It is Obvious

Chris Rick has got altogether too much to say

My house needs to be my castle

Posted by chrisrick13 on November 7, 2017

It is obvious: we’re doomed

House prices are a bubble.
They are too high from any perspective.
They are held where they are by us, the UK population who want and need house prices high. They are our wealth. At least that is the delusion that most of us are under.
The government wants them high. If they fall then the banks will go bust. A lot of people will go into negative equity and walk away leaving the banks in a mess…and the banks are too big to fail.
For the same bunch of reasons interest rates will be kept low. If not a lot of JAMS will walk away from mortgages.
The government would like high inflation to inflate away debt. But high inflation kills the JAMS as wages will not keep pace.
High inflation demands high interest rates. Kills the JAMS – they have no spare cash.  Kills us all as the government rolls over into high-priced debt.
If there is inflation then bond yields go up and the government rolls over into a lot of high-priced debt. It will default at some point. Then we look like Argentina or Iceland or even Greece.
If everyone sells the pound then it is only defended with higher interest rates.  Kills the JAMS.

Therefore the government will keep things just as they are for as long as they can. Maybe they see that they can manage up to a Labour victory in the next election (can’t believe I just said that).

(Step aside for a moment. Can you think what that nice Mr Corbyn as PM would do to the country? On Monday he talked about a national bank of reconstruction (or some such). It will spend on infrastructure and the like. It will invest in this country he said. It will borrow £1tn and spend it in short order. Who will service the loan and when will it be repaid? He might be good for us as he will bring on the reset and we need that as fast as possible. In the meantime he will put money into the NHS of which I will be big customer and he will protect pensions of which I will be relying on two.)

I think that house prices up will be kept up using any trick available. They will stay up for far longer than you think possible.

That means at least a couple more years that a house owner can hang on for and then find a bigger fool to sell to.

So there is a window to move to the Outer Hebrides (that will soon become a sub-tropical paradise) and realise a lot of cash. Keep some of it under your mattress as paper – cash will be king – but only for a short while. Put some into physical gold that you arrange to take possession of. Spread the rest into other countries and other investment types. Buy beans and shotguns. Go on a Bear Grylls survival course. Make a lot of friends in your neighbourhood.

Not very appealing. I think I’ll just hang on, put my fingers in my ears, close my eyes and sing “La-la-la” very loud.

It is obvious: we’re doomed to fail to act

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