Jump to content
House Price Crash Forum
doomwatch

Capitalism Needs A Crash ?

Recommended Posts

If we take the bull argument the HPI will remain > 0 in the future, are we not going to hit a point where

the majority of the Western World will be spending so much to service debt (mortgages, CCs etc) they'll not be able to buy

any consumables and capitalism will grind to a holt ?

I certainly don't see corporates offering massive employee pay rises to prop up the sham of "free markets", so the logical conclusion

is that it's in the interest of capitalism for HPI << 0 to allow us to buy the sh1t we don't need (unless you live in Essex of course).

Share this post


Link to post
Share on other sites

It's logical that if house prices and unavoidable living costs such as council tax, water, food, gas and electricity continue to rise well in excess of inflation, while wages continue to drag, there will come a point where there is nothing left from after the cost of keeping a roof over your head, food in you stomach, a little light and heat in your home and the bailiffs away from the door. Next those costs will overtake take-home pay and things will start to get really bad. One way or anopther, whether it's house prices down or wages up much faster, some sort of correction has to take place. It can't not happen.

Share this post


Link to post
Share on other sites

If we take the bull argument the HPI will remain > 0 in the future, are we not going to hit a point where

the majority of the Western World will be spending so much to service debt (mortgages, CCs etc) they'll not be able to buy

any consumables and capitalism will grind to a holt ?

I certainly don't see corporates offering massive employee pay rises to prop up the sham of "free markets", so the logical conclusion

is that it's in the interest of capitalism for HPI << 0 to allow us to buy the sh1t we don't need (unless you live in Essex of course).

Exactly. I call it 'Capitalism will eat itself'.

What makes it more certain is a scottish tw*t of a chancellor with his head up his own ass.

Share this post


Link to post
Share on other sites

Exactly. I call it 'Capitalism will eat itself'.

What makes it more certain is a scottish tw*t of a chancellor with his head up his own ass.

I think that boom and bust is always going to happen unless you prevent it with very draconian legislation. The big problem here is that you really want to be saving up money during the good times to help you get through the bad times. GB has been borrowing lots of money (and encouraging Joe public to do the same) during the good times so we've got nothing to fall back on when there is a recession.

Oh dear!

Share this post


Link to post
Share on other sites

I think that boom and bust is always going to happen unless you prevent it with very draconian legislation. The big problem here is that you really want to be saving up money during the good times to help you get through the bad times. GB has been borrowing lots of money (and encouraging Joe public to do the same) during the good times so we've got nothing to fall back on when there is a recession.

Oh dear!

As long as the banks create money out of thin air and flood the market with cheap money there will always be boom followed by bust when they contract the supply and raise borrowing rates.

Share this post


Link to post
Share on other sites

I think that boom and bust is always going to happen unless you prevent it with very draconian legislation. The big problem here is that you really want to be saving up money during the good times to help you get through the bad times. GB has been borrowing lots of money (and encouraging Joe public to do the same) during the good times so we've got nothing to fall back on when there is a recession.

Oh dear!

Indeed, in a low regulation environment human behaviour will always create boom and bust situations. Fear and greed and the madness of crowds. All performing asset classes attract speculation which feedbacks.

Whilst 'the golden rule' is designed to do exactly that, saving in good times to pay for the bad, GB has so badly misjudged the extent of coming problems that he has shot his load already and there is nothing left in the locker other than inflation to bail him (and us) out.

Share this post


Link to post
Share on other sites

I think this is called 'Creative Destruction' by Schumpeter. But some bright spark will know for sure.

What I vaguely remember is that Capitalism has to go through regular bouts of creative destruction in order to continually renew itself. This often involves the destruction of considerable amounts of value.

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...

  • 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.