2015: The Bubble Bursts!
Discussion
House prices, the eurozone, classic cars, the Chinese economy, gold, the US $ etc.
I'm no economist however people have been predicting burst bubbles for a long time yet nothing seems to happen. At this rate most of us will be dead or too old to profit/benefit from the 'crash'. And in the meantime those riding the waves are making lots of money.
I'm no economist however people have been predicting burst bubbles for a long time yet nothing seems to happen. At this rate most of us will be dead or too old to profit/benefit from the 'crash'. And in the meantime those riding the waves are making lots of money.
Wills2 said:
Jimbo0912 said:
4) Broadsheet and even tabloid press articles touting classic cars as 'investments' - if this isn't a warning sign, then I don't know what is!
There are MANY signs with regards to a repeat of the 80's classic car bubble particularly in Ferraris. The only difference this time is historically low interest rates. How significant that is remains to be seen but it's likely contributed to the mania lasting a lot longer than some expected.
However, with regards to the Miura S for sale at Amari for £1.25m, it's probably only worth £700k at best as it's a fake SV. Hence, the market price for an S would have to rise at least another £500k for that car to make any kind of financial sense whatsoever. If that Miura at Amari's is an investment, then my name is Pope Jean Paul II. This isn't an isolated occurrence either.
I think we'll start to see major cracks when the buy and sell price diverges significantly which it undoubtedly will looking at current projections. There's only so long that dealers and speculators can continually pass this hot potato. When speculators realise the game is up, there'll be a mass exodus and an over-supply of cars. This will be deleterious to prices.
Jimbo0912 said:
Wills2 said:
Jimbo0912 said:
4) Broadsheet and even tabloid press articles touting classic cars as 'investments' - if this isn't a warning sign, then I don't know what is!
There are MANY signs with regards to a repeat of the 80's classic car bubble particularly in Ferraris. The only difference this time is historically low interest rates. How significant that is remains to be seen but it's likely contributed to the mania lasting a lot longer than some expected.
However, with regards to the Miura S for sale at Amari for £1.25m, it's probably only worth £700k at best as it's a fake SV. Hence, the market price for an S would have to rise at least another £500k for that car to make any kind of financial sense whatsoever. If that Miura at Amari's is an investment, then my name is Pope Jean Paul II. This isn't an isolated occurrence either.
I think we'll start to see major cracks when the buy and sell price diverges significantly which it undoubtedly will looking at current projections. There's only so long that dealers and speculators can continually pass this hot potato. When speculators realise the game is up, there'll be a mass exodus and an over-supply of cars. This will be deleterious to prices.
Hoofy said:
Claudia Skies said:
Wills2 said:
Even more so when Quentin Wilson fronts a TV show telling people to get on the band wagon.
Totally agree with that! He really has become a complete muppet.P-Jay said:
I'm lost - Housing Bubble, Classic Car Bubble, Economic recovery/boom, Pork Futures?
How's Gold doing?
Weirdly despite the propaganda the 3rd one isn't happening across the meat of the economy from my perspective, I had to laugh when the BBC announced that wage rises were now matching inflation, er what inflation?! How's Gold doing?
I have some time for the OP's position, but he doesn't set out why thoroughly enough to be totally convinced. That said, these things are of course difficult to predict.
We now have EU QE (and didn't the BoE/Osborne not rule out further QE here recently?), would this be enough to prop asset prices up? Will the government go even further than it has to artificially inflate prices? Was what I recall BoE/Osborne saying about QE recently a warning about what they can see coming down the line?
Edit: Apologies, he ruled out further QE, but said that we will never fully unwind QE.
https://uk.finance.yahoo.com/news/bank-englands-ca...
http://www.independent.co.uk/news/business/news/ma...
We now have EU QE (and didn't the BoE/Osborne not rule out further QE here recently?), would this be enough to prop asset prices up? Will the government go even further than it has to artificially inflate prices? Was what I recall BoE/Osborne saying about QE recently a warning about what they can see coming down the line?
Edit: Apologies, he ruled out further QE, but said that we will never fully unwind QE.
https://uk.finance.yahoo.com/news/bank-englands-ca...
http://www.independent.co.uk/news/business/news/ma...
Edited by Esseesse on Tuesday 10th March 17:22
It's all going tits up but it's not a bubble.
