Property market 'heading for a fall in 2008'

Gorgeous_George

teddyco wrote: »

Everyone wants property more than anything and now is the time to sell!

...and live where?



GG

Generali

BobProperty wrote: »

What Generali said plus the following:
China (and others to a lesser extent) hold a lot of $ deposits. As soon as they get fed up with the US inflating the dollar by printing more of them (at about 10-12% is it?) they will want to exchange dollars for something more reliable in terms of real money (gold, real-estate, shares, €, SFr, Yen whatever). If they start selling dollars big time then either the dollar interest rate goes up to attract buyers or the dollar falls on the exchange markets and America goes into a protectionist recession (or a bit of both). Either way the "knock-on" effect on the UK will be noticeable.

Protectionism is a big worry. The US has a great history of it. My hope is that US consumers want to keep their ability to buy $3 T-shirts. My fear is that the people that make the decisions don't need to buy them.

Not sure what the Chinese and Arabs would make of a falling $. It's clearly not in either's interest for it to happen. The Chinese govt loses $10 billion each time the $ falls by 1%, the Arabs sell their oil for less if the $ depreciates. Things will get really interesting if oil starts to be sold for other currencies (€?).

Rick62

I read somewhere (just last week) that the arab states have started moving into a mix of other currencies, Euro, yen etc instead of the US$.

BobProperty

Generali wrote: »

Protectionism is a big worry. The US has a great history of it. My hope is that US consumers want to keep their ability to buy $3 T-shirts. My fear is that the people that make the decisions don't need to buy them.

Not sure what the Chinese and Arabs would make of a falling $. It's clearly not in either's interest for it to happen. The Chinese govt loses $10 billion each time the $ falls by 1%, the Arabs sell their oil for less if the $ depreciates. Things will get really interesting if oil starts to be sold for other currencies (€?).

It already is. I also found a conspiracy theory that points out that anywhere that sells or tries to sell oil in anything other that $ goes straight to the top of America's Most Wanted or gets invaded. Saddam Hussein was supposedly doing it, Iran is doing it....:eek:

You can argue that what happened in the "Oil Crisis" of the 70's was merely the oil producing nations keeping their income at about the same real level. The dollar had stopped being gold based and became a fiat currency as America struggled with recession and paying for Vietnam.

Generali

BobProperty wrote: »

You can argue that what happened in the "Oil Crisis" of the 70's was merely the oil producing nations keeping their income at about the same real level. The dollar had stopped being gold based and became a fiat currency as America struggled with recession and paying for Vietnam.

Good point. I remember an article in The Economist (very anti gold) that conceded that it would have cost a Roman about an ounce of gold to be dressed smartly and well. An ounce of gold was worth £341.53 at yesterdays PM fix. I reckon that would just about buy a decent suit, shirt, tie, shoes and underwear.

I can't think of a fiat currency has managed to retain it's value for more than a few years let alone 2 millenia. Perhaps the Arabs will decide only to accept gold for their oil. That really would be interesting.