Credit crunch forecaster now suggests 50% falls in house prices

John_Pierpoint

Going4TheDream wrote: »

I recently visited the Peoples Palace in Glasgow and saw a mock up of one of the Single ends as they were called. Pretty grim, we can only hope and that you are right about the slack in the system and that those days dont ever come back. It would be a step to far

Or you could live in conditions like this. Billions of people dream of living somewhere like this. Each dwelling is probably 50 sq meters. Not cheap either; as the government is "communist", you would be buying a one generation lease.



http://www.expatriates.com/cls/14467768.html
A CNY ("Yuan" RMB) is worth about 10 pence - how, what looks like a poky flat, adds up to a "gross" 150 sq mt, I'm not sure.

Sometimes the drive to keep the workers working, can produce the "pyramids" effect.
http://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html
and "jokes" like this:

The e-mail, which has gone viral in various versions, provides unscientific but entertaining estimates of how long citizens would need to work to afford a 100-square-metre apartment in central Beijing, which currently sells for about Rmb3m ($450,000).

As long as there were no natural disasters, a peasant farmer working an average plot of land would just have been able to afford an apartment if he or she somehow had worked since the Tang dynasty, which ended in 907AD, until today.

If a Chinese blue-collar worker had been on the average monthly salary of Rmb1,500 since the opium wars in the mid-19th century and had given up weekends, then he or she might just have been able to afford a place of his or her own.

Prostitutes, the e-mail says, would have to entertain 10,000 customers – a marathon feat requiring them to service one customer a night from the age of 18 until the age of 46 without an evening off.

The thief would need to conduct 2,500 robberies to find the funds to buy a home.

[source FT]

smeagold

John_Pierpoint wrote: »

Just when will these hoarders of noble metals, start spending their accumulated "wealth", or are we heading towards gold lined coffins?

In about 3 to 5 years time when gold is at 5,000gbp and house prices are at an avg of 80,000gbp ie half. Go read up on stagflation and it's implications for various asset classes.

chewmylegoff

2000: buy gilts
http://contraryview.co.uk/018.htm

July 2008, FTSE will lose between 75% and 90% of its value , buy gilts.
http://www.telegraph.co.uk/finance/personalfinance/2793987/Stock-market-The-Bears-view-on-shares.html

March 2009, under no circumstances should buy equities. Buy gilts! (In March 2009 the FTSE was at 3,600...)
http://www.telegraph.co.uk/finance/personalfinance/investing/4969399/Sell-every-asset-except-gilts.html

November 2009, stay away from shares, buy gilts!
http://www.guardian.co.uk/money/2009/nov/14/shares-avoid-warning-david-kauders

July 2010, no more inflation, buy gilts!
http://blogs.telegraph.co.uk/finance/ianmcowie/100006924/inflation-is-yesterdays-problem-says-man-who-predicted-credit-crisis/

Even a stopped clock tells the right time twice a day.

I quite like this quote from November 2009: ""Yes, well, stockmarkets are all well and good if you can get the timing right, but where's the evidence that anybody has been doing so?" he asks."

Presumably there is never a wrong time to invest in gilts then...

John_Pierpoint

chewmylegoff wrote: »

2000: buy gilts
http://contraryview.co.uk/018.htm

July 2008, FTSE will lose between 75% and 90% of its value , buy gilts.
http://www.telegraph.co.uk/finance/personalfinance/2793987/Stock-market-The-Bears-view-on-shares.html

March 2009, under no circumstances should buy equities. Buy gilts! (In March 2009 the FTSE was at 3,600...)
http://www.telegraph.co.uk/finance/personalfinance/investing/4969399/Sell-every-asset-except-gilts.html

November 2009, stay away from shares, buy gilts!
http://www.guardian.co.uk/money/2009/nov/14/shares-avoid-warning-david-kauders

July 2010, no more inflation, buy gilts!
http://blogs.telegraph.co.uk/finance/ianmcowie/100006924/inflation-is-yesterdays-problem-says-man-who-predicted-credit-crisis/

Even a stopped clock tells the right time twice a day.

I quite like this quote from November 2009: ""Yes, well, stockmarkets are all well and good if you can get the timing right, but where's the evidence that anybody has been doing so?" he asks."

Presumably there is never a wrong time to invest in gilts then...

Timing is the key in both markets, so the majority opinion is always wrong; resulting in buying high and selling low.

The current problem is that nearly all democratic countries are playing fast a loose with their fiat currencies - Markets are no longer able to respond to economic drivers. Perhaps the world has got to the point where we are facing real diminishing returns to capital as the real capital per head of the world is getting diluted faster than business and technology can increase real output.

So the world's wealth is under threat from desperate politicians, unable to afford more "bread and circuses" with falling tax take, just like the fall of ancient Rome, they are resorting to debasement of the currency.

The wealth does not know what to do and is desperately seeking a safe haven in an attempt to protect its value: Noble metals, Swiss francs, Mellon bank USA, Top of the range artefacts. None of these can in the long run be worth more than their share of underlying wealth per head of the world's population.

The world in general and Europe in particular is on the cusp of a political change that will cause all sorts of uncertainties until economics manages to hold the arena again.
Will the new transnational money technologies create an elite oppressing the lumpen proletariat, or will the internet educated 24 hour transnational connected, unemployed generation create new political structures ?

Will the former provide bread and circuses to distract the latter?

I don't know do you?

chewmylegoff

John_Pierpoint wrote: »

...Will the former provide bread and circuses to distract the latter?

I don't know do you?

Nope, no idea. What I do know is that whatever the situation you can't go wrong buying gilts, apparently.

Zoran_Ilievski

Cleaver wrote: »

I don't think house prices will fall 50%. However, I might be saying something like that if I had a book like his to flog.

40-50% seems to be a very common figure for those predicting house price crashes.

In Australia, Steve Keen predicts a 40% fall and Harry Dent predicts 50%...

Australian homes set for 50% crash: forecaster Harry Dent

Don't know where the 40-50% figures comes from - I reckon they just use it cos it sounds nice and scary!

Cleaver

Zoran_Ilievski wrote: »

40-50% seems to be a very common figure for those predicting house price crashes.

In Australia, Steve Keen predicts a 40% fall and Harry Dent predicts 50%...

Australian homes set for 50% crash: forecaster Harry Dent

Don't know where the 40-50% figures comes from - I reckon they just use it cos it sounds nice and scary!

With predictions it's the 80/20 rule. 80% of commentators will probably be predicting somewhere around zero percent at the moment, maybe plus or minus 10% here at there. 20% of people (or possibly less) will be people who have more extreme views and are predicting 50% losses, or maybe 50% gains. They could be right of course, but I imagine it'll be someone in the 80% majority who is correct in the end.

Realmoney_2

smeagold wrote: »

In about 3 to 5 years time when gold is at 5,000gbp and house prices are at an avg of 80,000gbp ie half. Go read up on stagflation and it's implications for various asset classes.

I think you could be right. But we could have big inflation in the next 5 yrs then house prices would be more than average 80K but still would have crashed from present values in real terms.

IveSeenTheLight

Realmoney wrote: »

I think you could be right. But we could have big inflation in the next 5 yrs then house prices would be more than average 80K but still would have crashed from present values in real terms.

Like looking at specific properties in context with national averages, should the property index be linked to specificall wage inflation instead of how the cost of everything else has went up.

Cleaver

smeagold wrote: »

In about 3 to 5 years time [STRIKE]when[/STRIKE] if gold is at 5,000gbp and house prices are at an avg of 80,000gbp

.............