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Mr_Sminty

Petrodollars Find A Home In Euro And Sterling

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Why does housing continue to stay bouyant? The huge inflation in oil prices is leaving middle east and russian coffers bulging with dollars, from here it gushes into european and london financial markets. This leads to major amounts of dumb money going into poorly thought out investments and currencys such as the pound.

I am not sure interest rate rises will really knock housing on the head in the UK, until the major global recession starts to rear up and the oil price collapses along with these petrodollar revenues, there will then finally be much less to finance sterling or the booming london economy.

So dont bank on a further rate cut being the final straw that breaks the back in regards to house prices. Its going to take a recession

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Why does housing continue to stay bouyant? The huge inflation in oil prices is leaving middle east and russian coffers bulging with dollars, from here it gushes into european and london financial markets. This leads to major amounts of dumb money going into poorly thought out investments and currencys such as the pound.

I am not sure interest rate rises will really knock housing on the head in the UK, until the major global recession starts to rear up and the oil price collapses along with these petrodollar revenues, there will then finally be much less to finance sterling or the booming london economy.

So dont bank on a further rate cut being the final straw that breaks the back in regards to house prices. Its going to take a recession

Brad Setser a US economist has alot to say about where petrodollars end up and you're right, of late it has been pouring into Europe and the UK. I know of two Saudi companies in Manchester who have built big units.

Remember though, these guys are looking to invest money to make money, not prop up a market. If prices start to drop, they'll be the first to get out and take their cash elsewhere.

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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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