BBC scaring on UK's ponzi house price bubble (10Aug10)

The BBC run a story on house prices, that they have fallen for one month, that MUST mean the economy is doing really badly.... nothing to do with the natural slowing of house sales during the summer months of course.

In any event, the Ponzi house price market needs a massive crash to correct the ridiculously overpriced homes, and once and for all make a house a home, not an investment opportunity. Every single recession in the UK has been caused by people betting on house prices.

Stop treating houses as something that drives an economy, it doesn't.

Recorded from BBC 6pm News, 10 August 2010.

Category:

News & Politics

Tags:

• asset
• bubble
• bbc
• scare
• story
• ponzi
• uk
• house
• home
• price
• market
• fall
• one
• month
• economic
• activity
• labour
• created
• ecession
• depression

[anyfekinnamewilldo]

@liarpoliticians Just to expand slightly on ur intro..the housing bubble is fueled by cheap credit from central banks..a state created monopoly on the money supply (not free markets) so it is the effect not the cause.

[liarpoliticians]

@anyfekinnamewilldo There may be lots of cheap credit, but is anyone putting a gun to their heads and telling them they MUST buy something, let alone buy on credit?

The people created their own mess, now the government (Labour and now coalition) is propping up the ponzi house prices whilst raping savers to keep borrowers interest rates really low.

To get the economy moving, something must be done with the ridiculous house prices.

[AnnoyedDragon]

Good god! Maybe, just maybe, houses will actually become affordable?

People seem to have forgotten that houses are a home, a roof over their head. It's not an investment, not a cash machine, it's a place you live. Treating it as anything else only made it difficult for low earners to get a home.

Mortgages seem to be self justifying. You need a loan to afford a house, but loans maintain demand at a given price; which causes prices to keep going higher.

Less loans, lower demand, lower prices.

[BloodguardGorak]

House price deflation is inevitable; first time buyers on an average wage can't afford to buy a house on a single income, and Buy to Let investors will see their rents come under pressure from government cutbacks and depressed wages. It's a buyers market. Also inflation will not help those trapped in negative equity, an increase in bank base rates will allow the bank to reposes your property, can't have the bank making a loss.

[DystopianUtopia]

@anon2999

Completely agree. House prices NEED to fall to equilibrium. Free market set interest rates, combined with a gold standard and 100% reserve requirement would sort this mess out. Free markets are not the problem; they are the solution.,

[DystopianUtopia]

@liarpoliticians

Do you think a gold standard combined with a full reserve requirement would be a good idea?

It definitely seems to me the solution. It would completely pop all these debt bubbles which are holding back real growth and investment, and it would send interest rates up high until people started learning to save. Once people started saving, interest rates would come back down and we could enjoy a sustianable boom for once.

And anyfekinnamewilldo is completely right BTW.

[TheTVLicence]

About fucking time!

Another bubble that needs to POP!

[danrayson]

It's funny how they've actually convinced us that a higher price for living in a home is a good thing. Lower price = better, it's really THAT obvious.

[anon2999]

Mostly due to the central banks and governments distorting the market. If they'd stop fucking with it, and trying to control people, things will work themselves out naturally.

[anyfekinnamewilldo]

@liarpoliticians Running up huge debts purchasing consumer good on credit cards is part of the problem, but there are more significant and far reaching consequences of central management of money. R u familiar with Austrian Business Cycle Theory?

The world is broken!