Friday, January 25, 2008

Bullish? Bearish? Debt IS a four letter word!

Credit Bubble Collapse (Robert Prechter)

Bob Pretcher talks about the credit bubble and deflation - 2nd part of a 5 parter. Credit Deflation explained in the US - are we next? Does Bears ___ in the woods.

Posted by techieman @ 08:29 AM (821 views)
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7 thoughts on “Bullish? Bearish? Debt IS a four letter word!

  • so his advice is stick with cash

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  • @hr – you must have listened to part 4 ;-). T-Bills – Swissy – “if you are a speculator be nimble, sell short…..”

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  • In an earlier interview, Prechter said “we should be in the manufacturing business, not the money shuffling business”.

    When will our government wake up? An example of our new “manufacturing industries” seem to speed cameras, which hardly helps the economy. Money shuffling is all that’s left – backed by lots of optimism (certainly up to Christmas).

    People are waking up to the debt bubble, usually after getting themselves into trouble….all too late.

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  • Mark Wadsworth says:

    Very few politico’s or commentators seem to be able to understand the simple equation:

    asset price bubble = credit bubble.

    House price inflation is not really house price inflation, the cost/value of bricks and mortar is pretty stable. It’s the land/location that goes up and down in value like a yo-yo. Ergo, a tax as a fixed percent of site-only location values would act like an extra interest rate, it would keep prices low and stable and would be a steady source of tax income, which could be used to replace, for a start, Council Tax, Business Rates, SDLT, Inheritance Tax, CGT and the TV licence fee.

    At the bottoms of the 18-year cycles (peaks at 1954-1972-1990-2008), land/location values are very low indeed, possibly nil in some areas (where the bricks and mortar are worth more than the finished house), so at these stages, the fiscally neutral rate (to replace the list above) might be as much as 10% or 20% of site-only location values. Introduce that and we’d never have house price bubbles ever again.

    *sigh* and the asset-rich low-income pensioners would be able to roll up the unpaid tax to be repaid on death of surviving spouse, that’s why we’d have to get rid of inheritance tax/SDLT so that the heirs don’t suffer a double-whammy.

    But do these idiots ever listen? Fred Harrison warned the government time and time again and they never listen.

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  • Fred Harrison did warn the government time and time again and has proved the only economist/writer who is a genuine expert.

    The government failed to sit up and listen …”things can only get better”.

    Harrison correctly predicted to the month back in 1997 that this catastrophe would unfold.

    Will they start to listen now? Any thoughts on how to go forward?

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  • Mark Wadsworth says:

    Neo-Serf, Fred also wrote about the 1990 crash … in 1983!

    You can join either the Labour Land Campaign (London), the Lib-Dems ‘ALTER’ gang (Oxford) or the LVT Campaign (in Brighton, I think) or email Fred at the Land Research Trust.

    I was trying to get a “UKIP Land Campaign” going, but there are only two of us, and we’re both in the Labour Land Campaign for want of anywhere better to go.

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