UK House prices: News & Views

[John Doe]

A question if I may?

On this quasi Trumpton-like isle where no one starves and the profligate are hugged and patted on the head,

are there any govt. plans for maintaining the recovery during say, a five degree sustained drop in average temperature?

 

Slightly off topic but this is a UK-centric thread of such high intensity that I thought someone might know the answer.

 

So the south would be like the north?

 

Ooch, what a horrible thought

[Van]

 

-Growth reduces deficits (so long as spending is reduced as is at present). Lower deficits = lower debt growth = more that are willing to lend.

 

 

You're still utterly failing to grasp the concept. The increase in debt sustains the growth, not the other way around. If my growth is 1% but I'm I have to borrow 8-10% each year to fund that, is it sustainable? The growth is illusionary. People are not getting richer, they are getting poorer by any normal measure. Why? Because the economy is now aligned in a way that is value destroying.

[geisaver]

You're still utterly failing to grasp the concept. The increase in debt sustains the growth, not the other way around. If my growth is 1% but I'm I have to borrow 8-10% each year to fund that, is it sustainable? The growth is illusionary. People are not getting richer, they are getting poorer by any normal measure. Why? Because the economy is now aligned in a way that is value destroying.

 

Perfectly illustrated by the OBR's own forecasts of how little net worth increases in relation to a much larger increase in debt (before interest is even applied)

 

http://budgetresponsibility.independent.gov.uk/wordpress/docs/household%20debt%20paper%20formatted.doc1.pdf

[John Doe]

You're still utterly failing to grasp the concept. The increase in debt sustains the growth, not the other way around. If my growth is 1% but I'm I have to borrow 8-10% each year to fund that, is it sustainable? The growth is illusionary. People are not getting richer, they are getting poorer by any normal measure. Why? Because the economy is now aligned in a way that is value destroying.

 

Yes, that's a deficit, and the plans the conlibs have to reduce it, is what is keeping the markets sweet.

 

If they reduce the deficit as planned (and stop wasting s**t loads as has been happening over the last 20 years), the debt only then increases at the IR charged (debt has been increasing for the last 60 years).

 

Productivity is what brings real growth. And yes, a lot of the growth in the last decade (prior to 2007) was illusionary, and built on debt, but not all of it. A lot of that debt was built to support the bloated public sector, however, through a combination of inflation with no pay rises, redundancies and cost cutting, that bill is being reduced at quite a good rate.

 

The debt isn't really a problem (always been there, probably always will be), the deficit is.

 

The economy has shrunk a lot since then, but heh, we are only back to where we were in about 2005, and as I remember, things weren't so bad back then. Some people are getting a bit poorer yes, others are getting a bit better off (see all those on the lifetime trackers for example).

 

So we are not running out getting a new plasma screen each year, cutting back on that 2nd holiday, not buying that new car each year with the MEW.

 

Good. That was stupid excess and saw a lot of the money going out of the country anyway.

 

 

It seems it is perhaps you that fails to understand that it has always been this way.

 

This is not a new phenomena. The system has always been unsustainable, yet here we are. One day, of course, it will end, but with each crisis comes new ways around it. Seen it all before. Been shouting at the politicians etc all before. All these arguments have been doing the rounds for the last 40-50 years.

 

Do you not remember the ideological (capitalist/socialist) wars of the 70’s and early 80’s etc that were fought over precisely this question?

 

Like it or not (and there seem to be quite a few here that seem to actually want the STHTF for some strange reason) the crisis appears to have bottomed out and now the slow grind to recovery has begun.

 

If you disagree, that's fine, and I respect your view, as it is true that the system is ultimately unsustainable. But I will say here now that I think they've actually pulled it off, once again, and the worst of this crisis appears to be over.

[malvern hills]

Because the economy is now aligned in a way that is value destroying.

 

Could you expand on this Van?

[LauraB]

A question if I may?

On this quasi Trumpton-like isle where no one starves and the profligate are hugged and patted on the head,

are there any govt. plans for maintaining the recovery during say, a five degree sustained drop in average temperature?

