inflation, money and houses

Cannon_Fodder

So busy trying to find a way to trip up your resident posting-enemy, you don't read the whole thing...

Out of !!!!!!?s sentence - "basically once strong inflation hits houses are one of the few areas" - you can strip out the important qualifier;

"once strong inflation hits"...

As we all know, inflation is working its way down. There will be signals and time to act before it reverses again, and in the meantime there could well be another 6-12 months of falls before it is necessary to act.

Its a waiting game.

(as I think you really know, but you just can't avoid having that dig...are you sure you are not !!!!!!?s alter ego in a multiple personality - maybe this whole forum is just one person posting for/against/neutrally to themselves - so, that makes me?...confused.)

WTF?_2

purch wrote: »

Why do you think that ordinary people will see property as the only way to protect their savings ??

It has never been that case in the past, property prices go up when greed sets in, it's not asset protection driven.

The events of the last 12 months will hardly make property the #1 choice for those seeking to preserve wealth.

The general public likely won't even get onto the 'safeguarding savings' bandwagon until they see tins of beans going up 10% in a week, such is the appalling lack of financial awareness.


Buying a house at or near the trough of the price cycle is an excellent way of safeguarding the value of your savings if you intend to live in it. It delivers real value (ie what you would be paying in rent) and profits are tax free at time of sale. You'd obviously have to look at yield and cashflow if it were for BTL though. You're also screwed if you pay too much at time of purchase too.

I wouldn't trust index-linked gilts to properly compensate for inflation, nor savings rates.

Gold is going to attract GCT if you are putting large amounts of your savings into bullion. As will speculating on F/X by moving your savings into another currency should it pay off. You could always short sterling on a spread betting exchange but few people are going to feel comfortable doing that with their life savings.

Stocks generally tend to at least rise with inflation but there's the ever present element of risk.


So in short, just as people saw houses as the way to make a bit of money during the boom I think they'll come to be seen as a way to safeguard the value of your cash in the event of strong inflation.

WTF?_2

Cannon_Fodder wrote: »

So busy trying to find a way to trip up your resident posting-enemy, you don't read the whole thing...

Out of !!!!!!?s sentence - "basically once strong inflation hits houses are one of the few areas" - you can strip out the important qualifier;

"once strong inflation hits"...

As we all know, inflation is working its way down. There will be signals and time to act before it reverses again, and in the meantime there could well be another 6-12 months of falls before it is necessary to act.

Its a waiting game.

(as I think you really know, but you just can't avoid having that dig...are you sure you are not !!!!!!?s alter ego in a multiple personality - maybe this whole forum is just one person posting for/against/neutrally to themselves - so, that makes me?...confused.)

Yes - I'm hedging against myself, just in case

purch

So in short, just as people saw houses as the way to make a bit of money during the boom I think they'll come to be seen as a way to safeguard the value of your cash in the event of strong inflation

I'm not disagreeing that it would be a wise move.

I just don't see the idea taking hold with the public, even though I wouldn't go as far as to denegrate

the appalling lack of financial awareness

quite as strongly.

Dithering_Dad

Hello Nathan Hobbs

chucky

Dithering_Dad wrote: »

Hello Nathan Hobbs

who's Nathan Hobbs?

WTF?_2

purch wrote: »

I'm not disagreeing that it would be a wise move.

I just don't see the idea taking hold with the public, even though I wouldn't go as far as to denegrate quite as strongly.

I happen to think that there is an appalling lack of financial awareness amongst the general public. Sorry if you pick that up as a denegration, it's an observation on my part. Maybe you should chill out.

Cannon_Fodder

Everyone is entitled to their opinion.

Even you.

purch

Sorry if you pick that up as a denegration, it's an observation on my part. Maybe you should chill out

Again you fail to notice when someone is posting with "tongue in cheek"

Lighten-up......just cos someone doesn't always agree 110% with everything you post all of the time doesn't mean you should always treat them as enemies.

Not everyone is out to "get you" :eek:

I'm agreeing with you, with a slight reservation and put the quotie bit in as a bit of humour and you just................<sigh> :rolleyes:

North_Sea_Bubble

Generali wrote: »

If you are concerned about inflation, the obvious investments are index linked gilts or an index linked national savings account. They pay RPI (the most 'correct' measure of inflation IMO) plus a small premium.

Perhaps if the government withdrew NS&I RPI linked certificates it might be a good early warning sign that they intend to inflate the debt away.