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About 15 months ago made a prediction on this site, that this housing market wouldn't just be subject to one major change e.g. high interest rates as in the early 90s) but three. I predicted that people would be caught in an inflationary squeeze, that is that rising commodity prices would force up food and fuel at a faster pace than wages; a fiscal squeeze through rising taxation; a squeeze from higher real interest rates.

I seem to have been proved right in an even bigger way than expected. So what's next? I personally think that towards the end of this year higher quality electrical items will start to rise in price, followed by cheaper goods throughout 2009. I also expect the price of clothes to start to rise and rise quickly from this autumn!

What are everyone else's views on what we can expect later in 2008 and 2009.

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Been thinking along the same lines - the combination of existing huge (and growing) debt and a pincer movement with increasing inflation and devaluing savings and earnings will be even more damaging that trashing the BTL gamblers and hopeless over-borrowers. The BOE have spread the financial problems right across the economy through their actions, discretionary spend and the jobs reliant on it it will be in serious trouble. We'll also get forced sellers across the board now as the cost of living makes many more people's lifestyles/living arrangements unaffordable than would otherwise have been the case.

Still waiting for the bond/treasuries market to sniff the inflationary poison. When I think about financial market sectors this bubble is the last one to pop. If commodities turn sour at some point over say the next couple of years or simply stop moving up at such a rate attention will turn elsewhere and this market will be an obvious candidate. The commodity price changes that have already occurred will have inflationary reverberations for years. To my mind there is absolutely no justification for the current pricing of these instruments.

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About 15 months ago made a prediction on this site, that this housing market wouldn't just be subject to one major change e.g. high interest rates as in the early 90s) but three. I predicted that people would be caught in an inflationary squeeze, that is that rising commodity prices would force up food and fuel at a faster pace than wages; a fiscal squeeze through rising taxation; a squeeze from higher real interest rates.

I seem to have been proved right in an even bigger way than expected. So what's next? I personally think that towards the end of this year higher quality electrical items will start to rise in price, followed by cheaper goods throughout 2009. I also expect the price of clothes to start to rise and rise quickly from this autumn!

What are everyone else's views on what we can expect later in 2008 and 2009.

2008

Accerelerating house crash, increased inflation, massive increase in energy prices towards end. Increased crime. End of 2008, many dehoused living in cars - similar to those dehoused former middle class in California.

2009

Massive job losses and exodus of immigrants = massive housing excess. Leading to further massve job losses.

Further accelerated house crash. Further increased crime. Northern Rock sell off for pennies. Increased car living. Card board box towns.

2010

Pick up a 400K house for under 30K. Most won't though as there will be no cash flow.

2011

Crime. Massive crime. Drug dens in empty new builds.

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2008

Accerelerating house crash, increased inflation, massive increase in energy prices towards end. Increased crime. End of 2008, many dehoused living in cars - similar to those dehoused former middle class in California.

2009

Massive job losses and exodus of immigrants = massive housing excess. Leading to further massve job losses.

Further accelerated house crash. Further increased crime. Northern Rock sell off for pennies. Increased car living. Card board box towns.

2010

Pick up a 400K house for under 30K. Most won't though as there will be no cash flow.

2011

Crime. Massive crime. Drug dens in empty new builds.

an optimist if ever I saw one....

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Tight security at petrol stations. Read an article in the local rag about how someone in

a van with false numberplates had filled up and driven off five times in the last month.

Yup. When an average fill-up exceeds £50 the incentive to require insertion of credit / debit card into the pump machine before dispensing petrol becomes more pressing. No debit card? first insert your £20 note / pay cashier for a predetermined amount.

Wouldn't take much of a change in technology.

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Yup. When an average fill-up exceeds £50 the incentive to require insertion of credit / debit card into the pump machine before dispensing petrol becomes more pressing. No debit card? first insert your £20 note / pay cashier for a predetermined amount.

Wouldn't take much of a change in technology.

More like close to £100 for a van.

That's half a week's work on min wage.

This economy is far more screwed with inflation raging than without.

Edited by OnlyMe
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Guest KingCharles1st
You're all delusional; the feel-good-factor will kick in once England have won the Euro2008 chavball competition.

Ummm Paddles- it is you that is the delusional one- we aren't in chavkick '08- WhereTF have you been?