 

Slightly off topic but this is a UK-centric thread of such high intensity that I thought someone might know the answer.

 

Gentlemen I hope you will forgive me bumping my own post but it was at the bottom of a page, and the only responder so far (thank you JD), understandably may have missed that my question was in deadly earnest.

Thank you

[John Doe]

Gentlemen I hope you will forgive me bumping my own post but it was at the bottom of a page, and the only responder so far (thank you JD), understandably may have missed that my question was in deadly earnest.

Thank you

 

Is it related to the old theory about the gulf stream?

[marceau]

Yes, that's a deficit, and the plans the conlibs have to reduce it, is what is keeping the markets sweet.

 

If they reduce the deficit as planned (and stop wasting s**t loads as has been happening over the last 20 years), the debt only then increases at the IR charged (debt has been increasing for the last 60 years).

 

Productivity is what brings real growth. And yes, a lot of the growth in the last decade (prior to 2007) was illusionary, and built on debt, but not all of it. A lot of that debt was built to support the bloated public sector, however, through a combination of inflation with no pay rises, redundancies and cost cutting, that bill is being reduced at quite a good rate.

 

The debt isn't really a problem (always been there, probably always will be), the deficit is.

 

The economy has shrunk a lot since then, but heh, we are only back to where we were in about 2005, and as I remember, things weren't so bad back then. Some people are getting a bit poorer yes, others are getting a bit better off (see all those on the lifetime trackers for example).

 

So we are not running out getting a new plasma screen each year, cutting back on that 2nd holiday, not buying that new car each year with the MEW.

 

Good. That was stupid excess and saw a lot of the money going out of the country anyway.

 

 

It seems it is perhaps you that fails to understand that it has always been this way.

 

This is not a new phenomena. The system has always been unsustainable, yet here we are. One day, of course, it will end, but with each crisis comes new ways around it. Seen it all before. Been shouting at the politicians etc all before. All these arguments have been doing the rounds for the last 40-50 years.

 

Do you not remember the ideological (capitalist/socialist) wars of the 70’s and early 80’s etc that were fought over precisely this question?

 

Like it or not (and there seem to be quite a few here that seem to actually want the STHTF for some strange reason) the crisis appears to have bottomed out and now the slow grind to recovery has begun.

 

If you disagree, that's fine, and I respect your view, as it is true that the system is ultimately unsustainable. But I will say here now that I think they've actually pulled it off, once again, and the worst of this crisis appears to be over.

 

John Doe, I've read what you've written over the last few pages (and few years), and all you seem to offer is misdirection, misrepresentation and confirmation bias - a superficial parroting dogmatist. You're not the only one who's been around a while, but if you can't or won't take the time to understand why this situation is different to the 70s then I see no point in engaging with you further - and I'd recommend that no-one else here attempt it either. A lost cause in every regard.

 

I think you're a panglossian fool of the most dangerous type. Look away if you must - but don't encourage others to do so.

[Van]

Could you expand on this Van?

 

Sure. It essentially comes from the notion that not all growth is good growth - there are malinvestments that are created because of government interventions in the free market, in particular interest rates and money supply. In a free market economy the collective choices of the people are reflected in market interest rates, which are reflective of individuals' time preference, reflecting their choice between consumption and saving (ie deferred consumption).

As the BoE has not allowed the free market to operate, the economy has become structured in such a way that it now needs ZIRP and QE to sustain it. Without government policies in artificially supressing rates and printing money, we would see many firms racking up huge losses and going bust. These firms are malinvestments that have been allowed to build up in the last few business cycles.

 

 

 

What do these malinvestment mean? They mean that the market is not aligned with the natural wants of the people. If the people had massive demand for financial services, then the sector should be able to support itself without the government policy help. But in keeping these firms going, all the current policy does is deprive other sectors of the economy of resources that the would otherwise have available. The output from the factors of production as they are now will be loss-making in a truely free market - this tell us that these companies are actually value destroying - the resources could be used profitably elsewhere. Profitable companies in a free market are a sign that those companies are actually productive and are serving the wants of the people.

