Housing Boom

[Moscow Mule]

I think he meant the dollar:GBP exchange rate goes down.

Ah, that would solve the conundrum.

[NoddY]

There are many different types of 'inflation'. It generally means a decrease in the value of money. Therefore people who sell their time for money find the value of their labour less.

In the UK we have seen a marked decrease in the ability of money to purchase all asset classes, especially housing. People make up for this 'labour deficit' by incurring more debt. Monetarists argue the initial decrease in the value of money is caused by increases in the money supply (low interest rates). Ordinarily, such a rapid and pronounced decrease in the value of work would have people rioting on the streets as they find their labour to be literally worth-less.

However, undemocratic states, such as China, can artificially lower the value of their workers labour because, amongst other things, they don't have to finance legacy costs of industrialisation. Furthermore, world food production now exceeds world population growth. Thus food items and items exported from China have fallen in price, even in an inflationary environment.

Lower consumer inflation rates govern wage inflation. Thus, western wage inflation is low. Hence the value of labour remains low.

[Ollie]

The last time this happened there where loads of cheap houses to buy!

[wendigo100]

The last time this happened there where loads of cheap houses to buy!

Buy? Up north you got one free with a pound of tripe!