Property Prices are still moving higher in the midlands

You really know your apples, I had no idea that we had a "deflationary" economy for half of the last four centuries!

. What can be a problem is deflations where large amounts of debt have been built up since those debts then

OH yes, so you mean conversely, debt is eroded when there is "inflation".

If this is due to a credit bubble (debt-deflations almost always follow credit bubbles)

I am following this...and I do know about the Japanese economy, although I was not sure how bad it actually was...So japanese property prices are back to what they where in 1982!! That I really did not know! Are you suggesting this can happen here in the UK or is quite likely?

This means that people hold assets which don't match the debt out on them and steadily have more problems servicing that debt. In

Was there not some thing similar that happened in South America?

Basically the whole system ratchets down in a reverse of

Putting it all together Respected Mr. Holmes, what will be your general expectation. Can people still expand their businesses in this kind of climate? Will people still have propserity? --

Reply to
Stephen GoldenGun
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Sorry, but I had a good freind once called George Holmes, and I was referring to your goodself but got the name wrong:)

I was going to ask, how do you know all this about economics and the japanese model, you must be a professinal accountant or economist.

Reply to
Stephen GoldenGun

: Sorry, but I had a good freind once called George Holmes, and I was : referring to your goodself but got the name wrong:)

Mike Holmes, like the libertarian AI in The Moon is a Harsh Mistress.

: I was going to ask, how do you know all this about economics and the : japanese model, you must be a professinal accountant or economist.

I wish. I've just had a fascination/obsession with bubbles for 20 years and have a substantial collection of books about them. You've no idea how privileged I feel to have a ringside seat at the largest credit bubble in history.

On the plus side, I started predicting the 1987 stockmarket crash in

1985;the 1989 house price crash in 1987 and the 2000 stockmarket crash in 1998 so I have a solid record of being 2 years too early. Timing's a bugger.

On the minus side, I started predicting the credit bubble crash in 2000.

FoFP

Reply to
M Holmes

Well, accountants and financial analysts and general analysts are frequently getting it wrong. Look at what the different predictions where regarding the War In Iraq, how many times did we hear the word "stallingrad"? How different was the actual outcome than stallinggrad? I think many thousands of times different.

You've no idea how privileged I feel to have a ringside seat at the largest credit

And you've no idea how more and more nervous it make me every time I read your posts, as interesting as they are.

Reply to
Stephen GoldenGun

:> : I was going to ask, how do you know all this about economics and the :> : japanese model, you must be a professinal accountant or economist. :> :> I wish. I've just had a fascination/obsession with bubbles for 20 years :> and have a substantial collection of books about them.

: Well, accountants and financial analysts and general analysts are frequently : getting it wrong.

That's to be expected. Most will simply draw some graphs and extend the trend into the future. As a Kondratieff waver, I see things happening in cycles and thus that such strategies won't work in the long run. On the other hand, if folks didn't work that way, we wouldn't get the bubbles and thus the cycles. The same analysis applies to not being able to spot the peak. If folks could, then they'd all sell beforehand and it wouldn't be the peak.

: You've no idea how privileged I feel to have a ringside seat at the largest : credit : bubble in history.

: And you've no idea how more and more nervous it make me every time I read : your posts, as interesting as they are.

There's no need to be nervous about it. If you believe I'm right then prepare for it.

I'd like to note that Professor Charles Kindleberger, architect of the Marshall Plan which saved Europe, expert on credit bubbles, and writer of the seminal book "Manias, Panics and Crashes" died last week aged 92. Please raise a glass to him. I find it sad that he won't see the denoument of the latest and largest credit bubble which he was one of the first to identify.

FoFP

Reply to
M Holmes

: Can you believe one small story, that will amaze you! I am a person who : likes to get to the bottom of something, other people just let things go by : if they don't understand them or perhaps they don't care. Anyway, I was in : my lecture classroom one day, and the subject of "money" came up....the : lecturer was a graduate and was "teaching" at a level that was leading to a : "degree"...

: I have allways been fascinated by GOLD, and how we had moved away from : "gold" as being a standard. Now I had just read this book about how the : french tried to print their way into riches back in history some : time...before one of their revolutions.....so I really was interested to : learn more about the real deep meaning behind the stuff we all take for : granted.

