Disaster for Britain as housing becomes more affordable

stephen163

I don't want to be the poster boy for reckless economics, but is there not a case that the Chinese save too much? It's good to save some money but how can an economy prosper if nobody is spending their money? I guess the Chinese can do it because they export most of their goods to us, the greedy westerners. That's a fairly good niche they have. If the Chinese stood alone though, they would be in serious trouble.

It's easy to blame consumer culture for the mess we're in and you'd be partly right to do so. But in my opinion, it's the best way to create wealth and increase living standards. It's an interesting debate, anyway.

Really2

beingjdc wrote: »

In the 70s the 'problem' was that the price of oil and everything else went up hugely. House prices didn't really fall, but they stayed static while everything else went up.
.

Well they did fall a bit and the fall was amplified by inflation.

Even with prices standing still and 20% inflation it is falling in real terms.

So sorry it is easy to see from every property crash it as been negative to the economy.
I find it hard to belive Bull or Bear could argue with that as historical and current data shows that to be true.

StevieJ

Thrugelmir wrote: »

The average Chinese person is reckoned to save 50% of their employment income. (Sensible people and puts us to shame).

So money from the Far East looking for a good investment return ended up being lent to the UK and USA housing markets. The availabilty of cheap credit
meant that mortgage lenders in the UK offered extremely cheap rates of interest and some on very loose terms.

s.

If the funds were from the far east how come US and European banks have been landed with these dodgy CDO's Whereas the far east seem to be in the clear.

Really2

stephen163 wrote: »

I don't want to be the poster boy for reckless economics, but is there not a case that the Chinese save too much? It's good to save some money but how can an economy prosper if nobody is spending their money? I guess the Chinese can do it because they export most of their goods to us, the greedy westerners. That's a fairly good niche they have. If the Chinese stood alone though, they would be in serious trouble.

It's easy to blame consumer culture for the mess we're in and you'd be partly right to do so. But in my opinion, it's the best way to create wealth and increase living standards. It's an interesting debate, anyway.

Shangai apartments are 600X the average wage.:eek:

http://research.stlouisfed.org/publications/es/08/ES0819.pdf

Now who was saying china was a good example.:)

Wookster

stephen163 wrote: »

But in my opinion, it's the best way to create wealth and increase living standards. It's an interesting debate, anyway.

Lets see where we are in the UK:
- 2M unemployed and rising
- 40,000 repossession in 2008, 75,000 predicted for 2009
- Billions pumped into 5 UK banks
- Tax payer to underwrite billions more, how much will be paid out? No one knows

How does this qualify as wealth creation or an increase of living standards?

StevieJ

Really2 wrote: »

Shangai apartments are 600X the average wage.:eek:

http://research.stlouisfed.org/publications/es/08/ES0819.pdf

Now who was saying china was a good example.:)

That is some bubble :eek: Can we have a graph

harrup

stephen163 wrote: »

I don't want to be the poster boy for reckless economics,.....

Ahhhh, TOO LATE!

As we now FINALLY know who got us into s***t creek without a paddle - yes, indeed, it was stephen163 et al! Repent, repent.

:rotfl:



Only kidding - good posts. How would we expand and learn if we all saw things the same way.

Really2

Wookster wrote: »

Lets see where we are in the UK:
- 2M unemployed and rising
- 40,000 repossession in 2008, 75,000 predicted for 2009
- Billions pumped into 5 UK banks
- Tax payer to underwrite billions more, how much will be paid out? No one knows

How does this qualify as wealth creation or an increase of living standards?

Wookster this is not a dig but why do you live in the UK?
If every othe country is in a better shape why would you not be consentrating on getting out rarther than posting stuff on here?

Thrugelmir

Really2 wrote: »

The average chinese person does not get paid enough to live never mind save.
It is easy to save 50% or 100% of nothing.

http://research.stlouisfed.org/publications/es/08/ES0819.pdf

"Chinese worker needs to save his or her entire annual income (a 100 percent saving rate) for about 50 years to buy an apartment!"

Look carefully at the graph published in the article you placed a link to. It clearly states National Savings rates.

Unsure what relevance the fact that the Chinese can't afford to buy an apartment has to my comments.

beingjdc

stephen163 wrote: »

I don't want to be the poster boy for reckless economics, but is there not a case that the Chinese save too much?

Yes, but we're so addicted to their debt funding that when they threatened to stop giving it to us, Obama had to send Hilary Clinton to beg for them to change their minds.