House prices are going to go up - unfortunatly

Really2

TruckerT wrote: »

In the 70s, inflation meant, in your own word, a 'spiral' of both prices and wages - that is not what is happening now

TruckerT

That was an inflationary wage spiral, inflation as always refered to price.

A wage spiral is a cause of wages chasing inflation. Prices chasing supply. (basically it requires enough money to award pay rises to match/better inflation)

That was the cause of inflation running away in the 70's so that may be how you recognise it.

Wage inflation and Price inflation are two different things.
You are currently witnessing how inflation can be caused without wage inflation/excess money chasing goods.
It may be not what you have witnessed in the past but it is more than possible (stagflation or biflation)
As I said before without more money current inflation will turn to falling prices as income errodes if more money is not introduced into peoples pockets.
The falling inflation would be caused by falling world wide demand (recession) much like 2008.

TruckerT

Really2 wrote: »

A wage spiral is a cause of wages chasing inflation. Prices chasing supply

Me confused, which is chasing which? Which is 'cause', which is 'effect'? Prices chasing supply of what - money? Where does money come from - wages?

Bi-flation is new to me - what does that mean?

TruckerT

TruckerT

sabretoothtigger wrote: »

No shortage but a rising demand beyond production

Rationing?

Would the oil producers follow the banks example by killing the geese which are laying their golden eggs?

If we stop buying oil, just as Heath and Thatcher stopped buying coal (at enormous risk), who would win?

TruckerT

Sibley

I might have been mistaken, but I'm sure I heard that Blanchflower bloke say in an interview on ITV News last night "we need to get house prices rising again" (or words to that effect).

Did anyone else hear the same thing ?

Talk about putting more eggs into the already heaving basket.

Yes he did say that.
Look at the HPC reaction haha

http://www.housepricecrash.co.uk/forum/index.php?showtopic=169261

Oh it's really spannered them haha.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=154766


HPC website and dreams. RIP.

DB's message managed to reach every homeowner in the UK. Prices rising 21% for sure now.

DervProf

What a brilliant plan !

House prices have already been stretched beyond the mans of most FTB's, unless they have a fairly hefty deposit. OK, If 95%+ mortgages become freely available again, then they may start to buy again, for a short while.

Meanwhile, Blanchflower thinks we NEED HPI. :huh:

Graham_Devon

Really2 wrote: »

Price rises are inflation so it is the correct term.

Exactly.

So why suggest inflation can't happen without wage rises?

Especially considering it's exactly what's happening right now.

bendix

I disagree with the proposition in the OP's first post. There is no evidence to suggest that a second round of QE in the UK would raise property prices. It had no positive effect on property prices in the first round, and two rounds of QE in the US still see house prices completely depressed.

More liquid assets - shares etc -yes, but not property.

Really2

Graham_Devon wrote: »

Exactly.

So why suggest inflation can't happen without wage rises?

Especially considering it's exactly what's happening right now.

Err where did I say that on this thread???

Specsavers?

Not really as current inflation is not caused by wages, thus inflation is not related to wages. Inflation can be caused by money or too little goods. Current inflation will turn to deflation (or as close as) without more money.

Got the wrong person? again...

Graham_Devon

Really2 wrote: »

Err where did I say that on this thread???

Specsavers?


Got the wrong person? again...

I will admit, your argument confuses me.

I don't really know what you are getting at. You seem to deny a further round of QE will cause inflation, and talk about wage spirals, but then say you are not talking about wages.

Sorry for the misunderstanding, but honestly, I no longer have any idea what you are trying to say.

All I'm saying is that further QE will cause higher inflation, or the high inflation we have to last longer than it otherwise would. At a time when we least need it as we are all getting poorer.

It may pump some liquidity into house prices, not sure, but it's artificial, and only creating a bigger problem.

Really2

Graham_Devon wrote: »

I will admit, your argument confuses me.

I don't really know what you are getting at. You seem to deny a further round of QE will cause inflation, and talk about wage spirals, but then say you are not talking about wages.

Sorry for the misunderstanding, but honestly, I no longer have any idea what you are trying to say.

Well Read then?

QE wont/can't cause inflation unless money gets in to peoples pockets.
So if it causes growth, lending, boom etc it may well do.

House prices can't rise if people can't borrow or have no desire to buy. See this quote.

Really2 wrote: »

Unless you think 09 was caused by increased lending and there was an outstanding demand to borrow and that in turn did not cause increasing gdp?

Would that not totaly go againt what you say about demand and mortgage rationing?

If people on here think there will be QE and all it will do is cause house prices to go up but wages and everything else will stop they are mistaken.
On current criteria people can't afford or get credit.

The reason why prices rose and growth increased in 2009 was because liquidity was introduced and people began to make money again and felt stable.
Prices did not rise because lenders we giving away cash, lenders had slightly more cash (than non) and people felt more comfortable about borrowing because of the economy growing.

Inflation can't carry on growing without wages increasing to support them. So we either have to have a wage spiral to keep inflation going.

Or like what is currently happening inflation is going to lead to deflation as there is not money there to support it.