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Us Debt Spree Continues

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The reason:

"One major reason that consumers felt confident in spending all of their disposable incomes and dipping into savings last year was that a booming housing market made them feel more wealthy. As their home prices surged at double-digit rates, that created what economists call a "wealth effect" that supported greater spending."

1929 all over again. :o

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And UK banks have now quietly begun to reduce the rates they are giving to savers almost as if, IMPO, they wish to pressurise those savers into climbing onto the mortgage and debt bandwagon. Of course, it could simply be desperation to keep their ridiculously high profits going just that little bit longer!?

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The reason:

"One major reason that consumers felt confident in spending all of their disposable incomes and dipping into savings last year was that a booming housing market made them feel more wealthy. As their home prices surged at double-digit rates, that created what economists call a "wealth effect" that supported greater spending."

1929 all over again. :o

This was said about the UK years ago, however it was found that people had far greater other assets such as property abroad. Investing in pathetic little savings plans is a perculiar endeavour. Amazes me all the petty white middle class types on investment forums that prattle on about pointless cash ISAs etc, when they ought to be a little more free thinking.

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"Of course, it could simply be desperation to keep their ridiculously high profits going just that little bit longer"
!?

Absolutely right. No loans = no pay. And do you think that the commission hungry VIs care about the financial backers for the easy money? Nope.

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"One major reason that consumers felt confident in spending all of their disposable incomes and dipping into savings last year was that a booming housing market made them feel more wealthy. As their home prices surged at double-digit rates, that created what economists call a "wealth effect" that supported greater spending"

RUBBISH!

55% of the American public believe that the Economy is doing badly. The above paragraph puts a positive spin on the situation, it implies that Americans are choosing to spend all of their savings and rely on MEWing to fund purchases.

Nothing to do with wage stagnation, and the fact that the majority of the job creation in the US in recent years has been of the low quality part time 'burger bar' variety!

Let me re-write the first sentence above "One of the major reasons that US consumers were forced to burn up savings and even resort to further secured borrowing last year was wage stagnation and job insecurity"

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This was said about the UK years ago, however it was found that people had far greater other assets such as property abroad. Investing in pathetic little savings plans is a perculiar endeavour. Amazes me all the petty white middle class types on investment forums that prattle on about pointless cash ISAs etc, when they ought to be a little more free thinking.

For the short to medium term (1-4 years) at least the ISAs seem a good way to go. Around 4.5% tax free with no risk looks better than investing in a BTL with negative cash flow and poor capital appreciation. Warren Buffet has been extolling the virtues of going to cash as he feels that the housing bubble will bring down a lot more than just house prices.

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What is better – save money in the bank and get about 3% after tax

Or get a mortgage and actually live in something you own but pay 6% on what you don’t own.

I liked it better when interest rates were 8% ish and you actually noticed the interest on your bank statements.

I think we are going through the largest inflation period that I have seen - yet inflation is rated at about 2.1%

Is it possible that we are through the worst of the inflation problems and at the end of the year we will see inflation come back down to 1.5% (presuming there are no attacks on oil)

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I think we are going through the largest inflation period that I have seen - yet inflation is rated at about 2.1%

Is it possible that we are through the worst of the inflation problems and at the end of the year we will see inflation come back down to 1.5% (presuming there are no attacks on oil)

I agree that we are seeing one of the greatest inflationary periods ever, but I also think that we have seen systematic fiddleing of the inflation figures to coverup the extent of the inflation.

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Amazes me all the petty white middle class types on investment forums that prattle on about pointless cash ISAs etc, when they ought to be a little more free thinking.

Yup, everyone knows they should have a shares in maxi-ISA instead with a good spread between equities and resources.

What?!? :unsure:

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the whole thing just seems like an accounting sleight of hand... "massive debts? ah but you have to offset that against the value of their assets!"

hmm, but those assets are only valued so highly because this debt has been created to purchase them. The debt is a legally binding and enforcable arrangement between lender and borrower - the asset value is purely notional. Merv put it better than that though ;)

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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