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Post by SeanBroseley on Jul 2, 2010 11:21:20 GMT 1
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Post by thebosun on Jul 2, 2010 11:26:32 GMT 1
why what's up I have a huge portfolio
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Post by SeanBroseley on Jul 2, 2010 11:32:11 GMT 1
Then talk to your financial adviser. I've now posted some things on the original post. I've been reviewing these things this morning and feel nauseous, and chickened out for the the first time since June 2007.
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Post by Old Bucks Head on Jul 2, 2010 11:50:10 GMT 1
Then talk to your financial adviser. I've now posted some things on the original post. I've been reviewing these things this morning and feel nauseous, and chickened out for the the first time since June 2007. What are your thoughts regarding property? In particular residential property. After all, this is where many members of the public hold much of their "wealth".
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Post by SeanBroseley on Jul 2, 2010 11:56:27 GMT 1
I'm concerned that residential property prices will crash, but not as imminently as share prices.
There's talk is of mortgage availability being constricted again in the near future.
This is what has got me thinking about the delay on the publication of ONS figures, especially in light of the further links above: what if the figures were collated and came out showing an unexpected turn for the worse?
What is the reaction in government? 1) Take all steps to check the figures 2) Have a contingency plan in place for the banks in the event of the obvious market reaction.
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Post by neilsalop on Jul 2, 2010 12:08:41 GMT 1
Do you really think it's going to be that bad? I've got jack all savings anyway (like holidays too much), but a bad economy is bad for everyone and we've been really quiet at work for a while now and there were already redundancies last year.
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Post by SeanBroseley on Jul 2, 2010 12:17:02 GMT 1
Worse than the Great Depression. Especially as governments are making the same policy decisions Can't remember if I have posted this before. Anyway this 32 mins of video on youtube is worth a thousand words. www.youtube.com/user/KeenWalk#p/c/85D68F0BDB66365C/0/AlEQK4gyV94It's split into three separate videos. Also follow the third link above and read my comment at the bottom.
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Post by Deleted on Jul 2, 2010 12:20:34 GMT 1
Hi Sean. You've posted a lot on the board recently and I think we're all grateful for your views given your background and experience in finance. Can you point us towards the words of any commentators in the media who share your view on the outlook? I appreciate you've given plenty of links to articles etc. - who are the commentators writing regularly for the FT/ BBC etc. who share this outlook?
Cheers
Ant
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Post by SeanBroseley on Jul 2, 2010 12:26:47 GMT 1
Hi ant, Let's bypass journalists and go for a Nobel prize winner. Cast around this blog for this guy's absolute sense of horror of what is happening: krugman.blogs.nytimes.com/In fact every article in the right column under the heading "recent articles" will cover your requirements. BTW except in a world where the word "Keynesian" is used in the same way that a Republican politician would use the word sodomite, Steve Keen is mainstream. And two of my links above are to the BBC website.
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Post by Deleted on Jul 2, 2010 12:34:15 GMT 1
Cheers Sean
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Post by nicko on Jul 2, 2010 12:55:01 GMT 1
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Post by Old Bucks Head on Jul 2, 2010 13:13:41 GMT 1
Worse than the Great Depression. Especially as governments are making the same policy decisions We're turning Japanese. Keeping these "zombie" financial institutions alive by racking up sovereign debt could be a huge mistake. A short sharp shock would have been preferrable to the drawn-out mess that we're now in.
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Post by neilsalop on Jul 2, 2010 13:31:34 GMT 1
OK I've been wondering for a while now, who do we as a nation actuall owe money to? I keep seeing news reports and reading about all the billions that we owe, but someone must be lending it out.
Another thing, are they likely to send the baliffs round to value all the saleable items? You can usually stop the the baliffs entering your home, but with our border security they could have everything away before we even noticed them.
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Post by monkee on Jul 2, 2010 13:35:23 GMT 1
OK I've been wondering for a while now, who do we as a nation actuall owe money to? I keep seeing news reports and reading about all the billions that we owe, but someone must be lending it out. good question, what would happen if we just refused to pay it back? or just serviced the debt until we are in a better position?
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Post by SeanBroseley on Jul 2, 2010 13:36:10 GMT 1
Don't worry about the government debt or deficit before you think about the private debt, most particularly the indebtedness of financial companies, that is where this will combust.
I've also covered the short sharp shock approach in my entry on the notayesmaneconomics blog, and Paul Krugman is covering it in practically everything he writes currently.
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Post by Old Bucks Head on Jul 2, 2010 13:49:50 GMT 1
OK I've been wondering for a while now, who do we as a nation actuall owe money to? I keep seeing news reports and reading about all the billions that we owe, but someone must be lending it out. good question, what would happen if we just refused to pay it back? or just serviced the debt until we are in a better position? The government debt is held by individuals and institutions (insurance companies, pension schemes, banks, etc) from Britain and overseas. Oh, and some that was purchased by the Bank of England with some funny money that they created from thin air! What would happen if the state were to default? Similar to what would happen if you or I were to do so on our personal debt. It might prove difficult to tap the credit markets in future and would certainly be at a higher rate of interest to reflect the higher level of perceived risk.
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Post by monkee on Jul 2, 2010 13:56:58 GMT 1
good question, what would happen if we just refused to pay it back? or just serviced the debt until we are in a better position? The government debt is held by individuals and institutions (insurance companies, pension schemes, banks, etc) from Britain and overseas. Oh, and some that was purchased by the Bank of England with some funny money that they created from thin air! What would happen if the state were to default? Similar to what would happen if you or I were to do so on our personal debt. It might prove difficult to tap the credit markets in future and would certainly be at a higher rate of interest to reflect the higher level of perceived risk. Thanks, so if we default we would have to cut the cloth to our credit free income. Cant we live without credit? seeing as it is credit that seems to have got us into this mess, would that be a bad thing. p.s. when this all kicked off, i took money i had invested in stock related products and put it in a 3 year post office account that was related to inflation, is that money safe?
