doomwatch Posted March 24, 2006 Share Posted March 24, 2006 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). Quote Link to comment Share on other sites More sharing options...
Bingley Bloke Posted March 24, 2006 Share Posted March 24, 2006 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. Quote Link to comment Share on other sites More sharing options...
non-FTBer Posted March 24, 2006 Share Posted March 24, 2006 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. Quote Link to comment Share on other sites More sharing options...
Mrliberty Posted March 24, 2006 Share Posted March 24, 2006 I often wondered if they were doing this all on purpose. The Project/Third Way Could be a possibility..... Quote Link to comment Share on other sites More sharing options...
busta move Posted March 24, 2006 Share Posted March 24, 2006 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! Quote Link to comment Share on other sites More sharing options...
Foobar Posted March 24, 2006 Share Posted March 24, 2006 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. Quote Link to comment Share on other sites More sharing options...
befuddled Posted March 24, 2006 Share Posted March 24, 2006 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. Quote Link to comment Share on other sites More sharing options...
Civil Servant Posted March 24, 2006 Share Posted March 24, 2006 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. Quote Link to comment Share on other sites More sharing options...
keepwatching Posted March 24, 2006 Share Posted March 24, 2006 timetoaskthebabysitter...... What is your explanation of this phenomena ? And why not this time around ?? Quote Link to comment Share on other sites More sharing options...
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