

I look at the prices in Northants/Wets mids and for a rotten crappy family home we are talking 10x to 20x average salary.

Even with low interest rates this is untenable.

Sure, most buying are doing so with free untaxed equity in their homes but the debt to support it is being pushed onto the young ( taxed ) people albeit via BTLers and their mortgages.

The abolity to take on/service debt is finite.

If we see 100% HTB loans then what is that...very very expensive council housing.

The tone of the media has change recently though so you get the feeling people have had enough of this lunacy. There's probably many a 50 year old couple sat with 2 debt ridden uni graduates who have no decent job and no hope of leave their household. Wouldn't you vote for cheaper cost of living ( aka house prices ) ?

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I am posting about this very same subject on other internet sites right now.

You hear the old sayings about history repeating itself, but to be repeating the very same mistakes we did in what feels like yesterday in 2007/08 is just mind blowingly stupid.

Yes we have a £27 Billion a year Housing Benefit bill we cannot afford, yet Cameron is actively keeping it that high in order to keep house prices as high as they are in order to save the banks.

It's what his Daddy would have wanted the B anker

I thought that he was trying to cut it (I think he is incompetent not evil but I respect those who disagree).

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Hmmm. I've been a (strong) bear since 1999, and agree houses are massively over-valued. But will it end, and soon?

Most buyers now are investors, looking for rent - and in much of the country, rents can more-or-less cover debt servicing and other costs. Even if prices slipped 20%, or the pound fell by that amount, many would just see it as a buying opportunity, since rents would then more than cover costs.

But we know prices have crashed in the past, and those things could happen again.

So what has triggered crashes in the past? I would three things:

1 - Significant increase in expected interest rates;

2 - Tax changes;

3 - Significant increase in supply.

Any of those likely soon?

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Greatly depends on who succeeds Cameron as Tory leader and probably pm.

Osborne, or Boris => more of the same

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Someone on here once used the term "Council TV" when referring to Sky, it's a good meme and it should be used whenever you can in polite conversation.

Similarly, HTB should always be referred to as Help To Sell - it was never about helping buyers :)

Brilliant he he

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Ponzi did it better.

Did he? How so?

Governments have made ponzi theft legal and compulsory - does it get any better than that?

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"It's like having a blanket too small for the bed, you pull it up above your chest and your feet stick out", Not sure if Mourino or Benitez said this.

This is how I see the governments policies on the housing crisis, they are trying to keep prices artificially high as home owners need HPI to buy into the idiotic system. Whilst trying to keep FTB's in touch with the market, through lots of stupid schemes. It seems like the blanket is fraying, shrinking and coming apart at seams with the bloated fat housing market lying underneath it getting fatter. When it finally breaks I've no idea, but one thing is for sure they won't put the housing market on a diet and make it healthy. It's the blankets fault!

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Someone on here once used the term "Council TV" when referring to Sky, it's a good meme and it should be used whenever you can in polite conversation.

Similarly, HTB should always be referred to as Help To Sell - it was never about helping buyers :)

I prefer the term dole dish

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Anecdotal: 27 year old colleague has 350k to spend (BOMAD) and was shocked when she viewed a grubby, small 2 bed flat in Homerton for that price. There was even a drugs raid going on down the street! But still doesn't put her off, now looking in Walthamstow. When people refuse to pay such insane prices we may get a crash.

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People lost faith in the banks when the realisation dawned they were saddled with more debt than they could be repaid. The state then stepped in and 'rescued' them and everything is quickly forgotten.

I think it will take the same scenario again. When the banks were starting to wobble it started to manifest itself with BACS payments taking longer than usual and online banking mysteriously out of action. I think it will be something similar with the state, signs of fraying round the edges, then suddenly everyone loses confidence and a crisis ensues.

In the Russian currency crisis, during the nineties, I think it was state pensions suddenly not being paid on time that tipped things into a full blown panic.

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Sentiment is also important .... one day people turn round and think; it's just not worth it. I suspect this is why most bubbles pop, tulip, south sea etc based on sentiment that prices will always rise .... until they don't. Eg I would be very worried if I had a commitment to buy a studio flat in SW8 for 1,000,000, a year ago and I would have been looking for a 30% tax free profit.

Exactly.

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Anecdotal: 27 year old colleague has 350k to spend (BOMAD) and was shocked when she viewed a grubby, small 2 bed flat in Homerton for that price. There was even a drugs raid going on down the street! But still doesn't put her off, now looking in Walthamstow. When people refuse to pay such insane prices we may get a crash.

+1. How can people see this as worth it? I pay quite high rent but £350k would still paid my rent (on a 3 bed flat) for almost 27 years? No paying for repairs or anything else. Do people really think that this sort of money is a fair hedge vs rising rents?

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+1. How can people see this as worth it? I pay quite high rent but £350k would still paid my rent (on a 3 bed flat) for almost 27 years? No paying for repairs or anything else. Do people really think that this sort of money is a fair hedge vs rising rents?

It's very important you raise this point.

To think along your lines took me a while. My Austrailan history teacher taught us your way of looking at things and it kinda stuck later on in life.

Many here will wonder how people can't see this but let me say if you don't know, well now you know just how much this property obsession is ingrained in most levels of public psyche.

Money paid in rent is wasted; why pay off someones mortgage along with not doing what you want to the property and being beholden to rent rises and being kicked out.

Buy. Even if you move or buy a hovel or don't want a mortgage, you can just cash in on the capital gains. Property, esp. in London will only ever go up. look at Brixton, and East london. buy now.

I'm lucky that my family supported my decision not to jump in. i worked and got a good job and next came the calls for me to be homeowner extrordinaire and join the club and get married.

When i researched and came to this site and read as many sides of the debate, only then did I see renting the way many on here see it; In this climate, Renting is a little pain or common sense compared with the alternative of buying an uninformed gargantuan gamble of a noose I don't really need which could be yanked to leave me high and dry and up a 118property creek without a paddle.

i do want to buy, but you are right that Walthamstow aint't worth a 2 or 1 bed flat at 350k. People buy because they are fed the narrative i was. Rent is wasted money. Prices only go up in London. therefore buying Anywhere and Anything at Your Max price is better than buying nothing.

Do it. do it now. Buy a house. Buy in an overpriced area you don't ever want to live in.

Buy now. Buy Everything.

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