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Jonnybegood

Dollar To Weaken Further And Gold To Stay Above 1100 Over Next 3 Months

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Due to other central banks in Europe not following US fed rate cuts the dollar is expected to weaken over the next 3 months even further and gold to rise above 1100 and stay there a little bit longer than yesterdays surge above 1000 only to fall back.

But what they are saying across the board now is when does the turning point come, there have been over 170bn write downs with predictions of it topping 190bn.

When all the bad debt clears and the banks start to recover (They will, they must be the only sector who get full support from the central banks) what will happen to gold and the dollar.

Well gold is predicted to fall back and the dollar to strengthen, if this does happen as predicted and the UK economy has managed to fight off the worst with BTL taking the biggest hit with family repossessions fairly contained my fear is that house prices are going to fall nowhere near the 50% being banded about on here recently.

It is more likely to be 20-30% over the next 3-4 years and this is what some of the most bear like commentators are saying it makes sense in a steady economy with still fairly low IRs an average FTB home to be costing around £100k (£125k at present - 20% = £100k + 10% deposit = £90k mortgage) seems about right.

You have a minimum wage of just under £6 hour or £12000 per annum. So a couple between them on minimum wages (£24000) could buy a property with 3.5X combined income.

The reality is far more FTBs these days are university graduates as the number of 18 years going to university has greatly increased over the last decade, the average earnings for a graduate (21-25) is approx £21k per annum hence a combined mortgage of 2.5X combined incomes.

There are going to be pockets of the UK where the average FTB property is currently well above the average price, my nephew is looking at property in Brighton and a decent 2 bed starter home is anything from £170k to £200k, but says that 20% fall from the lower prices and he and many of his friends would be able to buy comfortably.

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just like in a rising matket there is a positive feedback effect

ie, house goes up in value, people MEW to invest in more property, houes go up in value people mew more for yet more property

in a downturn no one will want to touch property until the bottom is clear, why pay 200k for a property if you can get it for 180k in 12 months time. why pay 180k for a property if you can get it for 162k the year after ect

to be perfectly honest, it all depends on inflation/deflation. and i dont know which we will get and how strong inflation/deflation/stagnation we will get

only a few powerfull men in central banks know

in real terms i expect 50% falls (that might be 0% in house prices but everything else doubles. or it may be a mixture. or it might be a 90% fall in value with deflation. who knows)

real terms 50% is likely though

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Just remember, Gold won't fall - the number of dollars/pounds required to buy it will just fall (which, btw, I don't see happening for at least 3-4 years). And that's fine because it means the currency is stronger and each dollar will buy more than it used to (and therefore your ounce of gold will do likewise).

Edited by Errol

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Due to other central banks in Europe not following US fed rate cuts the dollar is expected to weaken over the next 3 months even further and gold to rise above 1100 and stay there a little bit longer than yesterdays surge above 1000 only to fall back.

But what they are saying across the board now is when does the turning point come, there have been over 170bn write downs with predictions of it topping 190bn.

When all the bad debt clears and the banks start to recover (They will, they must be the only sector who get full support from the central banks) what will happen to gold and the dollar.

Well gold is predicted to fall back and the dollar to strengthen, if this does happen as predicted and the UK economy has managed to fight off the worst with BTL taking the biggest hit with family repossessions fairly contained my fear is that house prices are going to fall nowhere near the 50% being banded about on here recently.

It is more likely to be 20-30% over the next 3-4 years and this is what some of the most bear like commentators are saying it makes sense in a steady economy with still fairly low IRs an average FTB home to be costing around £100k (£125k at present - 20% = £100k + 10% deposit = £90k mortgage) seems about right.

You have a minimum wage of just under £6 hour or £12000 per annum. So a couple between them on minimum wages (£24000) could buy a property with 3.5X combined income.

The reality is far more FTBs these days are university graduates as the number of 18 years going to university has greatly increased over the last decade, the average earnings for a graduate (21-25) is approx £21k per annum hence a combined mortgage of 2.5X combined incomes.

There are going to be pockets of the UK where the average FTB property is currently well above the average price, my nephew is looking at property in Brighton and a decent 2 bed starter home is anything from £170k to £200k, but says that 20% fall from the lower prices and he and many of his friends would be able to buy comfortably.

I take issue with a few of the statements you have made -

1)It ends up being contained. This hasn't happened in any of the other markets, nor historically in the UK. No matter how much the VI's say its different this time (they said that in all the other markets too).

2)A steady economy. In busts jobs are shed and wages stagnate. So affordability might get better, but theres going to be less people earning, so less people who can buy.

3)Graduate wages and jobs. Graduate wages are higher I admit, but how many graduate jobs are there? So there may be more graduates, but i'm doubting if there has been anything like this increase in the number of graduate jobs. Moreover how many are in finance and associated sectors (e.g. Law), the ones about to crash...

4)That a couple on 24K could buy. This bracket spend proportionally more on necessities, and with inflation for necessities way above wage growth that's going to hit ftb's hard. If anything inflation on these goods will get worse rather than better.

5)The average ftb paid £175,093 in 2007 a far cry from 125K. You would need a 50% drop for a ~90K mortgage.

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  • 294 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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