 

In effect, government policy is forcing us to take actions that we would not normally want to take - that are not aligned with our natural wants - therefore the companies and sectors that service this artificial demand do not build wealth. They merely exist as a part of the system that is required to destroy value by bring forward consumption in order to maintain macro GDP numbers.

 

But in an increasingly state-intervened market, GDP itself is increasingly a flawed measure of economic growth. All GDP measures is the number of transactions in an economy, yet if those transactions are artificially stimulated then they do not represent the voluntary exchange of private goods.

 

I would strongly advocate researching the Austrian theory of the business cycle for a fuller explaination, and I promise that it will all make perfect sense - why we are where we are now and why we cannot have growth without restructuring and allowing the market to operate freely.

[drbubb]

John Doe, I've read what you've written over the last few pages (and few years), and all you seem to offer is misdirection, misrepresentation and confirmation bias - a superficial parroting dogmatist. You're not the only one who's been around a while, but if you can't or won't take the time to understand why this situation is different to the 70s then I see no point in engaging with you further - and I'd recommend that no-one else here attempt it either. A lost cause in every regard.

 

I think you're a panglossian fool of the most dangerous type. Look away if you must - but don't encourage others to do so.

Some people here have told me that they think he is a paid Disinformation artist.

Perhaps they are right.

[Van]

ABCT Short Version:

ABCT Long Version:

[John Doe]

John Doe, I've read what you've written over the last few pages (and few years), and all you seem to offer is misdirection, misrepresentation and confirmation bias - a superficial parroting dogmatist. You're not the only one who's been around a while, but if you can't or won't take the time to understand why this situation is different to the 70s then I see no point in engaging with you further - and I'd recommend that no-one else here attempt it either. A lost cause in every regard.

 

 

And you offer what exactly? End of the world, doom gloom. Yes there are problems, but there always has been, and always will be.

 

This might be a surprise but you do NOT know what is going to happen. Like everyone else, you just think you do.

 

I have taken the time to learn what I need to make financial decisions throughout my life, and without being brash, I've done pretty well (check the date I started posting here, long before this crises was seen by many others). I planned accordingly.

 

I offer the opinion that I think the worst might be over for now. It's going to be a hard slog no doubt, so, hardly a rose tinted view of the future. Each time is different, my point is that the system has and probably will, muddle through.

 

Why does this offend you so much that you have to resort to personal insults?

 

Very strange

 

Some people here have told me that they think he is a paid Disinformation artist.

Perhaps they are right.

 

So it seems that one is not allowed to "respectfully" (unlike some) disagree anymore without being insulted and accused of being a "paid disinformation artist"?

 

Wonder if that's why so many good posters are leaving?

[drbubb]

So it seems that one is not allowed to "respectfully" (unlike some) disagree anymore without being insulted and accused of being a "paid disinformation artist"?

 

Wonder if that's why so many good posters are leaving?

It is okay to disagree, obviously.

The problem is when people are disagreeable. And some here are.

 

I simply reported what I heard from other posters. Actually, I often find your remarks worthwhile,

even when we disagree

[LauraB]

Is it related to the old theory about the gulf stream?

 

No. It's related to what I was told years ago would happen around this time.

The accuracy is concerning me.

[drbubb]

Laura, your:

"a five degree sustained drop in average temperature?"

 

Do you have a CAUSE in mind for that?

Gulf stream, or something else?

 

BTW, as you may know, there is some real evidence that the elites themselves are preparing for some big changes

[geisaver]

John Doe, I've read what you've written over the last few pages (and few years), and all you seem to offer is misdirection, misrepresentation and confirmation bias - a superficial parroting dogmatist. You're not the only one who's been around a while, but if you can't or won't take the time to understand why this situation is different to the 70s then I see no point in engaging with you further - and I'd recommend that no-one else here attempt it either. A lost cause in every regard.

 

I think you're a panglossian fool of the most dangerous type. Look away if you must - but don't encourage others to do so.

 

I've always thought he was Hamish McTavish.