That would be my countryman John Law's Mississippi Bubble, perhaps the French equivalent to our South Seas Bubble. As the bubble began to burst and Law's currency began to fail as people moved into gold in an attempt to protect their savings, he outlawed gold and sent soldiers into homes to collect it.

: Do you know I asked, her to explain money! She could not give me a correct : explanation of where the value of money comes from, she said that it was : "stuff that is amazing and goes round and round and has a value all of its : own" I kid you not, she used the word "STUFF" she clearly could not answer : that question, a simple question about where does our money come from and : what gives it its value...

The one thing governments are good at is making fools of people.

[Prof Kindleberger...]

: Yes I raise my glass to that gentlemen! And all the Americans who saved : Europe, financially and with there lives as well. Again this fact is so : often forgotten.

Indeed. I'm quite often upset at stupid anti-Americanism amongst people I meet.

FoFP

Reply to
M Holmes

Yes thats right "John Law" thats his name! Was he scotish? Yes thats right he outlawed the gold, and it all went horribly wrong, I am not sure what happened to him int he end, but he ended up scorned, and pilloried, I can't remember but maybe they even beheaded him as was the french habit at the time!

Yes I heartily agree, they are all so quick to jump up and down about being Anti American etc.etc. but people forget that without America, we would'nt have half the wealth we do, nor the freedom to enjoy it! Nice to meet an individual with a wide knowledge about things

Reply to
Stephen GoldenGun

:> That would be my countryman John Law's Mississippi Bubble, perhaps the :> French equivalent to our South Seas Bubble. As the bubble began to burst :> and Law's currency began to fail as people moved into gold in an attempt :> to protect their savings, he outlawed gold and sent soldiers into homes :> to collect it.

: Yes thats right "John Law" thats his name! Was he scotish?

Indeed.

: Yes thats right : he outlawed the gold, and it all went horribly wrong, I am not sure what : happened to him int he end, but he ended up scorned, and pilloried, I can't : remember but maybe they even beheaded him as was the french habit at the : time!

The French regent helped him flee the country and he died broke in Venice (I think) 9 years later. Ironically the French economy was ultimately assisted by the credit revulsion and the territories boomed.

FoFP

Reply to
M Holmes

:> Stephen GoldenGun wrote: :> : So, are you saying it will be a recession? :> :> It'll be called that until we start using the D word.

: We may not be using the D word yet, but it's there without actually : being called it. Tesco's and Homebase have been proudly advertising : for some time that their prices are lower than one or more years ago.

"This year's goods at next year's prices"? but I was thinking of the other D word ;-)

: Are they breaking us in gently?

They're doing a version of Comical Ali, telling us that all is well even as deflation drives its tanks past.

:> I just hope that really does turn out to be irony. If it turns out that :> what I needed was gold, corned beef and bullets in a bunker rather than :> a modicum of financial precaution, then I'll be scouring the waste dumps :> for food with the ex-homeowners.

: Would that be with the "other" ex-homeowners? I haven't been : following your domestic arrangements, but you did mention that you : were being "evicted" and were looking for somewhere else to rent. : You didn't buy, in the end, did you?

No. I managed to resist the impulse.

: I'm confident you'll be quashing that rumour before it even starts...

You know I'd hate to disappoint. If I bought, that really would mark the top.

FoFP

Reply to
M Holmes

:> > I just hope that really does turn out to be irony. If it turns out that :> > what I needed was gold, corned beef and bullets in a bunker rather than :> > a modicum of financial precaution, then I'll be scouring the waste dumps :> > for food with the ex-homeowners. :> :> Would that be with the "other" ex-homeowners? I haven't been :> following your domestic arrangements, but you did mention that you :> were being "evicted" and were looking for somewhere else to rent. :> You didn't buy, in the end, did you? :> :> I'm confident you'll be quashing that rumour before it even starts...

: Are you seriously being evicted?

I was evicted, yes. Quite why the landlady couldn't have just said her son needed the flat and asked us to make arrangements I don't know. However, it was relatively easy to find a new place and although we're paying more, it is rather more comfortable.

I have to admit there was a slight temptation to buy, given the hassle of being evicted and that we've now saved enough to buy a place outright.

