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How protests against inequality could affect the housing market
Flight2quality
Posts: 365 Forumite
How protests against inequality could affect the housing market
Harrods and Poundland both reported record results this week.
That nicely sums up the state of the global economy. It also explains what all this 'Occupy Wall Street' stuff is about.
The mega-rich have more money than ever before. Everyone else has less. And the general feeling is that governments and central banks are happy to subsidise and protect the wealthy, while everyone else tightens their belts.
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That's because lots of people who are still mega-rich today, shouldn't be. They have only been able to hang on to their wealth and their jobs because governments and central banks have conspired to make others pay for it.
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Interest rates have been slashed, propping up asset(house) prices, and giving those who can still borrow money access to historically low debt costs.
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First, interest rates. How high can inflation go before the Bank of England is forced to tackle it? In other words, what consumer price index figure would cause the average saver in the street to start panicking?
I reckon the number is around 7%. That's just going on gut feel, of course. I'd be curious to know what your 'inflation panic' rate is – let us know in the comments below.
But at 7%, it would become very obvious to anyone with any significant cash savings that they were rapidly becoming poorer. They could tackle that by going out and buying middle-class inflation hedges such as antique furniture or SILVER or other collectibles (as Merryn noted in a recent issue of MoneyWeek magazine).
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I'm not saying interest rates will rise in the very near future. But it would be a mistake to base all of your investment decisions on that hope. And when they do start to rise, there's a good chance they'll rise a lot faster than we've become used to since the Bank gained independence.
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What about the second point, tax? I'm certainly not in favour of it (we get taxed too much already), but if the government did push through some sort of property tax, then it certainly wouldn't be pretty for British property prices.
http://www.moneyweek.com/news-and-charts/economics/us/how-protests-against-inequality-could-affect-the-housing-market-14200
Hey I have an original idea, if the house price bulls can not think of a way to still say house prices will still go up even with all the social unrest because of the GFC, then why not just say oh its from moneyweek so it must be all wrong purely for that reason! I cant argue against those points because they are 100% right, just its from moneyweek so must be wrong.
-
Harrods and Poundland both reported record results this week.
That nicely sums up the state of the global economy. It also explains what all this 'Occupy Wall Street' stuff is about.
The mega-rich have more money than ever before. Everyone else has less. And the general feeling is that governments and central banks are happy to subsidise and protect the wealthy, while everyone else tightens their belts.
-
That's because lots of people who are still mega-rich today, shouldn't be. They have only been able to hang on to their wealth and their jobs because governments and central banks have conspired to make others pay for it.
-
Interest rates have been slashed, propping up asset(house) prices, and giving those who can still borrow money access to historically low debt costs.
-
First, interest rates. How high can inflation go before the Bank of England is forced to tackle it? In other words, what consumer price index figure would cause the average saver in the street to start panicking?
I reckon the number is around 7%. That's just going on gut feel, of course. I'd be curious to know what your 'inflation panic' rate is – let us know in the comments below.
But at 7%, it would become very obvious to anyone with any significant cash savings that they were rapidly becoming poorer. They could tackle that by going out and buying middle-class inflation hedges such as antique furniture or SILVER or other collectibles (as Merryn noted in a recent issue of MoneyWeek magazine).
-
I'm not saying interest rates will rise in the very near future. But it would be a mistake to base all of your investment decisions on that hope. And when they do start to rise, there's a good chance they'll rise a lot faster than we've become used to since the Bank gained independence.
-
What about the second point, tax? I'm certainly not in favour of it (we get taxed too much already), but if the government did push through some sort of property tax, then it certainly wouldn't be pretty for British property prices.
http://www.moneyweek.com/news-and-charts/economics/us/how-protests-against-inequality-could-affect-the-housing-market-14200
Hey I have an original idea, if the house price bulls can not think of a way to still say house prices will still go up even with all the social unrest because of the GFC, then why not just say oh its from moneyweek so it must be all wrong purely for that reason! I cant argue against those points because they are 100% right, just its from moneyweek so must be wrong.
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Comments
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Flight2quality wrote: »Harrods and Poundland both reported record results this week.
That nicely sums up the state of the global economy.
Of course the thing that all commentators and economists have been looking for - a way to sum up the global economy.
Forget complicated things like economic growth, debt ratios and unemployment. Just look out for Harrods and Poundland results. Maybe there'll be a Nobel prize in the future when they set up the Flight2quality Harrods/ Poundland index.
Keep buying in the 'dips' mate.0 -
Of course the thing that all commentators and economists have been looking for - a way to sum up the global economy.
Forget complicated things like economic growth, debt ratios and unemployment. Just look out for Harrods and Poundland results. Maybe there'll be a Nobel prize in the future when they set up the Flight2quality Harrods/ Poundland index.
Keep buying in the 'dips' mate.
Do you realise you are actually saying good things about moneyweek? You are agreeing that the economy is in crisis and bearish about house prices and bullish about gold and silver prices?
Shock horror the house price bulls are now starting to agree that the economy is as bad as we have always said it was! :eek:0 -
Flight2quality wrote: »Do you realise you are actually saying good things about moneyweek? You are agreeing that the economy is in crisis and bearish about house prices and bullish about gold and silver prices?
Shock horror the house price bulls are now starting to agree that the economy is as bad as we have always said it was! :eek:
I think what I said was that Harrods and Poundland results were not a proxy for the state of the world economy.
I'm not surprised at your analysis of what I said though.0 -
Clutching at straws would you not say? I was saying you house price bulls are now being forced to accept the GFC is as bad as us gold and silver bulls were predicting it would be now.
If your only disagreement with that article is that the rich are getting richer and the poor getting poorer then, you are indeed clutching at straws.0 -
Shhhhh. The bulls don't do the "& the economy." part of this forum.0
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Flight2quality wrote: »
Hey I have an original idea, if the house price bulls can not think of a way to still say house prices will still go up even with all the social unrest because of the GFC,
What is thier manifesto for a better future? To curb company profits?
Many shareholders are just ordinary hard working people. They wont give thier money to companies if the returns on thier shares aren't worth the risk, so how would you propose getting capital to companies in order that they can invest in r&d?0 -
I walked past the camp this morning at 9am on my way to work. It'll surprise no-one for me to say that everyone appeared to still be asleep.0
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Flight2quality wrote: »They are all waiting for another nice dip in silver to spend their JSA and other benefits on bullion coins
Yeah but they'll only be able to afford a grand or so and what sort of person bangs on and on about that?0 -
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