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Debate House Prices
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The mysterious case of the vanishing money
Comments
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HAMISH_MCTAVISH wrote: »No, but in most developed nations the housing market and associated goods/services account for between 12% and 18% of GDP.
A critical industry, on a par with manufacturing and financial services in size and importance to the economy.
Yes, and it's all bullsh1t.
You just don't get it do you McTittish?"The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0 -
What the fvck is a meme?0
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HAMISH_MCTAVISH wrote: »Rationing is defined as:
"The controlled distribution of scarce resources, goods, or services."
Mortgage Rationing is a completely accurate term.
Huh?
It's always been that way.
What would you prefer?
"Wild distribution of scarce resources, goods, or services"?0 -
HAMISH_MCTAVISH wrote: »The fun bit will come later when we start discussing what actually "takes money out of the economy".
Very little!
Ignore all the money in the economy, other than £100K sitting under your mattress. So you go and put it into the bank. It is a new bank with no business. Just £50K shareholder capital. There is £150K in 'the economy'
ILW is in the market for a new house. He goes to the bank and borrows your £100K and gives it to me, in return for my house at fair market value.
Your £100K - the very same £20 notes - are now under my mattress. It remains the only money in 'the economy' apart from the £50K share capital in the bank.
ILW defaults and the bank repossesses. ILW has thrashed the house around a bit. Market values have fallen. So it could sell for only £70K. ILW owes £30K. The bank has an unrecoverable debt of £30K. The shareholder now only holds shares worth £20K
I take £70K out from my mattress and buy my old house back. You withdraw your £100K to put back under your mattress.
No money has been lost from 'the economy', despite the house crash, and despite ILW's toxic debt. You have £100K, I have £30K, and the shareholder has £20K. The same £150K remains in the economy.
The only difference, really, is which part of 'the economy' the money is in. We started with £100K in cash, and £50K of shares in a business. We end up with £20K invested in shares in a business, but £130K in 'cash'.
Now the rest of the economy [That's the local pub, the local sandwich shop, and a supermarket] can eventually 'benefit' from the circulation of £130K, rather than only £100K before.
I have just proven, without a shadow of doubt, that house price crashes, and toxic debts are 'good' for the country.0 -
HAMISH_MCTAVISH wrote: »
Oh, and while we're on the subject, where do you think that bank margin goes?
Up their nose, off shore accounts, tax havens, Monaco and with their lawyers:D0 -
HAMISH_MCTAVISH wrote: »Nothing at all.
You can only allocate a small portion of housing benefits to the deficit, and furthermore only allocate a portion of the deficit funding to overseas investors. Who may well then turn around and use their profits to re-invest in the UK.
So back to the topic at hand.....
I'm not sure what the numbers are but I think housing benefit is around £20b.
If you get rid of housing benefit, one million idle tennants will have to give up watching Judge Judy on daytime television and a million idle BTL's will have to give up watching Dragons Den on daytime television. Both groups will have to go back to gainful employment and taxes will go down for those doing useful work.0 -
HAMISH_MCTAVISH wrote: »No, but in most developed nations the housing market and associated goods/services account for between 12% and 18% of GDP.
A critical industry, on a par with manufacturing and financial services in size and importance to the economy.
I suspect that is not the case in Germany.0 -
What the fvck is a meme?
It's basically what Hamish uses all the time. Using repetition of the same theory all the time hoping it becomes part of culture.What the fvck is a meme?
It's basically what Hamish uses all the time. Using repetition of the same theory all the time hoping it becomes part of culture.What the fvck is a meme?
It's basically what Hamish uses all the time. Using repetition of the same theory all the time hoping it becomes part of culture.What the fvck is a meme?
It's basically what Hamish uses all the time. Using repetition of the same theory all the time hoping it becomes part of culture.What the fvck is a meme?
It's basically what Hamish uses all the time. Using repetition of the same theory all the time hoping it becomes part of culture.0 -
Loughton_Monkey wrote: »It's basically what Hamish uses all the time. Using repetition of the same theory all the time hoping it becomes part of culture.
.
heh heh....... Not bad.
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
What the fvck is a meme?
Just a thoughtless soundbytes and concepts lifted from others and endlessly regurgitated by people who like the ideas without truly understanding the underlying mechanics and the spurious nature of the same.
For example, the concept of the "Softlanding" created by VIs in 2002 and roundly adopted by bulls as an alternative to the inevitable crash.
Or the "new paradigm". The market mechanism which would magically ensure the soft landing.
Or "rent is dead money". Unlike interest payments. Apparently.
Or "buy now before you miss the boat". Turns out like buses, theres a new boat along every few minutes.
Or "house prices only go up". If you ignore the periods where they fall.
Etc.
Don't hear so much of those nowadays.
Redacted from history it seems.0
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