What makes this housing down turn different

[Ruprect]

bizarre

nonsense

This is the most accurate description of almost all of the posts in this thread.

[Ruprect]

Very good zeity. At least someone's awake.

[AtW]

Govt can print as much money as it likes. In a crisis it can let inflation do some of the dirty work.

3-5% inflation won't be enough in this case, effectively inflation is already at this level. If Govt starts printing money to let maintain overinflated house prices then it would result in huge inflation, we are talking here about 20-50%, do you understand what this leads to? It will start an inflationary cycle that is very hard to break because you will have to print more money to keep voters just barely happy - savings will be devalued, so are pensions, key products will begin to disappear - it would make sense to keep them off sale for longer because prices grow so fast - I doubt any of people have experienced this, but I did - in 1992 in USSR we had 2100% inflation and as I was finance student at the time (from 1993) I was following very carefully Govt actions to fight these things.

BoE knows perfectly that if they let inflation genie out of the bottle then it would lead to much worse consequences - especially investment wise, do you think people will want to invest into country where inflation is so high? No chance - UK is outside of Eurozone, so it's on its own now, it can have huge inflation as it can't gain stabilisation from countries like Germany and France that still produce goods that are in demand.

All signs so far are that BoE is clear in priority - not to allow inflation really kick in, politically Govt would have liked the opposite, but given it is Labour who was banging on how Conservative created inflation, then for Labour to step into same water would be rather hard.

[Sockpuppet]

Its different this time.

HTH

[sasguru]

3-5% inflation won't be enough in this case, effectively inflation is already at this level. If Govt starts printing money to let maintain overinflated house prices then it would result in huge inflation, we are talking here about 20-50%, do you understand what this leads to? It will start an inflationary cycle that is very hard to break because you will have to print more money to keep voters just barely happy - savings will be devalued, so are pensions, key products will begin to disappear - it would make sense to keep them off sale for longer because prices grow so fast - I doubt any of people have experienced this, but I did - in 1992 in USSR we had 2100% inflation and as I was finance student at the time (from 1993) I was following very carefully Govt actions to fight these things.

BoE knows perfectly that if they let inflation genie out of the bottle then it would lead to much worse consequences - especially investment wise, do you think people will want to invest into country where inflation is so high? No chance - UK is outside of Eurozone, so it's on its own now, it can have huge inflation as it can't gain stabilisation from countries like Germany and France that still produce goods that are in demand.

All signs so far are that BoE is clear in priority - not to allow inflation really kick in, politically Govt would have liked the opposite, but given it is Labour who was banging on how Conservative created inflation, then for Labour to step into same water would be rather hard.

Zzzzzz! Get a life, you sad sack....

[AtW]

Zzzzzz! Get a life, you sad sack....

That's not very clever. One would have thought that your City experience would teach you superior economics, but all you have got to say is a pathetic joke - pretty much characteristical of the City really - they only know economics when everything goes on the up anyway

[ratewhore]

Just skipped through this thread. What you're saying is, my house drops in price so much (I have 80% LTV) that I can't remortgage in 2 years time so I will go onto SVR which I won't be able to afford because the contract market would have shrunk so much I can't get work then the govt will buy a %age of my mortgage and rent a proportion of my house back to me at low rates as I would have wound up the Ltd and gone on the rock and roll?

Blimey...

[gingerjedi]

savings will be devalued, so are pensions

Phew... thank feck I have neither!

[sasguru]

That's not very clever.

Not trying to be clever. Just accurate. How old are you Alexei?
Life is passing you by as you wait for a chimerical future. Remember in the long run you are dead.

[snaw]

That's not very clever. One would have thought that your City experience would teach you superior economics, but all you have got to say is a pathetic joke - pretty much characteristical of the City really - they only know economics when everything goes on the up anyway

Yes. Unlike the superior economic education you received in the Siberian communist university for special kids. The modules were far superior to anything the city business types here ever studied ...