Credit deflation and the reflation cycle to come (part 9)

[Mandalorian]

Just now, feed said:

Depends if you think there will be a credit event or not.  Without a substantial increase or decrease in available credit, average house price is just going to drift downwards for years, with almost of the action being inflationary. 

But averages hide a multitude of sins and on an individual level they're not that helpful.  The UK market is really a bunch of small markets driven by proximity to places of employment and education.  YMMV. 

Again.  It's the whole predicting the future thing.  Which is very difficult.  Which is why I mentioned there's no way of pound cost averaging into a house.

House prices SHOULD have dropped from 2008 onwards, but they got propped up.

I can't see any more props and I do see economic shit coming down the pipe.  But do I want to bet a large amount of money on it?  No.

 

[JMD]

7 hours ago, Harley said:

A "lovely" read of why we are where we are, 'em out there and us in 'ere.  A snippet:

'In the current ‘left hemisphere dominated’ environment, we feel obligated to seek protection from concentrated political hubris in the form of inflation – an insidious force that, in the timeless words of economist Jacques Rueff, “consists of subsidising expenditures that give no returns with money that does not exist”'.

https://www.pricevaluepartners.com/the-bug-in-our-thinking/

Yes, McGilchrist is very good.

I also think that Dr Willbourn is a very understated and interesting thinker (psychologist and market researcher sounds a good combination). It's also interesting that he has relocated himself to SE Asia.       Here's his site and the full article...

https://www.hughwillbourn.com/post/49-a-vote-for-the-tories-is-a-vote-for-labour-is-a-wasted-vote

 

Edited May 6 by JMD

[Harley]

33 minutes ago, JMD said:

McGilchrist is very good.

I also think that Dr Willbourn is a very understated and interesting thinker. It's also interesting that he has relocated himself to SE Asia.

Here's his site full article...

https://www.hughwillbourn.com/post/49-a-vote-for-the-tories-is-a-vote-for-labour-is-a-wasted-vote

 

Ta. A great read and he's nailed it, although I wish Reform per se had not been mentioned for as one comment said:

"Endless talk about Reform but weirdly there is hardly a single person pointing out that it's not a party. It's an office collecting money which puts up paper candidates occasionally to get a protest vote. It has no members you can't join, no branches except in Derby which it inherited from UKIP no activists and a policy of 400,000 immigrants a year. It does not even have any general campaigning leaflets the keen can distribute. This all must be deliberate. Tice does not want a party far as I can see. If you point all this out people go blank as though none of it matters.

The Good Doctor who seeks to advise apparently does not know any of that. Try finding someone who has joined the party joined a branch and is out there building a presence in the community. It may be a protest group but a lot of people are being made fools of thinking it's a party and this article just adds to it.

Oh and the founder Farage legged it quite a while ago! He knows it's a no hoper outfit. He's said so. Got four million votes way back one MP (re elected) scars on his back.

Wake up!".

I have McGilchrist's book here ready to read having finished Sue Townsend's "The Queen and I"!   I probably should read the "Camilla" sequel first!

I sat up close and listened to him and it was a lovely moment.  Gentle, intelligent, and articulate.  A stark contrast to much that passes as such today.  He helped so much, renewed my spirit.

Another talk of his (with many links), courtesy of PVP:

https://invidious.poast.org/watch?v=OpCIHhw4i8g

Not a Messiah, just someone who said the right things, at the right time, in the right manner.

Edited May 6 by Harley

[Yadda yadda yadda]

1 hour ago, Long time lurking said:

That`s not right house price are high because money was cheap for a very long time ,yes there is a supply issue but it has very little to do with prices 

Prices were pretty stable for a very very long time when it was only building societies and local councils that could issue mortgages outside of the commercial property market ,they only took off with Thatchers big bang which enabled Banks to offer mortgages for the residential sector  

Read in context I thought it was obvious I was referring to demand including money supply. Lack of housing stock has caused people to be underhoused. Whether renting or buying they have less housing than they need or would have expected in previous generations.

[JMD]

12 minutes ago, Harley said:

Ta. A great read and he's nailed it.

I have McGilchrist's book here ready to read having finished Sue Townsend's "The Queen and I"!   I probably should read the "Camilla" sequel first!

You might also enjoy this interview...

 

 

Edited May 6 by JMD

[ThoughtCriminal]

19 minutes ago, Harley said:

Ta. A great read and he's nailed it, although I wish Reform per se had not been mentioned for as one comment said:

"Endless talk about Reform but weirdly there is hardly a single person pointing out that it's not a party. It's an office collecting money which puts up paper candidates occasionally to get a protest vote. It has no members you can't join, no branches except in Derby which it inherited from UKIP no activists and a policy of 400,000 immigrants a year. It does not even have any general campaigning leaflets the keen can distribute. This all must be deliberate. Tice does not want a party far as I can see. If you point all this out people go blank as though none of it matters.

