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Mr Joe

Internet Facilitates Crash?

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Remove the internet from the equation. Would the housing market be were it is today? How much of a factor will the internet be in any correction? The last downturn in the UK housing market happened when the internet didn't really exist.

Any opinions?

Mr Joe.

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And from the other angle... I wonder how much of a part the internet played in facilitating the massive HPI that we've seen over the last few years?

The middle classes, the wanabee speculators have the most access to the internet at work and at home. I guess property sites like Rightmove have enabled the ripple effect of buying cheaper properties out from towns and cities.

Only problem is now all the properties in all areas seem very expensive. The towns and cities may at this moment in time offer better value now in respect to the properties in the sticks?

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Inflation is a byproduct of the workforce demanding higher wages. This then creates higher prices at the factory gate and then that in turn creates more wage demand to purchase the goods.

The internet has enabled people to make informed educated decisions with regard to money and property.

People are much more aware today of world events, the impact that world events have on local and global economies and what it means to them personally.

I dont think house prices have risen as a direct result of the internet, however it is used as a crutch to support their views and reinforce their descisions.

If you took the net away, it would have no impact on the economy or to house prices.

However in the next recession I think people are going to be far more receptive to the green shoots of recovery. They will identify the opportunities much quicker, and I think for that reason we will at best see falls of 30% as the investors with cash jump in early thus lifting the market.

It beggars belief that in 1995 you could buy a house for less than a lorry load of Bricks!!! Yet people still rented. In fact the talk on the street was that "Property would never go up again".

Fools, Money, Parted.

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Inflation is a byproduct of the workforce demanding higher wages. This then creates higher prices at the factory gate and then that in turn creates more wage demand to purchase the goods.

The internet has enabled people to make informed educated decisions with regard to money and property.

People are much more aware today of world events, the impact that world events have on local and global economies and what it means to them personally.

I dont think house prices have risen as a direct result of the internet, however it is used as a crutch to support their views and reinforce their descisions.

If you took the net away, it would have no impact on the economy or to house prices.

However in the next recession I think people are going to be far more receptive to the green shoots of recovery. They will identify the opportunities much quicker, and I think for that reason we will at best see falls of 30% as the investors with cash jump in early thus lifting the market.

It beggars belief that in 1995 you could buy a house for less than a lorry load of Bricks!!! Yet people still rented. In fact the talk on the street was that "Property would never go up again".

Fools, Money, Parted.

Inflation is caused by an expanding money supply. The expansion can be a mass withdrawl/drop of savings, expansion of credit or issue of more money or a combination of these. The expansion leads to higher asset, commodity and good prices normaly assosiated with inflation. Note: rising prices / wages are not inflation but an effect of inflation, or where inflation is most readily observed by the masses.

Watch out for deflation as savings rates increase, credit is tighened ... all faster then the Fed / BOE can print false money.

Edited by vinny

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Inflation is caused by an expanding money supply

If that be the case then how was it that during the last recession the money supply shrank yet we had massive inflation ?.

In the last recessions inflation was caused by a demand for higher wages to service the higher costs of mortgages and the cost of living due to inflation. It is a viscious circle and the only tool to stop it is interest rates and the removal of the ability of companies to make high pay awards by reducing the money they can access. This is acheived by high interest rates, and fiscal controls from Government on borrowing.

The only adjustment that an economy can make when it is in the deep stuff is to have inflation in goods, yet deflation or stagnation of wages.

Currently we have a case where our money has too much buying power when it comes to goods, and this is due to the imbalance between our wages and that of our business partners overseas in the emerging economies. Our own goods are uncompetative due to the high wages demanded in the manufacture, or service process.

Raw materials on the whole have remained under control, in fact in many cases such as the construction industry they have fallen.

Energy costs have risen, but again over the decade in line with inflation. The energy costs to business are only recently increasing having had some salad years with huge cuts due to de-regulation and de-nationalisation and rationalisation.

My Theory, what do you think ?.

Edited by laurejon

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Guest Winners and Losers

i dont think it was the internet. i think it was all the endless property crap on tv.

Agree

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Inflation is a byproduct of the workforce demanding higher wages. This then creates higher prices at the factory gate and then that in turn creates more wage demand to purchase the goods.

NO. Inflation is caused by excess money supply, a result of lax lending (read 'money creation') by financial institutions.

Do not swallow that old chestnut about inflation being caused by wage demands: it's complete bullsh1t.

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NO. Inflation is caused by excess money supply, a result of lax lending (read 'money creation') by financial institutions.

Do not swallow that old chestnut about inflation being caused by wage demands: it's complete bullsh1t.

A question………….. I'm not sure of the answer..... It may be key to investment strategy in the near term……………..

Is an excess of money as you have made mention of here (vs. expanding money supply as I posted) necessarily inflationary?

If there is a credit contraction plus, say, a mindset of the masses to save even though there may be “too much” money in the system then isn’t it possible that goods and/or asset prices may fall?

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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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