 

As to the Conlibs reducing the deficit. Prior to being elected "printing money was the last act of a desperate government when all other policies have failed" and "the deficit will be reduced to zero in the parliament". Once they got into power they printed money which has pushed deficit reduction to zero further into the distance. Now it's 7 years instead of 5 because each time they print it is so they can spend more. They keep going back on planned cuts. Even if they didn't print again that means we have at least another 7 years of adding to the debt. They never discuss reducing the debt - it's a large elephant in the room they pretend doesn't exist. Eventually they are going to be unable to keep printing as debt to GDP rises or we go even more banana than what we are now. People taking on debt now because rates are at a 300 year low are completely stuffed. The banks are sitting pretty all the ponzi deposit lending schemes have removed lending risk from them, they will be able to take the house price falls when they squeeze the indebted.

[malvern hills]

Sure. It essentially comes from the notion that not all growth is good growth - there are malinvestments that are created because of government interventions in the free market, in particular interest rates and money supply. In a free market economy the collective choices of the people are reflected in market interest rates, which are reflective of individuals' time preference, reflecting their choice between consumption and saving (ie deferred consumption).

As the BoE has not allowed the free market to operate, the economy has become structured in such a way that it now needs ZIRP and QE to sustain it. Without government policies in artificially supressing rates and printing money, we would see many firms racking up huge losses and going bust. These firms are malinvestments that have been allowed to build up in the last few business cycles.

 

 

 

What do these malinvestment mean? They mean that the market is not aligned with the natural wants of the people. If the people had massive demand for financial services, then the sector should be able to support itself without the government policy help. But in keeping these firms going, all the current policy does is deprive other sectors of the economy of resources that the would otherwise have available. The output from the factors of production as they are now will be loss-making in a truely free market - this tell us that these companies are actually value destroying - the resources could be used profitably elsewhere. Profitable companies in a free market are a sign that those companies are actually productive and are serving the wants of the people.

 

In effect, government policy is forcing us to take actions that we would not normally want to take - that are not aligned with our natural wants - therefore the companies and sectors that service this artificial demand do not build wealth. They merely exist as a part of the system that is required to destroy value by bring forward consumption in order to maintain macro GDP numbers.

 

But in an increasingly state-intervened market, GDP itself is increasingly a flawed measure of economic growth. All GDP measures is the number of transactions in an economy, yet if those transactions are artificially stimulated then they do not represent the voluntary exchange of private goods.

 

I would strongly advocate researching the Austrian theory of the business cycle for a fuller explaination, and I promise that it will all make perfect sense - why we are where we are now and why we cannot have growth without restructuring and allowing the market to operate freely.

 

That is a fantastically clear line of thought which I have not read before.

 

Thanks a lot. I'm watching the videos now.

[John Doe]

It is okay to disagree, obviously.

The problem is when people are disagreeable. And some here are.

 

I simply reported what I heard from other posters. Actually, I often find your remarks worthwhile,

even when we disagree

 

Thanks, I agree and I enjoy the debates too. Especially when more than one side is allowed.

 

As for the claim I'm paid (I wish), that came from callmetroll, so I would give it about as much credence as any of his other posts

 

I've been called Hamish a few times too over the years, even I found him ridiculously bullish.

 

Thing is, as long time users of this site (and HPC before 2005) would know, I'm a fan of the Austrian school etc, it's just I don't think that the system we have at present can simply revert to that overnight, unless we have a full on collapse.

 

As much as I want to get to a more sustainable system, the effects of a full on collapse would devastate countless lives, most of which would be borne by those that just keep their heads down trying to carve out an existence for their families.

 

It's obviously not perfect as it is, far from it (Vans post nicely points out some of the main reasons why), but a slow grind towards a gradual rebalancing is the only option I believe is possible without causing untold serious harm/pain to many many people rather than a relatively small drop in the standard of living for most.

 

If that means some have to call me a "a panglossian fool of the most dangerous type" then fine, no matter how wrong the description is (as anyone who actually reads my posts properly, and understands what it actually means, would realise).

 

What some posters here appear to want (to sort the system out at any cost, i.e a full on global financial collaspe) without actually considering the potentially horrific consequences of such events to the average man on the street, makes them far more dangerous than I could ever be.

