Guarduan/Reuters: BoE to cut to 1.5% in Dec

setmefree2

!!!!!!? wrote: »

Yes, despite the booming economy and nearly a decade of house price rises I was expecting a plunge in house prices

I'm not being funny but nearly everyone in the UK knew house prices would fall. I knew people (and was constantly hearing about other people) who bailed out and went STR from 2002 onwards. Many of them bailed out too early and were left stranded. So many people were saying it for so long, most people stopped listening...

setmefree2

!!!!!!? wrote: »

Regardless of where their economic good fortune comes from (selling stuff to us), the fact is that that Chinas entrance onto the World stage as a major manufacturing force gave governments an incredible deflationary bonus with which to balance against rampant inflation in other areas,

Sorry what rampant inflation in other areas?

setmefree2

!!!!!!? wrote: »

wouldn't want to undershoot those inflation targets now)

No you wouldn't ...but I guess you were being sarcastic;)

setmefree2

!!!!!!? wrote: »

Just change the main measure of inflation targeting to CPI which favours cheap imported goods and keep those rates low, low, low irrespective of what is happening to property and other assets.

I'd be very interested on your views on how to deal with asset bubbles - and I'm not being sarcastic, I really would...

dopester

setmefree2 wrote: »

went STR from 2002 onwards. Many of them bailed out too early and were left stranded.

Time will tell won't it. It seems there is quite some agreement on the 70% club thread.

setmefree2

dopester wrote: »

Time will tell won't it. It seems there is quite some agreement on the 70% club thread.

I totally agree that HPs will fall along way - some areas may see 70% price falls, some areas hardly anything...

WTF?_2

setmefree2 wrote: »

I'd be very interested on your views on how to deal with asset bubbles - and I'm not being sarcastic, I really would...

Keep inflation in check in the first place.

Asset bubbles are a sure sign of too much money relative to useful product.

WTF?_2

setmefree2 wrote: »

Sorry what rampant inflation in other areas?

Property, chiefly.

Labour costs also seem to have risen considerably . Especially anything requiring professional work.

The stock market was over inflated too - a lot of money looking for a home and not in banks as the interest rate was so low.

Plenty of inflation in commodity prices as well.

And at the very end we saw energy (and food) spiralling. That was pretty much the end-game as overpriced energy is going to choke off growth and create demand destruction.


Against that we had mega-cheap consumer goods from the East and companies were able to outsource a lot of work there too. Just fiddle with the figures so that CPI is the measure of inflation, avoiding things rising in price, and bingo we have low inflation.

With so much cheap credit to be had, plenty just racked up ever larger credit card bills and personal loans.

Heyman_2

setmefree2 wrote: »

I totally agree that HPs will fall along way - some areas may see 70% price falls, some areas hardly anything...

That's the difference between '70% drops' and a '70% average drop' though isn't it?

I fully expect to see some properties down 70% from peak. It's this '70% UK average drops' theory that I have a large problem with.

WTF?_2

setmefree2 wrote: »

I'm not being funny but nearly everyone in the UK knew house prices would fall. I knew people (and was constantly hearing about other people) who bailed out and went STR from 2002 onwards. Many of them bailed out too early and were left stranded. So many people were saying it for so long, most people stopped listening...

Were you reading the housing board in August 2007? That wasn't the general perception at the time amongst MSEers there I can tell you.