And BTW-yep- football tickets gone up- ALL entertainment will be soaring- theatre, footie, ruggie, tuggie, and anything else that has overheads and requires transport, and that can be taxed.

Personally, I think we will see all the shite chaviday tour operators go up the wall, and expect to see many tears here, and holidays will become extremely expensive and regain luxury item status, unless you can get your own ticket, and take a suitcase and your own bottled water to Costa Chaviera after buying your own tickets and accomodation

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I remember a news article that in some places in London petrol stations were using spike strips to prevent people from leaving, not sure how that would work in practice though in that what if you have paid and the bloke behind you tries to drive off and it busts your tyres? ,

worse on a bike you bust your front tyre you come off ,

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I personally think that towards the end of this year higher quality electrical items will start to rise in price,

Got my eye on 46" lcd, which I'm hoping to pick up for about £800 at the end of the year. I guess it is inevitable it will filter through to this kind of stuff as most of it is imported and with sterling tanking against other currencies.

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Inflation Up: This is a world phenomenon, not going away any time soon.

House prices: Down. About 60% from top to bottom if you do correct technical analysis of the House Price Graph, using raw data, not RPI adjusted data. The bottom Trend Line needs to be drawn from the bottom of the 2 last lows, and extended to the right. This trend line will provide technical support to the falling price. This gives an approximate 60% retracement from the August 2008 peak to the future low. The quicker the crash, the lower the price reached. It is not possible to predict technically the time scale.

Banks and building societies: As the rating agencies continuously rate the banks and building societies, their credit ratings will fall, as in the US. This will put pressure on their loans as a proportion of their capital. In order to attract more capital, saving rates will have to increase, irrespective of the BOE base rate. Cash is a commodity, and nobody has any.

Sterling: Probably to fall more, as the prospects of UK Ltd are seen to deteriorate. This will only to add to inflationary pressures.

Businesses: The credit squeeze will worsen, and banktruptcies and unemployment will increase. All very nasty indeed.

Stock markets: General downtrend. A continuation of the bear market that started in 2001. We have seen an Elliot B Wave correction. The next C down wave will be vicious, and lead the whole Western World into a Krondatief Winter, when equity in real estate and stock markets disappears, as the 12 year speculation in residential property using borrowed money comes home to roost.

The great unknown: It is not knowable whether we will see massive deflation, or terrifying inflation. We may see both. There are excellent cases for both scenarios. World commodity prices and M4 are rising dramatically, which would normally be inflationary. However, the removal of so much credit, and the collapse of real estate and stocks is very deflationary. I do not believe anyone who thinks he/she knows the answer, because the outcome at this stage is simply unknowable.

Logical investment: Government Index Link 3 and 5 year Savings Bonds. In the event of high inflation, this will by one of the few ways of conserving cash. Gold, ETF's etc are good, but probably not suitable as a main investment for most inexperienced investors.

Best wishes,

Housing Bear

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Yes you can be sure of that as more and more immigrants are let into the UK to force wages down and try to feed the BTL market.

England is not looking like a nice place to live and taxes make it even worse

Why would they come? - their earnings won't count for much in

their local currencies, and there will be better prospects for them

at home.

Labour costs will be reduced by coercing the unemployed into

a reincarnation of YOPS (as recently proposed by Cameron).

ABB

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Yes you can be sure of that as more and more immigrants are let into the UK to force wages down and try to feed the BTL market.

England is not looking like a nice place to live and taxes make it even worse

I actually think that a large number of Eastern Europeans will go home for Christmas and not bother coming back. I've heard from quite a number of employers of Eastern Europeans that this is already happening!

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I actually think that a large number of Eastern Europeans will go home for Christmas and not bother coming back. I've heard from quite a number of employers of Eastern Europeans that this is already happening!

The economy must be in truly awful shape if they're going home for Christmas in May! :P

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Yes you can be sure of that as more and more immigrants are let into the UK to force wages down and try to feed the BTL market.

England is not looking like a nice place to live and taxes make it even worse

Most Poles are looking to leave already. The exchange rate has gone from 7 Zlotys to the pound, to 4 Zlotys to the pound. Furthermore, wages are increasing rapidly in Poland.

You might also look to leave your job if your wage nearly halved, whilst the cost of living rocketed.

Edited by Jay76
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