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That's interesting, but have you got a link to the latest research you mentioned? We're half way through those three years now.some woman said:
Are we on the brink of a crash?
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Everything that we own already or strive to own...
If there are limited resources for other people to buy what you own, it becomes worth less and less...this is no different from the normal 'supply & demand', except that people are sitting on overpriced 'possessions' (assets) and the supply that is missing is money/credit!
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Climate change doesn't alter in a year or two years. It's something that alters over decades. Now you tell me why you think it still rains in Oz when everyone that lives there says it doesn't. Why are the reservoirs almost dry? What do you know that they don't?
One of us has some kind of mental problem grasping reality. Can you explain why you think you know what I believe? or did you just imagine it due to some kind of problem you have?
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OK. Actually it is the price that is declining. The inherent value does not. You can still live in a house, drive a car, keep food in a fridge, so its utility is undiminished.
Asset price inflation puts up the price of your house, or your tulip bulbs, but their value in terms of what they do and how you can use them has not changed. If you are using them for their purpose, rather than treating them as units of exchange, you are no worse or better off
You are assuming then that someone who buys a house does so just to live there..
Unfortunately in the majority of cases that is not so.
Not only do many see it as their 'pension', but many also see it as a vehicle to keep up their (often unsustainable) lifestyles!
And because the cost of housing is so high, the majority have no other assets to speak of, let alone savings or a proper pension!
So if the 'price' that someone is willing to pay for your asset goes down, then of course it's inherent value goes down as well if you have any other financial claim on your home!
And it's exactly the same (in reverse) about commodities. Their 'inherent value' has rocketed, and yet they can do more than they did before!
The situation facing the world is IMO unprecedented - not just another cyclical downturn. We have never had a downturn before where the world's population has exceeded it's capacity in food (overall) and energy production. And this time it could be that the west gets more than a 'bruising'!
You're still talking as if "inherent value" and "price" are the same thing. They're not.
buying an asset as a financial "investment" is not the same as buying an object for its utility.
If you buy an investment you have to recognise thats its value will go up and down. If you think prices only go one way you have a nasty lesson to learn and you deserve no more sympathy if you invest in houses hoping to make a fortune than if you invest in shares or gold bars with the same objective. Over the word, house price crashes are not uncommmon in developed western counries, and happen every 15 years or so. drops of of 25% - 40% are quite usual. Funnily enough, because it doesn't happen every day, people think it won't happen to them. "It's different this time" is never true.
Buying a house to live in, it doesn't much matter what its price does. If your house doubles or halves in value, so does the one you buy when you move house. No big deal.
p.s. I was interested that you said "And because the cost of housing is so high, the majority have no other assets to speak of, let alone savings or a proper pension!" Almost as if you think asset price inflation in houses is not altogether a good thing?
buying an asset as a financial "investment" is not the same as buying an object for its utility.
If you buy an investment you have to recognise thats its value will go up and down. If you think prices only go one way you have a nasty lesson to learn and you deserve no more sympathy if you invest in houses hoping to make a fortune than if you invest in shares or gold bars with the same objective. Over the word, house price crashes are not uncommmon in developed western counries, and happen every 15 years or so. drops of of 25% - 40% are quite usual. Funnily enough, because it doesn't happen every day, people think it won't happen to them. "It's different this time" is never true.
Buying a house to live in, it doesn't much matter what its price does. If your house doubles or halves in value, so does the one you buy when you move house. No big deal.
p.s. I was interested that you said "And because the cost of housing is so high, the majority have no other assets to speak of, let alone savings or a proper pension!" Almost as if you think asset price inflation in houses is not altogether a good thing?
"the meek will inherit the Earth".
people that have foolishly borrowed money against a buoyant house price, then spent that money on a depreciating product gets what they deserve.
i am beginning to think that consumerism is not all it is cracked up to be. seeing yummy mummies wafting along in their Chelsea tractors, oblivious to the fact that they only own one of the tyres , makes me chuckle.
especially when you think they are leaking money like a sieve!
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A proper pension? One of those things that fund managers invest in a very wobbly stock market that could crash overnight and leave them with nothing? Stick to bricks and mortar - at least it will still be there in the morning.
I havn't forgiven you for the last time
Ellals's words, not mine.
But remind me, how much has the FTSE dropped by in the last 12 months, how much a simple penion fund, and how much have house prices?
I'll start you off:
http://www.moneyextra.com/funds/UK/...year&mavg_period=&image_size=&time=1213390423
I'm not in that position (
), but you have deduced correctly...The 'I'm all right jack' attitude has a habit of biting people up the arse!
Having a large proportion of the population unable to afford a place to live is never a good thing IMO...
But the problem still remains, that another large proportion is overstretched, and the knock on effect could be disasterous!
No - a mixture of investments in safe and slightly risky schemes. And of course property..
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