The Good Doctor who seeks to advise apparently does not know any of that. Try finding someone who has joined the party joined a branch and is out there building a presence in the community. It may be a protest group but a lot of people are being made fools of thinking it's a party and this article just adds to it.

Oh and the founder Farage legged it quite a while ago! He knows it's a no hoper outfit. He's said so. Got four million votes way back one MP (re elected) scars on his back.

Wake up!".

I have McGilchrist's book here ready to read having finished Sue Townsend's "The Queen and I"!   I probably should read the "Camilla" sequel first!

That's spot on.

The Tories are hopefully going to be destroyed, but Reform aren't the answer. Tice is utterly useless as a leader and, as you mentioned, they have absolutely zero grassroots presence and no philosophical/ideological underpinnings and it's all by design.

[JMD]

7 hours ago, JoeDavola said:

For those who don't like the Gary's economics videos, please tell me:

1. Who else has a decent platform who is talking about things like falling real wages in such open and quite simple terms i.e. talks about it in a better way than he does.

2. Why the dislike of him in general? I havent watched all his videos so I dont actually recall him providing a solution yet but what he says is mostly spot on regarding the incredible accumulation/transfer of wealth and the end game in this just being a drop into greater and greater poverty for most people in each subsequent generation.

 

Ok, the below site suggestion is definitely not a 'decent platform', plus the guy is very (very) unpolished. But imo he does a good job of offering solutions, though I'm waiting for his 2nd/3rd parts.

He coincidentally doesn't like Garys Economics. However that's not why I suggest him, instead rather interestingly he was an economics student of Richard Werner.

https://m.youtube.com/@economicsetc.8729

 

Edited May 6 by JMD

[Axeman123]

1 hour ago, Long time lurking said:

If you were buying would you like to pay more or less for what you are buying ?

If I wanted all I could get I would maintain a marginally higher price, and gorge myself anytime the western price dipped. With what is coming I would be far more concerned with getting all the PMs physically inside my borders that I could in time than with the fiat price paid.

[JMD]

6 hours ago, Harley said:

We haven't tried them but have done some background research.  Our take away was that we were already closely aligned, although plenty of specific opportunities to improve such as using a CTA.  CTA sector performance had not been great but we have been expectant and heard today that the sector's performance was good in recent months (as have been our humble and constrained efforts).

PS:  Unfortunately CTA uses TA (looking at charts) so off limits to most here! 

But PriceValue partners recommend using trend/momentum funds so no TA expertise required, however i expect that investors can maybe only hold the funds outside of ISA/sipps. Plus the fund performance probably wouldn't match diy TA results? Though would be interesting to know what performance results they do achieve.

Edited May 6 by JMD

[JMD]

12 minutes ago, JMD said:

But PriceValue partners recommend using trend/momentum funds so no TA expertise required, however i expect that investors can maybe only hold the funds outside of ISA/sipps. Plus the fund performance probably wouldn't match diy TA results?

Though would be interesting to know what performance result their CTA funds do achieve. Which I guess they'd only divulge if they did a client portfolio review. Perhaps if @Pip321 had a review he could tell us some of their results?

 

Edited May 6 by JMD

[Pip321]

1 hour ago, Mandalorian said:

Again.  It's the whole predicting the future thing.  Which is very difficult.  Which is why I mentioned there's no way of pound cost averaging into a house.

House prices SHOULD have dropped from 2008 onwards, but they got propped up.

I can't see any more props and I do see economic shit coming down the pipe.  But do I want to bet a large amount of money on it?  No.

 

By predicting the future when talking about a ‘home’ then who takes the greatest risk….the man who buys or the man who doesn’t? And what’s the risk….one is risking a loss of money but the other might be risking their ability to buy in the future. 

I am no advocate of ‘property is the ultimate investment’ etc but I consider my main residence in non monetary terms. It’s my home….and all I told my kids was ‘don’t under any circumstances over pay verses comparisons’. New homes near us can be £375k and second hand 1960’s equivalents can be £250k….madness just for a grey kitchen and posh lighting. 

My lad was buying in the covid madness, sticking to the cheaper 1960’s semis and I managed to dissuade them from some awful houses where there were literally dozens of bids…..they waited until winter and all the fuss was gone. One house they looked at was £285k and I bet now it’s worth £225k, horrid angled garden, bus stop outside, small 5 foot front garden, busy road corner etc….and for £248k they got one that was extended, big garden, garage and much bigger footprint on a superb street.