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Post by RBA on Jul 2, 2010 14:06:57 GMT 1
Worse than the Great Depression. Especially as governments are making the same policy decisions Can't remember if I have posted this before. Anyway this 32 mins of video on youtube is worth a thousand words. www.youtube.com/user/KeenWalk#p/c/85D68F0BDB66365C/0/AlEQK4gyV94It's split into three separate videos. Also follow the third link above and read my comment at the bottom. looked at all of these this morning as I said elsewhere i hope he is wrong but fear he may be right Keen certainly makes a persuasive case
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Post by Old Bucks Head on Jul 2, 2010 14:08:03 GMT 1
Thanks, so if we default we would have to cut the cloth to our credit free income. Cant we live without credit? seeing as it is credit that seems to have got us into this mess, would that be a bad thing. Personally I think we should clear the debt first and then live within our means. Easier said than done though. The western world is addicted to debt (pesonal, corporate and sovereign). Wealth is being transferred from west to east. Emerging nations like China are ultimately our creditors. Unless we can do something to reverse this trend then "living within our means" might not be the comfortable existance to which we are accustomed. Incidentally our politicians keep banging on about the deficit, but have little to say about reducing the stock of outstanding debt.
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Post by RBA on Jul 2, 2010 14:21:09 GMT 1
Sean thanks for your links and thoughts If Keen is right what are the short to medium term consequences? presuambly stock market falls of a cliff and unemployment rises house price fall repossesions rise would be interested in your thoughts
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Post by SeanBroseley on Jul 2, 2010 14:33:49 GMT 1
Debt deflation means that asset prices drop dramatically and so does aggregate demand, because aggregate demand is income plus credit. Rises in unemployment correlate with falls in M3 (debt being repaid and credit not being advanced).
At some point asset prices fall to a level that the survivors re-engage in investment. That only happened in the 1930s with an uptick in government expenditure. In the late 19th century the markets had to work it out for themselves and it took the best part of 20 years.
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Post by SeanBroseley on Jul 2, 2010 14:39:25 GMT 1
Living without credit means living without debt. Debt is money (only a slight simplification). Without the creation of debt then we would be looking at changing the way economic activity is organised. The only source of money would be what the government created. The money which the government creates is only a small part of the current money supply.
But thinking this way means you're not mainstream.
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Post by Old Bucks Head on Jul 2, 2010 14:50:18 GMT 1
Debt deflation means that asset prices drop dramatically and so does aggregate demand, because aggregate demand is income plus credit. Rises in unemployment correlate with falls in M3 (debt being repaid and credit not being advanced). At some point asset prices fall to a level that the survivors re-engage in investment. That only happened in the 1930s with an uptick in government expenditure. In the late 19th century the markets had to work it out for themselves and it took the best part of 20 years. Supply and demand will ultimately dictate price levels. Government spending can only cause a temporary change in prices. The crash of 1929 and subsequent depression didn't do any lasting damage to the US. It has since become the world's only superpower!
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Post by SeanBroseley on Jul 2, 2010 15:25:47 GMT 1
After a war that beggared all the other major countries.
"Ultimately". "Temporary". Joan Robinson once said that in the long term we're in another short term.
Prices will eventually fall to such a level where you would hope that a fire sale would kick start the economy. But that is what it will take where demand is not about preferences to consume/invest less because the price is too high, but about the disposable income effect of recession/depression and because of the reduction of credit/wider money supply.
That was helped in the 1930s by traditional economic policies being loosened (rather than abandoned) and then there was rearmament and different imperatives applied to the situation. The changing position of Philip Snowden is illuminating in his connection (particularly for the LibDems).
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Post by nicko on Jul 2, 2010 15:56:02 GMT 1
I must say that Sean's posts have been an education for a total economic dunce like me. So thanks for that Sean.
As some one who has no debt, apart from the mortgage (which I was once told was good debt) I feel a bit aggrieved that I may suffer for other peoples greed, fiscal mis-management and flawed economic ideology.
happens though eh?
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Post by Deleted on Jul 2, 2010 15:59:16 GMT 1
I feel a bit aggrieved that I may suffer for other peoples greed, fiscal mis-management and flawed economic ideology. surely the condems cant do that much damage in five years can they?
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Post by nicko on Jul 2, 2010 16:01:35 GMT 1
I feel a bit aggrieved that I may suffer for other peoples greed, fiscal mis-management and flawed economic ideology. surely the condems cant do that much damage in five years can they? Go away this is a grown up thread.
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Post by Deleted on Jul 2, 2010 16:03:34 GMT 1
surely the condems cant do that much damage in five years can they? Go away this is a grown up thread. bless
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Post by nicko on Jul 2, 2010 16:19:33 GMT 1
Go away this is a grown up thread. bless But your comment was totally inane. Unless it was a joke then I apologise and hahaha. Do you really think this about what political parties are in power? From what I understand the different economic ideologies used are all flawed in some major way. How a Government reacts is important, but I have a feeling that Labour would be in the same situation and would be pulled down in to a pile e however hard they tried to stop it.
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Post by monkee on Jul 2, 2010 16:58:29 GMT 1
But your comment was totally inane. Unless it was a joke then I apologise and hahaha. Do you really think this about what political parties are in power? From what I understand the different economic ideologies used are all flawed in some major way. How a Government reacts is important, but I have a feeling that Labour would be in the same situation and would be pulled down in to a pile s**** however hard they tried to stop it. absolutely right and i have been saying it for years. whoever gets in its the govt, they have little influence over "the industrial and military comlex"
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