Damson

The pound will apparently hit rock bottom soon and the UK is stumbling blindly into recession if the media has anything to do with it. I wish they would all just shut up as it's putting the fear of God into so many people. As I said on here recently, a large house building firm's shares absolutely plummeted down to a pathetic 18p. Cue them then announcing that hard times were ahead and they were going to try to ride out the storm and hey presto, they very quickly dropped to 11p! Forecasts predicting a 70%, yes 70% fall in houseprices doesn't help. No one is doubting it's a complete mess, but everytime you turn on the TV and read the newspaper someone is professing doom and gloom - it's all so depressing. It was interesting though that Children in Need is set to reach a record amount. Is the recession really as bad as is being made out? Nintendo Wii's are apparently running out, there were massive queues for a new computer game (don't know which one) and you can't get an appointment at my hairdressers for love or money. I do of course know hundreds of people are loosing their jobs, which is horrendous and I wouldn't want to be seen as dismissing their misery though.

homewardbound

Yes i believe it is... I have been saying for years that UK was heading for a recession... no one would beliieve it would be as bad as the 80's but with the way house prices went up so quickly and credit was so frequently and easily given in the 90's and 00's then of course there has to be a price to pay.

Now the question remains as to whether it will hit australia as bad... I personally dont think so but then credit isnt rammed down peoples throats as bad as it was in the uK... although with homeowners able to borrow 8 x their income that will def effect the market...

Rudd is trying to help the situation giving us pensioners money before xmas and also families... I know i'm not going xmas shopping until i have the money in my hand.

Also able to get up $41,000 as a first home buyer is a great incentive as long as houseprices keep dropping then it will be worth while.

charlie5

Hi

There is a lot of sense in what you have said. The siuation is obviously not good but the media has undoubtedly made things worse.

Charlie

TheSubMainMan

The reason why the pound is falling so badly is because they just printed tons of new money to bail the banks out. The debt to GDP ratio is worse than the US. And the interest rates suck.

All that new money will show up in the economy next year as inflation. It seems that all the western economies are going to inflate their way out of this. Inflation is just a hidden tax, the more money they put in to the system (money from thin air) the more inflation you get. So everyone ends up paying for the bailout. Well everyone with UK pounds that is. So investors are selling sterling...I would suspect the UK will end up joining the Euro. They will say it's to stabilize the currency. But it's what they planned all along.

The same in the US, there talking hyperinflation over there next year. I'm sure they would have collapsed already, but for the election. There currency is being propped up at the moment. But that can't last... Who would want a US government bond! Pays 6% but inflation running at 12%! Durrrr’ Not that the official figures admit that.

Australia is also spending like crazy, Rudd is also hinting of borrowing to spend! Thus joining the inflation craze!

With all these currencies failing, wouldn't it be a good idea to have, say, a one world currency! O my, what a good idea....

O and yes it's all been done deliberately. This is first year economics stuff. They know exactly what they’re doing...

:-)

Buy gold, buy silver,

Just hope they don't manufacture another 9/11 to go in to Iran!

Sorry about the last comment, I just couldn't resist...

CDM

I thought the figure was something like $21,000 (for first-time home builders in Victoria at least). Where does the $41,000 figure come from?

- CDM

bcworld

I'd disagree with that. Aussies are hugely leveraged, my observation is that it's so much more common here for 'ordinary people' to own multiple investment properties / have margin loans to borrow to invest in shares. Margin calls are already forcing the fire sale of shares, I'd hazard a guest that investment properties are next with the inevitable effect on house prices and then the wider economy.

Australia and the aussie dollar is also being punished for being a commodities economy when commodity prices are crashing.

DrWho

Agreed. There's been some stats quoted on other threads that I think show Australia is more highly geared than either the US or UK... and there's a whole raft of properties for sale up Palm Beach just now...

lastone

Doesn't look like there wil be inflation next year as we're now looking at deflation!!

I'm not sure about the 70% drop in property prices, as most people I've spoken to in fianance expect the housing maket to pick up mid-2009 as first time buyers take advantage of 2% interest rates and the re-appearance of 90% mortgages, although this will mainly affect houses priced below £250000, the rest will have to wait a few years for it to pick up.

moneypenny20

Guff.

MTPockets

Seconded...

Think this thread is sort of missing the point. Most governments are operating on deficits but that's how things work - keep rolling debt over to pay for ongoing costs. 'Bankruptcy' isn't when you're in deficit (or that would include a huge chunk of western - and australian - civilisation) but when you can't afford to pay back creditors. That's not the case. Admittedly the size of the debt burdens are getting uncomfortably large and you do have to wonder how the US in particular is going to pay back their creditors when the world stops liquidating all assets to put them into US securities, starts selling US treasuries and the government is left having to service their debt at ever-increasing yields, but that's not the case yet. It will be later though.

22B

The media hasn't made anything worse. It's people believing the media and behaving accordingly that has made things what they are. Sheep.

jayr

I think it was a typo - the FHOG for non-new build is $14,000 (not $41,000) until July 2009

TheSubMainMan

I just want to say, I totaly agree. If only people where aware of just how self profiteering the owners of the mass media are... And just how few of them own all the publications.

Can you imagine what Internet is doing to them, giving people an alternate form of news, not one thats self centered. Sales of all news papers are down, ratings for news programs like CNN, BBC, are down.

There losing the fight for peoples minds, no wonder they want censorship in such a hurry...

sj oldfield

Also able to get up $41,000 as a first home buyer is a great incentive as long as houseprices keep dropping then it will be worth while.[/QUOTE]

$41,000...................thought it was $21,000????

Petals

Agree about the media but I worked in legal and watched people here in Aus borrow borrow borrow. Everytime we went to the bank tellers were supposed to sell money to us. The problem is that when house prices rose most people then had a lot of equity in their homes and they then borrowed for the boat, the four wheel drive, investment property, margin loans and of course now these have to be paid for and costs are going up all the time.

I kept thinking this can not go on there has to be a stop to all this it was like being in a candy store, you want this you can have it.

Now we are all going to pay. Us more than others as we are now self funded retirees with nowhere to earn a dollar.

I think that we probably do not know just how bad things are. The Iraq war has drained UK and USA and Aus to some extent and the Afghani situation continues to do that.

I don't believe throwing money at people is the answer and I don't agree with the first home buyer grant despite having children who would benefit. The large amount is for new housing and that just pushes the price of new builds up that is what happened in the early years of the first home buyers grant and it can be blamed for some of the big rises in property prices and therefore did not get homes for the people it was aimed at. Lower income people.

I am not against assistance but it needs to be means tested and targetted not carte blanch.

If they got rid of subsidising the private health companies an unfair burden on tax payers and middle class welfare it would save an enormous amount of money for health and also the budget. I am not against health insurance but I am against poor tax payers taxes going towards sit. Totally weird.

Off my soapbox now sorry peoples.