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Taking a step back and looking at the bigger picture over say 10 years ignoring all the VI nonsense and city economists still talking about the possibilty of rate cuts it all seems so simple.

World economies in trouble all central banks drop interest rates = housing bubble

Central banks probably go to far with their loosening = bigger bubble

World ecomonies start to recover far quicker than expected = higher inflation

Central Banks respond with rate rises = property crash

Property crash causes recessession = Central banks lower rates

Cycle begins again

Is it really that simple?

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Taking a step back and looking at the bigger picture over say 10 years ignoring all the VI nonsense and city economists still talking about the possibilty of rate cuts it all seems so simple.

World economies in trouble all central banks drop interest rates = housing bubble

Central banks probably go to far with their loosening = bigger bubble

World ecomonies start to recover far quicker than expected = higher inflation

Central Banks respond with rate rises = property crash

Property crash causes recessession = Central banks lower rates

Cycle begins again

Is it really that simple?

Well, this boom/bust (used to be called stop/go) you describe has plagued the British economy ever since 1945.

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and it is this very same natural economic boom/bust cycle that ignoramus Gordon Brown promised to end which as all educated people know is nonsense.

The economic role of governments is to steer our economy through the safest possible route in these boom and busts which have, and probably always will naturally occur. In practice this means carefully building strong reserves in the good times to reduce the depth of the sh1t during the bad times.

Rather worringly, this time around the UK are leaving a period of relative "boom" but still the coffers are empty and macro economic picture in pretty poor shape.

It will take another Tory government to turn this ship around (and sadly will have to involve some rather unpleasant financial and economic "medicine") but before that happens this country will have to live with the government it deserves for a few years.

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Taking a step back and looking at the bigger picture over say 10 years ignoring all the VI nonsense and city economists still talking about the possibilty of rate cuts it all seems so simple.

World economies in trouble all central banks drop interest rates = housing bubble

Central banks probably go to far with their loosening = bigger bubble

World ecomonies start to recover far quicker than expected = higher inflation

Central Banks respond with rate rises = property crash

Property crash causes recessession = Central banks lower rates

Cycle begins again

Is it really that simple?

Its either very simple, or very complicated...

The simplist way to lok at it is that.

Economy, like nature has a ballence it will cycle about the point of balence.

Why otherwise are economists experts on Excel, and graphs?

What goes around comes around

There is a train line near me that used ot have only two trains a day using it..

I could have stood on it for hours and been in no risk, but I wouldn't have slept there..

There are some things that are perfectly safe.

Standing on a train line and paying attention.

There are some things that are very dangerous

Sleeping on a train line..

There are some things that are innevitable.

The train is coming...

There are bad analogies, then there are my analogies.. :)

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Its either very simple, or very complicated...

The simplist way to lok at it is that.

Economy, like nature has a ballence it will cycle about the point of balence.

Why otherwise are economists experts on Excel, and graphs?

What goes around comes around

There is a train line near me that used ot have only two trains a day using it..

I could have stood on it for hours and been in no risk, but I wouldn't have slept there..

There are some things that are perfectly safe.

Standing on a train line and paying attention.

There are some things that are very dangerous

Sleeping on a train line..

There are some things that are innevitable.

The train is coming...

There are bad analogies, then there are my analogies.. :)

Standing on a train line is not perfectly safe at all. You could get electrocuted even if the train is miles away...

http://archive.thisiswirral.co.uk/2001/08/01/8452.html

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Actually it's even simpler than that.

Big recession in early 90's drives property values below the true value.

From 1997 to 2001 property prices return to true value as a rational supply and demand response.

From 2001 onwards investors seeing big gains in property prices over the preceding few years begin coming into the market chasing more gains. Homeowners are willing to pay ever more in the sure and certain belief (sic) that prices only ever go up.

A vicious spiral develops whereby increasing prices generates ever increasing demand chasing expected gains.

Eventually buyers realise that prices aren't going any higher; investors begin to leave the market, crash develops.

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  • 337 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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