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pyewackitt

How Bad Will The Crunch Be?

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Hi all.

It's my opinion that the scale of the upturn in the last ten years will be met by a pretty huge downturn following the classical 'two steps forward - one step back' economic model :P

We've had the boom and the boom has been shared accross more countries than eveer before due to synchronised economic cycles - but what are you expecting?

I'd like to know what all the HPC'ers out there think.

To clarify:

UK recession - indicates the classic economic terminology of two quarters of negative growth

Global recession - indicates the above situation in the majority of major developed countries i.e. OECD nations.

- Pye

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I'm going to stick my neck out here.

Unprecedented HPC of >50% but not a significant effect on UK GDP, maybe a short and slight recession. The reason is that although many will be burnt the effect of HPI has been to redistribute wealth, not destroy it. The winners will offset the loosers.

Could be wrong though :unsure:

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Market cylcing is about a transfer of wealth.

From the masses to a few. The few being those aware of it.

Most people think recessions 'just happen' almost out of the blue!!

This is because most people suffer a lack of understanding, if you are aware of our position in the cycle (which very few people are) then you can take advantage of movements.

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What wealth will there be to redistribute?

UK GDP is already at one of its lowest levels in the last couple of decades. If the only growth and fuel of consumption in the UK for the last five years has been because of credit and HPI then a HPC won't be able to re-allocate wealth... the wealth will simply cease to exist except in the form of negative equity or further debts.

Even the banks wouldn't be happy because of the huge number of defaults one might reasonably expect... essentially saying that the only group who would get the redistributed wealth i.e. repossessions would be out of pocket due to firstly the asset price declining and secondly the lack of interest on that asset.

- Pye

EDIT: Just re-reading this I realise you're probably talking about wealth redistribution AFTER the recession... well yes... there will be some of that for those who bought at the low point.

But its not guarenteed this will occur anytime soon - Japan and its 14 year downwards spiral a case in point.

Edited by pyewackitt

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there will be a recession, we can see that a small one followed the 1989 crunch.

If it was back to the days of an unmanaged economy (Okay, knowing how they will manage it at crunch.. this is not a very well managed economy at the moment.) Then we would see no house price dip, but affordability achieved by massie wage push inflation, this is what happenend in the pre 1989 crashes..

Bulls are right when they say that house prices never dropped pre 1989, but they always become affordable and massive wage push inflation tore the country to shreds..

Mervin King has promised this will not happen, that he will resist inflation (granted wages only, everything else can cost us more it seems.. of look I can buy a DVD player for £30 but my council tax has doubled as has my road tax... Rant.. must resist Rant.....)

So big drops to bring the affordability, and a smaller recession then otherwise..

do house prices cause recession? Or are they the last assett bubble at the top of the economic cycle pre down turn?

that is something that can be argued.

that there is an economic cycle and that House prices will become affordable again cannot be argued.

That Merv has promised no wage inflation means that prices will drop.

and a hopefully little recession.. (as in not a big recession, I am not praying for a recession)

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UK GDP at lowest level for last couple of decades? I must have missed that 20 year recession to reduce our GDP in 1985 to today's level, even if you mean growth that isn't really true. :rolleyes:

The banks not happy with the level of defaults, hmmm, must be some hidden downside I can't see :P

Seriously though, all that is happening is that wealth is transferred from the under 40 generation to the over 50's. The boomers will be more than happy to continue spending this unearned wealth, if your lucky they might even let you have some of it back, only a bit mind, to help you onto the property ladder.

Don't see how this is going to screw the economy though, under 40's will have to keep working to pay off their negative equity, over 50s will keep spending it.

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How Bad?

From http://www.rense.com/general69/econm.htm

The world has experienced some of the greatest shift of wealth in recent history, from the Anglo-Saxon nations who have dominated the global economy for the last 200 years, to Asia and Continental Europe. This shift in wealth will shortly result in the economic collapse of the Anglo-Saxon nations their money will become worthless, and their economies will disintegrate into anarchy and poverty. This collapse will also have disastrous consequences to the Asian economies, which have become depended on exporting to the North American market to support their domestic growth. While the Asian economies will be severely affected from the collapse of the Anglo-Saxon economies, they will survive and recover.

The future for the Anglo-Saxon people looks bleak. The sudden withdrawal of overseas investment will see their economies go into free-fall. Their currencies will become worthless. Property prices will collapse. Businesses will fail. Disease will become wide-spread, made worse without the drugs to control that many that is now depended upon. Farmers without the money to purchase fuel and chemicals will no longer have the ability to mass produce food. Starvation and anarchy will prevail. There will be little governments can do to save their people from death and destruction.

