"The Everything Bubble". Should we be concerned?
Discussion
If I knew there was going to be a problem this year, I would be counting my gains on my Caribbean island, rather than working for a living.
My view is that we have a looming disconnect in much of the developed world. Living standards are way beyond our means to pay for them. You only have to look at the impossibility of governments not borrowing more money to meet their obligations, let alone actually paying anything back. This is certainly true in the UK and the US. The fact that money is increasingly worthless (as shown by asset prices taking off) is the other side of this. I've never understood why a government bond at some pathetic rate of interest is attractive, you can pretty much guarantee that it will merely buy a cup of coffee in 30 years time.
So no predictions from me about when. I have no idea. But, I'm pretty clear that we're far from being "out of the woods".
My view is that we have a looming disconnect in much of the developed world. Living standards are way beyond our means to pay for them. You only have to look at the impossibility of governments not borrowing more money to meet their obligations, let alone actually paying anything back. This is certainly true in the UK and the US. The fact that money is increasingly worthless (as shown by asset prices taking off) is the other side of this. I've never understood why a government bond at some pathetic rate of interest is attractive, you can pretty much guarantee that it will merely buy a cup of coffee in 30 years time.
So no predictions from me about when. I have no idea. But, I'm pretty clear that we're far from being "out of the woods".
rxe said:
If I knew there was going to be a problem this year, I would be counting my gains on my Caribbean island, rather than working for a living.
My view is that we have a looming disconnect in much of the developed world. Living standards are way beyond our means to pay for them. You only have to look at the impossibility of governments not borrowing more money to meet their obligations, let alone actually paying anything back. This is certainly true in the UK and the US. The fact that money is increasingly worthless (as shown by asset prices taking off) is the other side of this. I've never understood why a government bond at some pathetic rate of interest is attractive, you can pretty much guarantee that it will merely buy a cup of coffee in 30 years time.
So no predictions from me about when. I have no idea. But, I'm pretty clear that we're far from being "out of the woods".
But are we living beyond our means? Yes, we may destroy the planet in a few hundred years but we can support the current number of people in the life style they generally expect. We aren't about to switch to half rations and start eyeing up who to eat next.My view is that we have a looming disconnect in much of the developed world. Living standards are way beyond our means to pay for them. You only have to look at the impossibility of governments not borrowing more money to meet their obligations, let alone actually paying anything back. This is certainly true in the UK and the US. The fact that money is increasingly worthless (as shown by asset prices taking off) is the other side of this. I've never understood why a government bond at some pathetic rate of interest is attractive, you can pretty much guarantee that it will merely buy a cup of coffee in 30 years time.
So no predictions from me about when. I have no idea. But, I'm pretty clear that we're far from being "out of the woods".
There was a discussion on Radio 4 about a month ago regarding leased cars. At some point they will be returned en masse and that could cause an issue as people don't buy another and/or there's an issue getting rid of these returned cars. Wasn't really paying attention as I buy cars outright.
Hoofy said:
There was a discussion on Radio 4 about a month ago regarding leased cars. At some point they will be returned en masse and that could cause an issue as people don't buy another and/or there's an issue getting rid of these returned cars. Wasn't really paying attention as I buy cars outright.
Pistonheads cliche bingo anyone? House price to earnings are gradually narrowing - they are historically high and the cause of numerous inter-generational issues. It seems, from current wage increases, the UK is about it inflate its way out of this and also toward higher GDP. Productivity is also finally making headway.
So expect interest rate increases and then, yes, some people will be caught swimming naked when the tide goes out, but I don't really see a massive correction, so much as a gradual erosion of real values due to inflation.
So expect interest rate increases and then, yes, some people will be caught swimming naked when the tide goes out, but I don't really see a massive correction, so much as a gradual erosion of real values due to inflation.
Greshamst said:
Hoofy said:
There was a discussion on Radio 4 about a month ago regarding leased cars. At some point they will be returned en masse and that could cause an issue as people don't buy another and/or there's an issue getting rid of these returned cars. Wasn't really paying attention as I buy cars outright.
Pistonheads cliche bingo anyone? Certainly, I'd pay for a 335d mapped, an MX5 and a can of Red Bull in cash.
Edited by Hoofy on Wednesday 10th January 16:53
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