The other factor was his mortgage is £625 pcm and his neighbour pays £1200 rent…

There are good arguments that the money he needs to buy would be better invested in the stock market but the reality is he isn’t a saver….so buying a house has forced him to save.

So he doesn’t think about the house as some sort of monetised investment and in-fact we are both bearish on property so he expects the value to fall but he hopes to have repaid £30k off the debt by the time the fixed rate expires….his aim, debt and rent free by 50, nice home, value unimportant.

It’s easier said than done…..and we go back to the whole timing/time in the market. But for property sentiment and timing are really important and can make 10/15% difference even in a steady market.

Not advice of course, buying is a very personal viewpoint. But my advice to anyone buying is to buy as though you think the market is just about to shit itself…..so patience over maybe a 6/12 month search, view lots and buy well. 

 

Edited May 6 by Pip321

[JMD]

6 hours ago, ONC said:

Yes, I can see more “sharing/renting” as inflation bites.

A lot of what people now buy, they only use infrequently/once, they only buy because they have the money and it is cheap (ie from China).  I remember my dad  renting power tools much more than people do now. 
 

Maybe more of this,  new cool name “library of things”

https://www.theguardian.com/money/article/2024/may/06/how-rental-libraries-of-things-have-become-the-new-way-to-save-money

 

 

I remember reading a lot about the 'sharing economy' about 10 years ago. As I recall the German companies Bosch and VW were in favour of it, that struck me as strange - but perhaps they were in the loop and knew what was looming economically!?

[Mandalorian]

10 minutes ago, Pip321 said:

By predicting the future when talking about a ‘home’ then who takes the greatest risk….the man who buys or the man who doesn’t? And what’s the risk….one is risking a loss of money but the other might be risking their ability to buy in the future. 

I am no advocate of ‘property is the ultimate investment’ etc but I consider my main residence in non monetary terms. It’s my home….and all I told my kids was ‘don’t under any circumstances over pay verses comparisons’. New homes near us can be £375k and second hand 1960’s equivalents can be £250k….madness just for a grey kitchen and posh lighting. 

My lad was buying in the covid madness, sticking to the cheaper 1960’s semis and I managed to dissuade them from some awful houses where there were literally dozens of bids…..they waited until winter and all the fuss was gone. One house they looked at was £285k and I bet now it’s worth £225k, horrid angled garden, bus stop outside, small 5 foot front garden, busy road corner etc….and for £248k they got one that was extended, big garden, garage and much bigger footprint on a superb street.

The other factor was his mortgage is £625 pcm and his neighbour pays £1200 rent…

There are good arguments that the money he needs to buy would be better invested in the stock market but the reality is he isn’t a saver….so buying a house has forced him to save.

So he doesn’t think about the house as some sort of monetised investment and in-fact we are both bearish on property so he expects the value to fall but he hopes to have repaid £30k off the debt by the time the fixed rate expires….his aim, debt and rent free by 50, nice home, value unimportant.

It’s easier said than done…..and we go back to the whole timing/time in the market. But for property sentiment and timing are really important and can make 10/15% difference even in a steady market.

Not advice of course, buying is a very personal viewpoint. But my advice to anyone buying is to buy as though you think the market is just about to shit itself…..so patience over maybe a 6/12 month search, view lots and buy well. 

 

I agree with much of what you say there, specifically that I wouldn't see a bigger house as part of the financial portfolio - more a place to store my stuff and sleep.

I'd just be annoyed if I bought a place, took a large chunk out of the capital pot to do it and then 2 years down the line could have got the same thing for 2/3 the price AND kept that other 1/3 invested.

[Axeman123]

20 minutes ago, JMD said:

I remember reading a lot about the 'sharing economy' about 10 years ago. As I recall the German companies Bosch and VW were in favour of it, that struck me as strange - but perhaps they were in the loop and knew what was looming economically!?

Sharing economy perhaps means commercial grade products required, and therefore less easily undercut by Chinese imports? Eg if a whole 12 flat block pay to take their laundry to the 1 flat with machines, then those machines would need to be much more robust that the £149 ones the 12 flats might each currently have. If private cars were replaced almost entirely by taxis the cars used as taxis would have to be a lot more robust.

I can imagine German manufacturers lapping that up.

[Mandalorian]

11 minutes ago, Axeman123 said:

Sharing economy perhaps means commercial grade products required, and therefore less easily undercut by Chinese imports? Eg if a whole 12 flat block pay to take their laundry to the 1 flat with machines, then those machines would need to be much more robust that the £149 ones the 12 flats might each currently have. If private cars were replaced almost entirely by taxis the cars used as taxis would have to be a lot more robust.

I can imagine German manufacturers lapping that up.

Not with German energy policy....

