People Cannot Become Rich by Selling Ever More Expensive Houses to One Another (FT)

PasturesNew

Flicking through the FT this morning over my usual fresh croissants partaken on the patio at home (no, found it online really)... I thought this article was worthy of a mention:

http://www.ft.com/cms/s/0/68636996-0cad-11dd-86df-0000779fd2ac.html

It is high time the British realised a people cannot become rich by selling ever more expensive houses to one another

Which is the crux of the perception problem about wealth that people think they've got.

Generali

The economy we have at the moment reminds me of the place in Gullivers Travels where the economy is based on everybody doing each other's washing.

Very good piece, I like Martin Wolf.

PasturesNew

LOL/ Yes, that would be a splendid fit.

I've never read the book though.

neverdespairgirl

PasturesNew wrote: »

LOL/ Yes, that would be a splendid fit.

I've never read the book though.

You definitely should, it's one of the great political satires, along with Animal Farm.

Commonsensesearcher

http://www.timesonline.co.uk/tol/comment/columnists/alice_miles/article3768099.ece?Submitted=true

And the above is an excellent piece in The Times about the Brown/Darling plan to keep us buying overpriced houses off each other. I find it seriously scary...

teabelly

Finance is a third of GDP so our economy partly depends on us buying and selling houses to one another as well as swapping shares or currency. Also think of all the builders, decorators and other trades that have been kept in work because of the obsession with property. They were all dying off as everyone was going DIY so we have instead become a service economy where every pays someone else to do the things they don't want to or can't do. Shame I can't outsource a boring job and pay a cheap minion to do it for me while I sit at home

Money the banks and we have isn't real money any more. It is all inflated and deflated in millions of transactions each day. All wealth is fundamentally an illusion and has been for years. The write downs for the sub prime create holes in a balance sheet that isn't real either. Who can say what anything is really worth with any of these complex financial instruments any more anyway? If someone pays X for a house then it is worth X in a free market. 2 minutes later someone else might pay X+Z or X-Z for an identical house. A valuer can come along and decide it is in fact worth Q so who is right? 2 minutes later another valuer can come along and decide the actual value is F because it is a remortgage not a purchase and he wasn't swayed by any of the previous figures.