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I was interested to read an observation made by a fellow blogger (writingsonthewall) on Robert Peston's blog (post 60), referring to where the current slight up-turn in house prices comes from ... and what we are yet to face (e.g. 'capitulation' & 'despair') - it chimed with a number of people reading the blog and with much of what I've been saying here too ... so I thought I'd summarise his comments here too ... and link it to my previous post ...
"... you can listen to all the optimism - or you can prepare for the worst and be pleasantly surprised if the worst does not happen. This graph (included below) beautifully explains where the mini-boom comes from. It's for the housing market but it applies to all asset bubbles (and we are currently moving towards 'return to normal') ..."
As pointed on in my last post, wealth manipulation 'transfers' wealth (e.g. share dealing, loans, mortgages, debts) ... whereas wealth creation is achieved by 'providing value' which 'creates wealth' (e.g. products, services, shelter ...).
House prices are starting to stabilise/go up again slightly (e.g. in the UK), partly as we've been building too few houses for so many years (nb a lot of projects have virtually stopped now too = i.e. we've stopped creating any more value - i.e. real value/wealth!) ... and partly due to the low interest rates at the moment (NB the gap between the rate at which banks now lend money compared with the Bank of England rate itself).
However asset (house) price inflation is arguably not what most hard-working families should be looking for ... as it simply means our children, and our children's children become forced into taking on more debt (and effective poverty/stress), for more of their lives (just to pay for a roof over their head) - so that the bankers/landowners can benefit from this more.
A reality check is due (as highlighted in the graph) and this hasn't happened yet ... but it will and the whole 'illusion of wealth' will go with it, alongside the current 'political' and 'economic' system ...
This will be further exacerbated when people realise that the politicians have effectively colluded with the bankers to take the future health, wealth and prosperity away from our children, and children's children (paid off in future debts/taxes), due to the colossal bailouts of the banks (who have made billions, have personally pocketed millions, and who are now doing exactly the same thing again - and all at our expense, and not from 'creating wealth', but by 'manipulating wealth!).
History says change will happen, and with the advent of the internet now, it's likely to occur in many different ways ...
