That's a whole lotta jiggling!
**waits for inappropriate quote (with pics please)**
But a fair point nevertheless.

All I'm asking is that people are open to the facts. There should be no "need" to buy. However, I fear my point is largely irrelevant to most people.

Yes economics is complicated, but some have a better understanding than others. I know I am no professional but I can certainly hold my own at the IFS meetings.

One huge problem that has beset Britain over the last twenty years has been the property mania. Everyone thought that it could be their solution to the stock market crash of 1987. They would use property to be their nest egg, and sell up to fund a happy retirement. Oblivious to the fact that taxes will take a huge bite out of that retirement fund whereas a pension is tax efficient. Then ignoring the fact that in order to get the gains they have to leverage themselves to the hilt to make it work. Then they ignored the fact that house prices can go down. The professionals were just as inept. The Government were also deluded as to rising prices. Then the biggest short fall of the plan was that in order to cash out you need buyers whose incomes have kept pace with property prices, and there were few of those. You only have to ask how much your house value went up and how much their income had. House prices trumped wages by a huge margin. It was inherently unstable. I could see a property collapse three years ago but did not know when it would strike.

Secondly when house prices fall they fall for a number of years and before they climb. They have fallen for little more than a year and so still have someway to go before they are stable again. Lowering interest rates to suck in more buyers will only work for a while. Fundamentally house prices are still too high.

As far as interest rates they should stay low for a couple of years but mortgage rates should be higher to avoid another property bubble. If you have a single interest rate then that is the consequence. Stable mortgage rates will hopefully stop any property bubbles and lower interest rates for businesses will help industry.

Most people on this forum.

Most people in the world do not own the land they live on. I doubt if it's as many as 1%.

I basically agree with you; but my reality is life in capitalist Britain.

I'm basically opposed to the bourgeoisie. "La propriété, c'est le vol!" (Pierre-Joseph Proudhon, 1840). However; I'm part of the system now and there's no bloody way I'm giving up my hard earned belongings!

Why do anarchists drink herbal tea? Because proper tea is theft

That is incorrect, just look at what is deflation doing in Japan. It takes more than a decade and they still can't get rid of it. And while you at it look at their growth in that period too if you need a proof of how bad it is...

I have seen that second video you linked before and I can't tell you it is full of sh*t. Maybe 10% of what they say is correct, the rest is a mixture of lies and half-truths so overall it is a wast of time. All it does is it misleads people even more

I haven't seen the first one but my guess would be the same for it too. I've also seen Zeitgiest and number of others so believe me when I say this: Youtube as a source of knowledge about finance sucks big time.

If you guys want to learn something read this: http://www.amazon.co.uk/Economics-Money ... 820&sr=8-8

Okay Japan has had deflation for nearly 20 years, but that was because they had a spectacular property bubble which is still not down to sensible levels. That is the reason for Japans deflation. The banks were left with trillions of yens of worthless loans. The government then flooded the banking system with money and kept the zombie banks alive. Which is what the UK and US governments are doing now. During that time the stock market has slumped for much of that time. Again it was over valued. Many of Japans companies were profitable through out that period.

Point of order. In context, I said:


The key phrase being “these are valid suppositions to make” meaning that from simple (or casual) observations these are valid conclusions to reach. However, I know them not always to be true. However, I would guess that the vast majority of people would reach this kind of conclusion. And here lies the problem: the machine is too complex for people to understand. If the machine is that complex and clearly very fragile, then why are we using it?

I decided to have a go at the beginning of this year, and so far I'm running at around 30% return on my initial investment. But I don't expect this to make me a lot of money, as to make real bucks you need to invest a lot at the beginning, which is something I'm not inclined to do, but at least I'm making something out of it (it's paid for my new PC, so that's a good thing).

Yes the financial system is complex and maybe that should be resolved by governments breaking up the big banks and others into smaller simpler businesses that regulators understand. By making the banks specialists again they can concentrate on what they do well. Standard Chartered is a London based bank that specialises in trading finance and has done very well the last few years being barely unaffected by the credit crunch. they did not suffer the losses from property value collapses around the world.