[montecristo]

2 hours ago, Mandalorian said:

Again.  It's the whole predicting the future thing.  Which is very difficult.  Which is why I mentioned there's no way of pound cost averaging into a house.

House prices SHOULD have dropped from 2008 onwards, but they got propped up.

I can't see any more props and I do see economic shit coming down the pipe.  But do I want to bet a large amount of money on it?  No.

 

Why bother staying in the UK.  I take it from previous posts you have no dependants?  Forget about buying a debt box just to look at the rain instead live like a king by renting in sunnier climes.

[Don Coglione]

2 minutes ago, montecristo said:

Why bother staying in the UK.  I take it from previous posts you have no dependants?  Forget about buying a debt box just to look at the rain instead live like a king by renting in sunnier climes.

Some people have families, friends, relationships, along with no desire to fuck desperate children.

[montecristo]

1 minute ago, Don Coglione said:

Some people have families, friends, relationships, along with no desire to fuck desperate children.

The lady doth protest too much, methinks

[Don Coglione]

2 minutes ago, montecristo said:

The lady doth protest too much, methinks

Clearly, you haven't thought very hard.

[montecristo]

Just now, Don Coglione said:

Clearly, you haven't thought very hard.

You clearly just jealous of people daring to leave the 9 to 5 office and retire early.

[Errol]

7 minutes ago, montecristo said:

leave the 9 to 5 office and retire early.

Given the money and means who wouldn't? The only reason 90% of people work is to get money.

[montecristo]

Just now, Errol said:

Given the money and means who wouldn't? The only reason 90% of people work is to get money.

Cheaper cost of living would mean you wouldn't need to work to SPA.  A least knock 10 years off it.

[Mandalorian]

31 minutes ago, montecristo said:

Why bother staying in the UK.  I take it from previous posts you have no dependants?  Forget about buying a debt box just to look at the rain instead live like a king by renting in sunnier climes.

Didn't you hear?  According to a since departed frog poster, we all live like kings now

 

Several reasons really.

1.  You'd always be a foreigner.

2.  Same shit.  Different place.

[Yadda yadda yadda]

2 hours ago, Harley said:

Ta. A great read and he's nailed it, although I wish Reform per se had not been mentioned for as one comment said:

"Endless talk about Reform but weirdly there is hardly a single person pointing out that it's not a party. It's an office collecting money which puts up paper candidates occasionally to get a protest vote. It has no members you can't join, no branches except in Derby which it inherited from UKIP no activists and a policy of 400,000 immigrants a year. It does not even have any general campaigning leaflets the keen can distribute. This all must be deliberate. Tice does not want a party far as I can see. If you point all this out people go blank as though none of it matters.

The Good Doctor who seeks to advise apparently does not know any of that. Try finding someone who has joined the party joined a branch and is out there building a presence in the community. It may be a protest group but a lot of people are being made fools of thinking it's a party and this article just adds to it.

Oh and the founder Farage legged it quite a while ago! He knows it's a no hoper outfit. He's said so. Got four million votes way back one MP (re elected) scars on his back.

Wake up!".

I have McGilchrist's book here ready to read having finished Sue Townsend's "The Queen and I"!   I probably should read the "Camilla" sequel first!

I sat up close and listened to him and it was a lovely moment.  Gentle, intelligent, and articulate.  A stark contrast to much that passes as such today.  He helped so much, renewed my spirit.

Another talk of his (with many links), courtesy of PVP:

https://invidious.poast.org/watch?v=OpCIHhw4i8g

Not a Messiah, just someone who said the right things, at the right time, in the right manner.

I wouldn't vote for reform. However, they are the only party I saw do any campaigning for the London mayoral election. They must have some sort of structure and volunteers to achieve that. The policies were all a list of expenses and not a coherent plan. I took a photo of the leaflet they handed me so that I could point out on another thread how each policy carried a cost without a plan to pay for it.

[Butthead]

Moving countries is a really big deal, it would be naive to think otherwise. For most posters here, so much of life in the UK is easy because we've been doing it all our lives and "know how stuff works".

Moving abroad with a native of that country is the best way. You have someone to tell you what's what, introduce you, help with any language barrier etc. I think there are a few bodders who have moved elsewhere with partners.

Moving abroad with a partner/family is do-able. You need to put all the work in to make friends and learn how things are done but at least you have your 'team' to help each other. It's hard though, look at how many people emigrate to Aus/NZ and then come back after a few years.

Moving abroad solo would be extremely difficult. The only way I could imagine it working was if you were moving abroad for your job, so had new colleagues to support you and ease you into the culture, and a purpose for being there.

Moving abroad solo to live in retirement would, in 90%+ of cases, just mean being lonely and isolated somewhere else. No amount of wealth or spending power is going to change that.