FoFP

Reply to
M Holmes

Ahh thats right you have a good memory! He ended up living abroad, at least he escaped with his life, after all everybody was blaming him, as he kept on printing more and more money, that was his answer to everything, he just kept on printing and printing.

Reply to
Stephen GoldenGun

This is already happening in the IT service sector. I know I've gone on about the IT industry but, over the past 24 - 30 months, anyone working in the industry will have seen salaries fall and then plummet. It is no exaggeration to say that MacDonalds often now pays more than IT jobs requiring very complex and expensive to learn skills.

J.

Reply to
John Smith

:> : Yes thats right "John Law" thats his name! Was he scotish? :> :> Indeed. :> :> : Yes thats right :> : he outlawed the gold, and it all went horribly wrong, I am not sure what :> : happened to him int he end, but he ended up scorned, and pilloried, I : can't :> : remember but maybe they even beheaded him as was the french habit at the :> : time! :> :> The French regent helped him flee the country and he died broke in :> Venice (I think) 9 years later. Ironically the French economy was :> ultimately assisted by the credit revulsion and the territories boomed.

: Ahh thats right you have a good memory!

I saw a play based on him relatively recently.

: He ended up living abroad, at least : he escaped with his life, after all everybody was blaming him, as he kept on : printing more and more money, that was his answer to everything, he just : kept on printing and printing.

The quickest way to utterly destroy an economy.

FoFP

Reply to
M Holmes

I am amazed how many broadsheets, financial papers, etc - even the BBC - are now talking about deflation on a regular basis. A few months ago you would rarely see it mentioned anywhere in the Media. Now it is almost a daily occurence.

J.

Reply to
John Smith

When did he identify it?

J.

Reply to
jansub

Mike,

I've been following your postings on this for a few years now (I've even read a book or two from your reading list). It's not clear to me though how deflations work where there is a fiat currency - why would people hoard cash when the central bankers are printing it by the bucketload? Presumably this is what Greenspan et al hope will break the cycle - it seems intuitive that it it won't work, but I can't explain why it won't. Has there ever been a deflation with fiat money?

KotF

Reply to
KotF

This Subject that we have all been talking about is too important to just have as a footnote to another subject.

Can someone start a new thread and we can debate this further, I am finding it really interesting hearing all your different view points. Rarely do you find such intelligent people to debate such practical and real situations that are going on in the world.

Reply to
Stephen GoldenGun

If deflation means "decrease in money supply" then I doubt it.

The deflation of the 1930s was caused mainly by thousands of small-town banks failing as people ran to get their cash which had been multiply lent out. In other words, the money in people's account just plain vanished because claims outweighed bank assets. It's called fractional reserve banking and works well when only a small percentage of clients withdraw their money at any given time.

Today, with thousands of banks replaced by a few dozen (?), the central banks are confident they can bail out major failures via inflation (remember LTCM?). Some will be allowed to fail if they are small enough (e.g. Barings), so it is tactical.

So, all we need is a major run on Lloyds, RBOS or someone like that a la Argentina (who wouldn't let them at their money except in quotas). I am not sure what would trigger such an event.

Of course, there is asset deflation which is a much more common phenomenon. The stock market is currently going through that. Bonds and property are not (yet).

Then there is the "good" deflation brought on by improvement in the cost of manufacturing and servicing of goods being passed onto customers. Examples of this are movement of labour to cheaper Asian markets and improvements in technology such as PCs.

Regards,

Roland.

Reply to
Roland Watson

:> I'd like to note that Professor Charles Kindleberger, architect of the :> Marshall Plan which saved Europe, expert on credit bubbles, and writer :> of the seminal book "Manias, Panics and Crashes" died last week aged 92. :> Please raise a glass to him. I find it sad that he won't see the :> denoument of the latest and largest credit bubble which he was one of :> the first to identify.

: When did he identify it?

I remember an article by him being quoted on Prudentbear some years ago. I'd hazard 1999 but without hunting down the article, I can't be sure. It might have been 1998.

FoFP

Reply to
M Holmes

Its amazing how people get sucked into those pyramid scams..I'm fascinated by marketing and fascinated how people get into them? I mean to me pyramid is just a scam, a con, there is only the few who win, sooner or later someone down the line looses everything..its built on a falacy...I just can't imagine how people get hooked..

Reply to
Stephen GoldenGun

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