Jump to content
House Price Crash Forum
Sign in to follow this  
Guest Winners and Losers

Global Recession

Recommended Posts

No, it can't go on.

Simply, the US can't go on consuming more than it produces, and China can't go on over-investing.

Why? Even the US has a debt threshold, and by over-investing there will be deflation/recession in China at some stage.

The result, the US won't be able to import so much, and China will go into recession. US interests rate will go up, and the US will go into recession.

The global imbalances will correct, but it will be painful. I only hope that it happens sooner rather than later, as it will be even more painful later.

The only action to stop this happening is for the Eurozone economy to pick up dramatically and suck up the imports from China, taking the weight of the US and allowing its deficits to reduce. I can't see this happening though with the economic structure of Europe the way it is.

If something like this doesn't happen within the next 5 years, then I think the laws of economics will need to be changed. Such as you can't create wealth out of thin air.

Share this post


Link to post
Share on other sites
Guest Winners and Losers

So please, and I'm begging now, why if house prices are falling in other major western economies, is the UK immune? What is the difference here? Is just that the sheeple are more gullible?

Share this post


Link to post
Share on other sites

Very good article here:

http://www.project-syndicate.org/commentary/stiglitz66

From Joseph Stiglitz:

The almighty American consumer had another banner year in 2005, helping sustain global economic growth, albeit at a slower pace than in 2004. As in recent years, he consumed at or above his income level, and the United States as a whole spent well beyond its means, borrowing from the rest of the world at a feverish pace in 2005 – more than $2 billion a day.

A year ago, most pundits argued that this was unsustainable. It evidently was sustainable, at least for one more year. But it nonetheless remains true that whatever is unsustainable will not be sustained, which creates great risks for the US and global economy in 2006.

...

But it is more likely that 2006 will just be another year of malaise: China’s significance within the global economy is still not large enough to offset weaknesses in the rest of the world. America, too, will manage to muddle through again – leaving even higher levels of debt for the future.

In short, 2006 will be marked by mounting uncertainty about prospects for global economic growth, even as the distribution of the fruits of that growth remain dismally predictable. In America, at least, 2006 is likely to be another year in which stagnant real wages freeze, or even erode, the living standards of those in the middle. And, everywhere, it is likely to be another year in which the gap between the haves and the have-nots will widen.

Share this post


Link to post
Share on other sites

The only action to stop this happening is for the Eurozone economy to pick up dramatically and suck up the imports from China, taking the weight of the US and allowing its deficits to reduce. I can't see this happening though with the economic structure of Europe the way it is.

Maybe Gordon Brown will announce a policy of building tens of thousands of new "pound shops" throughout the country.

Billy Shears

Share this post


Link to post
Share on other sites

So please, and I'm begging now, why if house prices are falling in other major western economies, is the UK immune? What is the difference here? Is just that the sheeple are more gullible?

I'm not sure about more gullable, but as a French colleague puts it to me "You British are born with a brick in your stomach"

What he means is, we have a stigma about renting thats wider than the channel. So untill the debt becomes unservicable, which, with the exception of the usuall dross of society who are bumping the bankrupcy figures up and will always be in some form of schtook or another, there homes will be the last thing people give up. Especially now in what is a very "must have, fake it 'till you make it" society.

They simply will not be seen to have 'failed' if they can help it, and nothing says you've failed more than getting your house whipped off you or 'having' to rent! Perception here is renting is fine when your a student or in your 20's starting your career, but after that? Forget it. Big fat failure. :D

Share this post


Link to post
Share on other sites

Me and my missus have done our fair share of renting. We have owned a couple of properties, both of which have been okay but not great. Both bought under pressure of other people buying in a frenzied market (London in 1999 and north of Bristol in 2002).

In fact we have always been more happier when we have rented. There is less sh*t to worry about and less weekends spent down at B&Q.

The best thing of all is mobility - at least while you don't have children it is easier to change jobs and move around. Plus you can afford to live in a desirable area rather than 2nd or 3rd best!!

We won't get back into the market unless we are 100% sure about a property. The upfront costs are high and it is a real commitment.

In the longer term it might actually be better for us to buy a property in a reasonable area with good rental potential (if there are any left) and carry on renting properties ourselves.

Although I admit we shall have to see I realise that things change a lot when people start families. What we really need is better renting laws for tenants in this country (better than short 6 month assured).

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.