Please explain

Just a bank holiday mobile quickie.

On renters this morning

I read that consumer confidence is down for third month in a row

I read that the coalition are fully committed to dealing with the deficit. (I.E. Spending cuts public sector job cuts)

And I read that house prices are up 2% in May. The biggest rise since etc etc

How does all that work? Is there a parallel universe for house prices? Consumers are too nervous to buy fridges but happy to buy houses?

The flat I analysed in a piece a month ago remains on the market at £675k. Been there two months.
Flat in the same block still available for rent at £1750. Been there two months. Might be same flat. Who knows.
Two facts.
Fact one:
Sale price remains a massive 36 times gross rental.
Fact Two
Two months empty.

Bozo still struggles to see how assets of any kind, let alone houses (at least houses for ordinary working people) can be going up in this world of massive government deficits

Bozo remains confident that assets will be down by christmas. Especially the FTSE. And especially houses.

Sent from my BlackBerry® wireless device

Comments

[Bozo]

Well as a nation we blew it, yes. And it is right that we ALL take our fair share of the blame for this.
But we cannot avoid the fact that the hugeness of the government deficit of today is not solely due to Gordon wasting money on inefficient public services. It was caused by bailing out the financial system.

I know you hate it when i bash the bankers...but they have done more damage to this country than the inefficient NHS managers... and what they have taken from the system adds up to more than all the benefit fraudsters that have ever existed combined together.

When the govermnent does slash free services, the people that did the most damage will still be able to afford services.
The people thhe most damage will still whinge about paying higher taxes. They will still threaten to leave the country.

Many people in need of free services in the coming years will be in need purely because their jobs were lost as a by product of the excess greed of the bankers.

People keep stating the reasonably well proven fact that excessive taxation of high earners doesn't work... but I personally don't know who else should be paying for this mess.

Because so far the only people I see suffering are ordinary working people.

[Bozo's antagonist]

Bozo

Glad to have found you again.

I'd like to say something about morality in answer to your 'please explain' blogg.

The thing keeping asset prices up is public sector borrowing - without this money the UK economy would settle down to a much lower level of income, output and lower asset costs; and the price to be paid would be high unemployment. Public sector debt is currently forecast to hit £1400 billion by 2014. That's about everything the whole UK earns for a year. Our generation cannot pay this back - the annual interest alone will be about the sum of the UK education budget and defence budget. By the time Bozo collects his pension (probably at age 70 or 72) most of the debt will still exist, thanks to the magic of compound interest and inability of politicians to take tough decisions.

Here's the morality bit. Our generation inherited a golden economic legacy - fueled by emerging information technology, fluid finance,the spread of capitalism and the hard work of past generations. What are we passing on to our kids generation? Crippling public sector debt, culled public services, personal debt from university fees - and house prices around ten times those we faced when starting out in life - all caused by our penchant to borrow more than we earn, desire for unlimited consumer goods and determination to have 'free' public services that aren't efficient and make little economic sense. And here's the real sting - funny money supports high asset prices - and high house prices are effectively a tax on the young, by the old.

We're squeezing the economic life out of the next generation. We should be ashamed. As a nation, we had a great opportunity and blew it.