Bubble implies over valued, but in practice its your currency that is devaluing like a brick as the trillions of debt that won't be repaid in future expected ponzi payments becomes realised more and more. The rumblings were in the mid 90s but it's had the can kicked for a few decades more.
From that frame of reference some 'bubble' assets are likely staying flat, while others 'moving sideways' are dropping hard.
Gold is a good baseline but there are suggestions most of that has been leveraged using paper, so it's true value isn't being revealed.
Own outright what you do own. Own useful things like vans and stuff, not classic cars that are luxury novelties.
How it all unravels is anyone's guess but it's gonna be messy. At some point a ponzi has to break in a finite system.
Great timing that we have an escalating war with Russia and destabilised Syria, Libya and Iraq to distract us.
Blame the bankers!
Bubble implies over valued, but in practice its your currency that is devaluing like a brick as the trillions of debt that won't be repaid in future expected ponzi payments becomes realised more and more. The rumblings were in the mid 90s but it's had the can kicked for a few decades more.
From that frame of reference some 'bubble' assets are likely staying flat, while others 'moving sideways' are dropping hard.
Gold is a good baseline but there are suggestions most of that has been leveraged using paper, so it's true value isn't being revealed.
Own outright what you do own. Own useful things like vans and stuff, not classic cars that are luxury novelties.
How it all unravels is anyone's guess but it's gonna be messy. At some point a ponzi has to break in a finite system.
Great timing that we have an escalating war with Russia and destabilised Syria, Libya and Iraq to distract us.
Blame the bankers!
Mr Whippy said:
...
This is something I have wondered for a while. If 'the system' collapses (partially or whatever), money is worth increasingly less, are equities not a better place to be? Although I suppose it might depend on the business and it's ability to survive the conditions and it's locations?Good point and I was tempted to mention it too.
Is a real productive equity in a business model and market you believe in through thick an thin, a bad thing to hold longer term if things go tits up?
The 'value' could drop 10x but if at that point they are good value looking forward then fair play.
Given most of us will have bought from 80's onwards we've all over paid into an increasingly bubbly debt based system any way.
I suppose the gamble is how deep and bad a correction is.
Another can kick event?
A return to Austrian economic theory and abandonment of completely failed banks and currencies?
A collapse beyond economics?
Depending on what happens will impact the value of investments I suppose.
Ie, physical gold is great unless government decide they want it and ban trading ala USA depression and a bulk of Cold War era.
Russian equities, great gamble unless we end up at war and they are confiscated.
Bitcoin, brilliant for pure protection, but risk of no access to wealth if Internet as we know it disappears or trading it back to cash in UK is banned.
UK cash, great if your happy to see value drop, alongside a general value drop. Fairly safe. But assumes we don't have Cyprus style events.
Too many variables still.
I'm going super wide and diversified at this point because I've no idea what will play out but I have a feeling the can kicking routine is worn away now...
Is a real productive equity in a business model and market you believe in through thick an thin, a bad thing to hold longer term if things go tits up?
The 'value' could drop 10x but if at that point they are good value looking forward then fair play.
Given most of us will have bought from 80's onwards we've all over paid into an increasingly bubbly debt based system any way.
I suppose the gamble is how deep and bad a correction is.
Another can kick event?
A return to Austrian economic theory and abandonment of completely failed banks and currencies?
A collapse beyond economics?
Depending on what happens will impact the value of investments I suppose.
Ie, physical gold is great unless government decide they want it and ban trading ala USA depression and a bulk of Cold War era.
Russian equities, great gamble unless we end up at war and they are confiscated.
Bitcoin, brilliant for pure protection, but risk of no access to wealth if Internet as we know it disappears or trading it back to cash in UK is banned.
UK cash, great if your happy to see value drop, alongside a general value drop. Fairly safe. But assumes we don't have Cyprus style events.
Too many variables still.
I'm going super wide and diversified at this point because I've no idea what will play out but I have a feeling the can kicking routine is worn away now...
Interesting post. I also wouldn't underestimate how far cans can be kicked. I suppose the dream way of overcoming our current debt issues is lots of inflation, but importantly also wage inflation. If that occurs in a relatively controlled way, then anything other than cash is better. Renovate your house now, not later.
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