Friday, Nov 20, 2009

Just a reminder "I am the greatest"(Broon not Ali) Asleep at the wheel?

It is often wrongly claimed that Gordon Brown failed to spot the housing bubble. In fact, he called the bubble as early as 2005. The trouble was he believed he had addressed it. Brown thought he had successfully managed a boom without a bust.

Posted by waitingtobuy @ 10:06 PM (1216 views)
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1. waitingtobuy said...

Skip to 5mins 20secs in for house bubble etc

Friday, November 20, 2009 10:10PM Report Comment

2. Screwsnutsandbolts said...

"Bank of England's independence" mmm..........

Friday, November 20, 2009 10:57PM Report Comment

3. paul said...

I can't watch the video where I am right now, but I can say that there did seem to be a very prominent idea among economists, central bankers and the media circa January 2007, that we were well on our way to the sunny uplands of permanently rising house prices and permanently low inflation - almost as if by removing house prices from the inflation measure we had effectively removed the problem.

Akin to a weight watcher chucking the scales in the bin and exclaiming "problem solved!".

I seriously think they thought this - which is all the more frightening since it goes against everything economics has to say about credit booms, i.e. that they *always* end in catastrophic economic collapse.

Saturday, November 21, 2009 01:32AM Report Comment

4. techieman said...

ok we now know all this... so the issue for me is not what has happened its the question of sport what happened next (from here) round.

Saturday, November 21, 2009 08:47AM Report Comment

5. paul said...

Look to Japan circa 2002 to see what happens next. Japan went into a deflationary spiral following bank rate cuts and never recovered. QE failed. House prices (land values) plummeted. Money went overseas looking for better returns, weakening banks further.

The truth is, it was an 'L' shaped recovery for Japan and will be for the UK. Only the government is giving their best shot at preventing those stupid enough to jump on the bandwagon from suffering for their decisions. They will consequently boil like frogs rather than get burned like moths - but only after huge amounts of public money have been thrown at the problem.

Japan's public deficit is something like 200% of GDP.

Saturday, November 21, 2009 09:43AM Report Comment

6. Alfie said...

Yeah I think Gordon Brown knows its not going to work, he is just hoping it doesnt go completely pear shaped before the next election.

In the mean time those who dont read the 'real news' like this site reports, will think everything is hunky dorey and probably vote for the Grim Reaper.

Saturday, November 21, 2009 12:42PM Report Comment

7. letthemfall said...

Are there any good reasons why we should not go down the route of Japan, other than the inherent unpredictability of these things? I'll suggest that in this country the populace will spend spend whenever they can, whereas the Japanese, a financially conservative people, hunkered down and stayed down. This fact could keep us from long-term deflation. Discuss.

Saturday, November 21, 2009 03:52PM Report Comment

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