Where to invest money in a crisis

Computer_Beginner

GreatApe wrote: »

1: No they couldn't the only way companies could pay lower wages is if capital took a larger percentage of GDP relative to labor that is something you dont want to happen

2: There is no 'money' locked up in homes. And if you built 20 million homes homes would cost virtually nothing so the 'capital' that is 'locked up' in homes would be worthless

1. I don't understand what you mean. If workers housing costs are lower, they do not need such a high wage. That's why companies can pay less in countries like Romania.

2. Money is locked up in housing. If more houses were built, the prices of all homes would come down. Yes, the people who already own houses would get less if they sold their house. But those looking for somewhere to live would have to spend less on their housing.

For example, a man moves to the UK with £100k in his bank account. If he buys a house with £90k, he only has £10k to spend on other things.
If he can buy a house for £50k, he now has £50k to spend on other things.

Someone who has already bought a house worth £100k, cannot spend that £100k, unless they're planning to live in a tent. So it makes no difference to the other businesses, if their house is valued at £50k or £500k.

Computer_Beginner

GreatApe wrote: »

1: No

4: There is no way to build 20 million homes in one single year.
g

Yes, I know. I was using an extreme example to demonstrate the point that money used to pay for the house you live in cannot be spent elsewhere.

Computer_Beginner

GreatApe wrote: »

1: No they couldn't the only way companies could pay lower wages is if capital took a larger percentage of GDP relative to labor that is something you dont want to happen

Like many on the left your grand ideas are foolish because they do not stand up to reality and just show you up to be at a child level of understanding

GDP is just meaningless jargon, used by the MSM to brainwash the population. People survived, traded, fought wars and built empires long before this term was invented. It's hocus pocus, like QE and fiat currency.

I wouldn't consider myself "on the left". I just like to think for myself and not allow my thought processes to be manipulated by the politicians and their MSM.

GreatApe

Computer_Beginner wrote: »

1. I don't understand what you mean. If workers housing costs are lower, they do not need such a high wage. That's why companies can pay less in countries like Romania.

No just so wrong

Housing costs in the UK are low. Only 3-4% of homes transact in any given year and at least 2/3rds of those are buyers with previous equity in housing so almost no one (about 1%) of households actually pay the headline costs at todays prices.

The UK also has a huge amount of inherited and gifted wealth and a large part of that is housing gifted and inhered wealth. For all intents if you are UK born with UK born parents you will inherit a house or the capital to buy a house and nothing is cheaper than free.

See it is much more complicated than you thought

Take the opposite of a poorer country like turkey. They actually need to build a huge amount of housing and have compared to the UK very little inherited and gifted wealth. In the UK most the homes are existing homes just swapping hands in Turkey they need to double the housing stock over the next 20 years so most the homes bought are new they actually have housing costs while in the UK its mostly musical chairs

2. Money is locked up in housing. If more houses were built, the prices of all homes would come down. Yes, the people who already own houses would get less if they sold their house. But those looking for somewhere to live would have to spend less on their housing.

There is no 'money locked up in housing'
Credit is not fixed it expands and contracts

For example, a man moves to the UK with £100k in his bank account. If he buys a house with £90k, he only has £10k to spend on other things.
If he can buy a house for £50k, he now has £50k to spend on other things.

Homes are not consumption goods like cloths or food

Someone who has already bought a house worth £100k, cannot spend that £100k, unless they're planning to live in a tent. So it makes no difference to the other businesses, if their house is valued at £50k or £500k.

So you have figured out a way to magic up wealth without producing more goods and services. You are not the first to claim this nor will you be the last

Homes are a stock of capital
Their price is almost irrelevant
Only about 1% (Probably less) of households actually pay 'full price' while 99% do not

If house price movements up were bad for the economy and house price movements down were good for the economy then in 2008 when house prices crashed the economy would have been booming? and in 2015-2018 when house prices were generally going up the economy would have been crashing? But clearly the opposite happneed

You put the cart before the house. House prices do not drive the economy and jobs it is jobs and the economy that drive house prices

GreatApe

Computer_Beginner wrote: »

Yes, I know. I was using an extreme example to demonstrate the point that money used to pay for the house you live in cannot be spent elsewhere.

You are looking at just the individual

If I have £1000 income and buy a house that costs me £1000 a month in mortgage then I am skint and have no spare money for other things

But the person who sold me the house and put the proceeds in the bank now has £1000 a month in interest received which he can indeed spend (or keep in the bank and the bank lends it out for others to spend)

Mortgage payments are not a cost like electricity or food they are a transfer in the same way that if a parent gives their kid £10 sure the parent has £10 less to spend but the kid has £10 more to spend it isn't 'lost'

GreatApe

Computer_Beginner wrote: »

GDP is just meaningless jargon

No GDP is just a measure of value added by an economy.
In basic terms it is all the wages paid + all the investment returns + all company profits + all self employed profits + imputed rents etc

used by the MSM to brainwash the population.

:rotfl: your the one brainwashed by the internet experts into thinking it is meaningless jardon

People survived, traded, fought wars and built empires long before this term was invented. It's hocus pocus, like QE and fiat currency.

What the hell are you on about. There was mass before an electronic scales existed that does not mean your bathroom scale is irrelevant or meaningless jargon by the msm to fool you

I wouldn't consider myself "on the left". I just like to think for myself and not allow my thought processes to be manipulated by the politicians and their MSM.

No you would rather be manipulated by internet experts who proclaim everything is a conspiracy

For your own good I would advise you to distance yourself from this nonsense. people like you do not turn out well in adulthood or am I also part of the MSM establishment stopping you (and all your internet friends) from thinking for yourself?

enthusiasticsaver

Iain_For wrote: »

My approach to Brexit has been to increase the cash proportion of my already globally diversified portfolio as I will retire a month after the official leave date and need a healthy cushion to mitigate sequence of return risk. Was fortunate enough to put a sizeable sum in NS&I Growth Bonds at 2.2% before they were withdrawn.

Politically, I don’t see the uncertainty subsiding. The Leave vote, we are told, reflected the view of an alienated section of a divided society who had nothing to lose. The Brexit process has further alienated much of the middle ground who voted Remain and who now feel the main two parties don’t represent them and has further polarised and divided Britain (to say nothing of what it is doing to the Tory party). Brexit is not the solution to these divisions as it will not address any of the causes of that division. Quite a legacy we’re leaving our kids to sort out.

Totally agree. We kept a lot of my husbands TFLS back when he retired November 2016 and invested the rest globally. We are lucky in that we have good DB pensions too. Missed out on the N and S growth bonds though so most of our cash is invested at 1.5% but we know we will need to draw on it in next couple of years and don't want to liquidate investments. We have about £150k though in income stocks which are giving us between 3.5% and 4% monthly and our globally diversified portfolio is increasing by around 7-8% per annum.


We helped our kids buy homes and are just holding fire on any major financial decisions until after we know what sort of financial deal the UK gets with the EU. It is a total mess and this uncertainty is bound to have a negative effect on our economy.

evosy1978

The US markets will be tanking within the next 2 years and then all my money will be going into Bitcoin...

triathlon

Just one word
HOUSING!!!!
BTL if possible, but there are other ways.

JustABit

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