[drbubb]

What some posters here appear to want (to sort the system out at any cost, i.e a full on global financial collaspe) without actually considering the potentially horrific consequences of such events to the average man on the street, makes them far more dangerous than I could ever be.

JD,

Can I describe you as a "muddle through" man?

It must cases, that's what happens, the world muddles through most of its problems.

 

Many of us see the potential for "Crash and Burn", but in reality, it rarely happens

[geisaver]

I must just be old fashioned.

 

I don't want the world to crash and burn but I would like moral hazard to not be so openly encouraged.

 

In the current system it feels like crime pays.

[John Doe]

JD,

Can I describe you as a "muddle through" man?

It must cases, that's what happens, the world muddles through most of its problems.

 

Many of us see the potential for "Crash and Burn", but in reality, it rarely happens

 

Yes, indeed you may (wish I'd thought of that a few posts ago, would have saved some key tapping ), but in as much that I think the world will muddle through this crisis, at least for a few years yet, during which time I will reassess my thinking as the facts emerge.

 

I also see the potential for C&B (scares me TBH, as lots of innocents will get hurt, or worse) and no doubt one day it will come, but as you say, it is very rare (thankfully), and I don't think the world is at that point, yet.

[drbubb]

Yes, indeed you may (wish I'd thought of that a few posts ago, would have saved some key tapping ), but in as much that I think the world will muddle through this crisis, at least for a few years yet, during which time I will reassess my thinking as the facts emerge.

 

I also see the potential for C&B (scares me TBH, as lots of innocents will get hurt, or worse) and no doubt one day it will come, but as you say, it is very rare (thankfully), and I don't think the world is at that point, yet.

Okay,

I am a bit more of a C&B guy, under the circumstances, but I do acknowledge it is rare, and often deferred

[LauraB]

Laura, your:

"a five degree sustained drop in average temperature?"

 

Do you have a CAUSE in mind for that?

Gulf stream, or something else?

 

BTW, as you may know, there is some real evidence that the elites themselves are preparing for some big changes

 

I know JD is itching to dismiss what I 'know', but this was nearly two decades back and it was from a source beyond the tiresome limitations of 3D. I had other distractions at the time and these events were so far ahead that I thought I had not taken the info in. Wrong of course, it all comes back as triggered feelings.

Lots of small events, in themselves not significant, but add them all together and we have an unstoppable calamity for those convinced that one physical lifetime is all there is.

My partner showed me a copy of the forthcoming events at the back of Ann(e) Walker's book 'Little One'.

It felt similar, (sorry for the vagueness). It was this content that was said to have started the binge-lunching climate change conferences. Maybe that was when the 'elites' took notice, thinking they had inside info. It might also explain the credit binge, if you follow my drift?

If I rest I may dredge up more; though sending you mail about the events of the last 24 hours seems a greater priority.

Oh for a simple life. zzzzz

[drbubb]

My partner showed me a copy of the forthcoming events at the back of Ann(e) Walker's book 'Little One'.

It felt similar, (sorry for the vagueness). It was this content that was said to have started the binge-lunching climate change conferences...

Interesting.

Do you have a link to that, or a summary somewhere.

 

I still think we can avoid "catastrophe".

If you are of the right midset, you might take some comfort from

,

who believe that the people living here "will not be allowed to destroy the planet".

Some folks who thought the planet had a "sell by date" have behaved recklessly, it seems to me.

 

I will be happy to read your email

[John Doe]

I know JD is itching to dismiss what I 'know',

 

On the contrary, I'd actually be very interested in what you have to say about what is coming, as it sounds imminent and, as such, could be a great chance to investigate some of these “prior seen” events.

 

If what you “know” (your words) is about to happen, actually comes to pass, that would be interesting in the extreme, and I for one would be honoured to say that I had heard it here first, before it happened.

 

I would then happily stand up in front of anyone that would listen and say "heh, there really might be something in this after all".

 

As I've said before, I've been looking for some proof of these things (and other fringe stuff) all my life. So far, I've found none, but to find some now, even indirect, would be fantastic.