Preparedness for when

mardatha

GQ I've seen many manic bubbles meself. And I remember the 80s well - all those people who looked at us in horror when we said we didn't want to buy our council house... eyes round as saucers saying "Oh but you can't afford NOT to buy!!!" - oh yes I bloody well could lol - then we moved anyway and got a better one. And they all say "Oh you'd get £umpteen thou for this if you sold it!"... forgetting that we'd have to pay £umpteen thou to buy somewhere else to live.
Then the next mad bubble was all the smug types who went about saying "My money's in Iceland!"....Hmmm

GreyQueen

Yes, I can still recall those saucer-eyed stares now, it was as if people has been hijacked by a cult. The self-same people went very quiet as interest rates climbed towards 10%, then up and up...........a lot of peeps who are adults now haven't fully comprehended that these are extremely low interest rates, anomalously low, and that if they can't pay down mortgage capital/ other debts at these low rates, what the heck do they think they will be doing later when rates go higher?

I also recall conversations about 15 years ago with a lady, a businessman's widow who was then in her sixties, about living through the deflationary times of the 1970s in London. She and her late hubby had sunk some of their free money into antiques in order to preserve it from erosion due to deflation. I'm talking the kind of antiques which get sold by Sotherby's, not your local auction house, btw. She was steadily selling off some of these items in her retirement, and releasing the value which had been stored in them.

With the wisdom of the perfect rear-view vision of hindsight, she and her hubs might have been better buying krugerrands, but you wouldn't have been able to use them as furniture (most of her antiques were furniture). On the other hand, you would never have needed to dust them.;)

craigywv

GOOD MORNING ALL , what in the world is this planet coming to, I have just read they are making a fridge that tells you when your low on milk!!!!!!!!!!! is peoples lives taken over so much that they feel so important that they have to be "contacted,texted,or buzzed " to their phone by their fridge can they not take a nanno second to open the door.every day another lazy pointless item invented so the "must havers" can tell their "friends" they have it. I think kids now days are growing up with no concept of real life. say in 20 yrs when its the norm for the population to have the "new fridge" what more can they possibly invent . kids will be looking at a screen to tell them its time to go to the toilet and a robot will come and do it for them sorry rant over I cant believe people are sucked in by these things money wasting sh£$%.

GreyQueen

Hi craigyw, don't you find that you keep having to check it isn't 1st April when you read about such things? Utter foolishness.

I have heard the argument posited that a lot of things such as domestic applicances are effectively now as good as they are going to get, and the rest is bells and whistles, gimmicks and cosmetic tweaks, to differentiate brands and make us feel we should buy another one.

I have somehow acquired several IT peeps in my wider circle of friends. I'm talking peeps of the skill level which gets them headhunted internationally. So, I've asked each of them if they use a bog-standard ordinary computer to the limits of its functions, or have an ultra-special one? And, guess what? All of them tell me that they don't even need to test the limits of basic home computers, they are so over-supplied with capacity and extras which even the expert IT wallahs don't ever need to use.

My desktop PC, a putty-coloured behemoth, will be 12 y.o. in September this year. It's unsupported operating system hasn't fallen over yet (touches wooden head superstitiously at this point). And I'm perfectly able to do what I want to do with it, and rest easy when away from home, knowing that if I'm being burgled, this bulky item with no resale value whatsoever is still likely to be here when I return.

Hmm, mebbe I should do what someone once did with their carpy old car and stuck a notice on it; Please steal me, my owner needs the insurance money.:rotfl:

craigywv

yes GQ I do!!! and each time its getting more and more ridiculous xxx

Frugalsod

I see lots of comments about how you must have a percentage of your portfolio in gold, but the real problem is that these are from people whose business is selling gold in many cases. Also the collapse of fiat currencies is overblown, it is all relative. As long as we can still buy goods and services with pounds or dollars then we will still use them. Many of the problems we face today have been here before. Insolvent banks, mass unemployment and global tension and we are still using the same pound and dollar.

The fact is that in twenty years time the gold price could have collapsed as economic problems ebb. While the Chinese are buying gold in great quantities they are not even turning their own currency into a gold backed currency. It is a definite option for an EOTHWAWKI but I think that in those cases real skills, tools and food are far more valuable.

While I do agree with GQ that many have loads of debts and few or low income generating assets. The problem is that most property tycoons have not been especially skilled, they have used what assets they have and leveraged themselves into a ponzi scheme called housing which is dependent on being able to sell to a bigger fool. In the US where since the last crash the hedge funds have bought hundreds of thousands of homes and are now struggling to find a bigger fool to buy them. So they are now trying to securitise them. This is the same sort of product that caused the last financial crisis and so the only prospect of them being sold is that they fraudulently claim that they are safe as houses.

Also rents are dependant on people being able to afford them. If housing benefits were scrapped what would the low paid do? They might move in with family and you could get far more people living with family members and the numbers of renters would plummet. What would happen to B2L landlords and house prices in that situation? People will need somewhere to live but what they will do is cram themselves in with friends and family.

Even here the baby boomers who will try and sell their B2L to pay for their pension will eventually find that there is no one left to buy. The younger generation are giving up the dream of home ownership preferring to rent instead, and in the US even the dream of owning a car is becoming something that fewer are aspiring to. Car manufacturers have called them Generation N for neutral about driving http://www.cnbc.com/id/47962606

So I think that long term property buyers are looking at massive losses, and they will eventually have to revert to mean 3 times single median income which means less than £80 000. The fact that two incomes being required are now the norm does not make the equation any easier if house prices fall to say only £160 000. Look at Japan where prices have fallen for more than 20 years.

Frugalsod

craigywv wrote: »

yes GQ I do!!! and each time its getting more and more ridiculous xxx

The interesting thing is that someone will buy it. Whenever I see a new product I will think who will this really benefit. Now for a big family coming and going it can be useful if someone was in the shop when they get the warning SMS. Though on further thought most people have coped for years without by making sure they have enough emergency rations just in case, and you haver to live in a pretty dysfunctional family not to communicate the lack of milk in the fridge. After a while you get to know how much milk your family goes through. I know that 4 pints of milk could last me a whole week, but that can vary by a few days depending on what meals I prepare.

Cheapskate

When we got married in the late 80s, we were dithering over whether to rent or buy, but then got very lucky and bought a back-to-back for £11k, six months later our neighbour bought theirs, exact same model, for £18k. We could have borrowed a lot more, but I was expecting our first child and we worked things out based on DH's income only. Good job we did, cos over the next couple of years, the SHTF re mortgage rates went sky high, and money was so tight it bliddy squeaked for a several years!

A xo

RAS

I remember that Cheapskate.

I was coming out of relationship with x, which meant I had a deposit and a job but in that 6 months (the rules on tax relief on properties were changing), prices went nuclear. I knew people who bought a house they had not even seen.

I was gazumped twice and then decided to stay in rental because the balloon would burst.

Two years later I bought at about 70% of the prices being asked when I backed out. The interest rate was massive (15%) but dropped during the first year.

A lot of people who went with the panic got burned, losing nearly half the value in a year or so.

Butterfly_Brain

This is scary for anyone who thinks that smart metering is a good idea

http://www.youtube.com/watch?v=v2aL8t5DXNk