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I really do not think there will be a global recession. The UK pretty much stands alone in the OECD as having had an uninterrupted 10-year boom. AFAIK all other industrialized countries have had moderate recessions over the last few years which gives them breathing space for new growth.

It's a bit like shrubs. You have to prune them back every now and again otherwise they get unhealthy and out of contrrol. The UK economy is like some kind of huge towering hogweed triffid thing which will need to be felled with an axe.

frugalista

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It’s very easy to have the wealth of others distributed to yourself in times of decline. All you need to hold is an asset that will not decline as quickly as others. Historically this has been gold, currently I feel oil futures will outperform gold should we see an economic slow down over the next three years. I believe any value held in a secured/immune asset could then be realised and used to acquire substantial tangible assets ie property at a price that reflects very little work in 2006 time valued cash.

So get saving because the money you earn at work today will be much more powerful in the future than it is now. You don’t want to waste that power by spending it today.

Also you do not want to borrow because then you will have to try and repay this current low powered money with money in the future that is much more powerful. You would be transferring that power to the bank and the people who have deposits in that bank. Those people will be few in number.

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UK GDP at lowest level for last couple of decades? I must have missed that 20 year recession to reduce our GDP in 1985 to today's level, even if you mean growth that isn't really true. :rolleyes:

The banks not happy with the level of defaults, hmmm, must be some hidden downside I can't see :P

Seriously though, all that is happening is that wealth is transferred from the under 40 generation to the over 50's. The boomers will be more than happy to continue spending this unearned wealth, if your lucky they might even let you have some of it back, only a bit mind, to help you onto the property ladder.

Don't see how this is going to screw the economy though, under 40's will have to keep working to pay off their negative equity, over 50s will keep spending it.

Cool, look into the history of economies which show a huge sway from one area to another and see its effects, takes a fair bit of reading.. but you will better understand what is happening around you.

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Cool, look into the history of economies which show a huge sway from one area to another and see its effects, takes a fair bit of reading.. but you will better understand what is happening around you.

Not sure what you are saying here, have you got any links? :unsure:

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Guest Bart of Darkness
The world has experienced some of the greatest shift of wealth in recent history, from the Anglo-Saxon nations who have dominated the global economy for the last 200 years, to Asia and Continental Europe. This shift in wealth will shortly result in the economic collapse of the Anglo-Saxon nations their money will become worthless, and their economies will disintegrate into anarchy and poverty. This collapse will also have disastrous consequences to the Asian economies, which have become depended on exporting to the North American market to support their domestic growth. While the Asian economies will be severely affected from the collapse of the Anglo-Saxon economies, they will survive and recover.

My god, and I thought I was pessimistic! :o:o

The UK economy is like some kind of huge towering hogweed triffid thing which will need to be felled with an axe.

:lol:

Best to use a special Triffid gun from a safe distance.

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How Bad?

From http://www.rense.com/general69/econm.htm

The world has experienced some of the greatest shift of wealth in recent history, from the Anglo-Saxon nations who have dominated the global economy for the last 200 years, to Asia and Continental Europe. This shift in wealth will shortly result in the economic collapse of the Anglo-Saxon nations their money will become worthless, and their economies will disintegrate into anarchy and poverty. This collapse will also have disastrous consequences to the Asian economies, which have become depended on exporting to the North American market to support their domestic growth. While the Asian economies will be severely affected from the collapse of the Anglo-Saxon economies, they will survive and recover.

The future for the Anglo-Saxon people looks bleak. The sudden withdrawal of overseas investment will see their economies go into free-fall. Their currencies will become worthless. Property prices will collapse. Businesses will fail. Disease will become wide-spread, made worse without the drugs to control that many that is now depended upon. Farmers without the money to purchase fuel and chemicals will no longer have the ability to mass produce food. Starvation and anarchy will prevail. There will be little governments can do to save their people from death and destruction.

No.

The UK is a resource rich country. There may be a shift in living standards and expectations, but when DVDs cost too much to import, we'll simply start making our own. If the West loses its buying power, the far east loses its competitive edge, and the eastern economies will become dependant on their own domestic markets. This is when the 'global levelling' will begin and there will be nothing to gain from importing anything that can be created here but without the expense of long distance transportation.

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... Yet all this could be avoided if they had not rejected the Law of God. It is only by returning to following God's Law and the teachings of Jesus Christ that this looming disaster can be avoided. '

It was all going SO well, until I got down to the last paragrah!!!

I'm surprised it didn't say we need to start a war NOW if we in the west are going to survive!!

:D

We don't get to talk much about God on this site, plenty of economics, politics and money.

Just an observation.

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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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