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The Great Depression


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A brilliant song by the Jam and coincidentally where we are heading now…. Back to the 1930s soon. Western economies starting to crumble.  
the cost of brexit, ridiculous amount of furlough and now war. Oh dear, its going to get horrible.

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The Great Depression would arguably never have happened, or at any rate been anywhere as bad as it was, without World War I and particularly the repercussions after it. 

I think it is unlikely we will see anything approaching that in our lifetime

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12 hours ago, Ally Bongo said:

The Great Depression would arguably never have happened, or at any rate been anywhere as bad as it was, without World War I and particularly the repercussions after it. 

I think it is unlikely we will see anything approaching that in our lifetime


i think we are heading there now.  inflation is the killer, got to get that sorted above all else.  Interest rates up, property price crash. Negative equity, keys handed back, etc.

difference now is that productivity is falling and we are almost in a recession.  Recession combined with high interest rates is going to be very bad news.
 

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“The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges, and they are angry at the crime, angry at the people who have come to take the fruit. A million people hungry, needing the fruit- and kerosene sprayed over the golden mountains. And the smell of rot fills the country. Burn coffee for fuel in the ships. Burn corn to keep warm, it makes a hot fire. Dump potatoes in the rivers and place guards along the banks to keep the hungry people from fishing them out. Slaughter the pigs and bury them, and let the putrescence drip down into the earth.

There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks, and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificate- died of malnutrition- because the food must rot, must be forced to rot. The people come with nets to fish for potatoes in the river, and the guards hold them back; they come in rattling cars to get the dumped oranges, but the kerosene is sprayed. And they stand still and watch the potatoes float by, listen to the screaming pigs being killed in a ditch and covered with quick-lime, watch the mountains of oranges slop down to a putrefying ooze; and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage.”
 John Steinbeck, The Grapes of Wrath

 

 

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Hmmmn yeah, living standards have been very high for the middle classes for some time.  I can see the argument for this having been engineered to ensure that the class system is retained.

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…… and you don’t have to downsize to a 6 bedroom gaff 😏

There is no doubt things have been engineered economically, it’s hidden in plain sight with interest rate controls and borrowing……. but that’s the way it is now so its the distinction between slightly sinister engineering vs economic management. 

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Heard this morning that Johnson is considering 50 year mortgages so that the burden of debt is passed down to your children.

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3 minutes ago, chaff said:

Heard this morning that Johnson is considering 50 year mortgages so that the burden of debt is passed down to your children.

Why would the debt pass down to your children? It's not the children who have borrowed the money.

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7 minutes ago, Orraloon said:

Why would the debt pass down to your children? It's not the children who have borrowed the money.

I assume the thought is that the property would've increased in value and so rather than inheriting debt it would be more a case of inheriting equity.  That though assumes that property prices will always increase and not fall.   Anyway, I'm not really sure how it addresses the real problem with getting people on the property ladder.  The issue isn't about the cost of servicing a mortgage because that is generally a lot cheaper than paying rent on a like-for-like basis, its the fact that people cannot save enough - because rents are so high - to get the 10% deposit required.

Sounds like yet another Tory headline that will never happen.

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On 7/1/2022 at 10:00 AM, Malcolm said:


i think we are heading there now.  inflation is the killer, got to get that sorted above all else.  Interest rates up, property price crash. Negative equity, keys handed back, etc.

difference now is that productivity is falling and we are almost in a recession.  Recession combined with high interest rates is going to be very bad news.
 

Again - it wont be as bad as the Great Depression which lasted a decade

In the early 1920s almost all of the "first world" countries were bankrupt because of WWI

Germany, France, Great Britain, Italy etc

The USA wanted the money back that it had loaned to the allies

The allies (being skint) demanded the Germans (who were skint) pay them reparations (Treaty of Versailles) and we know what happened after that 

You would need something on the same scale for a current depression to reach those levels

https://www.history.com/news/world-war-i-cause-great-depression

 

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2 hours ago, Auchinyell Sox Change said:

compared to what, comrade ?

I know you think you are being clever with the comrade remark and if it makes you feel superior have at it. But you haven't actually made any point

We can start by identifying some of the problems caused by capitalism such as increasing wealth inequality where the rich get richer and the poor get poorer. The unsustainable exploitation of the planets resources that is leading is towards climate catastrophe. The exploitation of people's labor, where people work harder for less and less. The corruption of the entire political process where the super wealthy and the politicians that are supposed to represent people work together for their own aims which is the complete destruction of democracy itself.

At the heart of capitalism is the philosophy of greed where the only metric that matters is making more money regardless of the consequences. You are exploited or you become the exploiter. I would say that not having these problems would be a good thing, if you can at least agree to that then maybe we can talk about alternatives.

 

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24 minutes ago, Freeedom said:

I know you think you are being clever with the comrade remark and if it makes you feel superior have at it. But you haven't actually made any point

We can start by identifying some of the problems caused by capitalism such as increasing wealth inequality where the rich get richer and the poor get poorer. The unsustainable exploitation of the planets resources that is leading is towards climate catastrophe. The exploitation of people's labor, where people work harder for less and less. The corruption of the entire political process where the super wealthy and the politicians that are supposed to represent people work together for their own aims which is the complete destruction of democracy itself.

At the heart of capitalism is the philosophy of greed where the only metric that matters is making more money regardless of the consequences. You are exploited or you become the exploiter. I would say that not having these problems would be a good thing, if you can at least agree to that then maybe we can talk about alternatives.

 

if i agree then ; what alternatives would you propose ? and which countries if any have used this model and got this right

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48 minutes ago, Auchinyell Sox Change said:

if i agree then ; what alternatives would you propose ? and which countries if any have used this model and got this right

Still waiting for you to agree.

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I read a very interesting piece recently about the link between property portfolios and rising house prices. Apparently in mid 90s wealthy people really started to purchase multiple houses and do the "rent them out to pay off the mortgage and sell when property prices are really high" trick.

This in turn made all the house prices rise because these people were willing to pay over the odds for a property because their only real consideration was getting the rent to cover the monthly cost.

There was some mental stat like 5000 rental properties in Edinburgh were owned by only 5 people.

Its things like this that need addressed by government however there is no insentive to do so as its themselves and their mates who profit from such things.

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36 minutes ago, Diamond Scot said:

I read a very interesting piece recently about the link between property portfolios and rising house prices. Apparently in mid 90s wealthy people really started to purchase multiple houses and do the "rent them out to pay off the mortgage and sell when property prices are really high" trick.

This in turn made all the house prices rise because these people were willing to pay over the odds for a property because their only real consideration was getting the rent to cover the monthly cost.

There was some mental stat like 5000 rental properties in Edinburgh were owned by only 5 people.

Its things like this that need addressed by government however there is no insentive to do so as its themselves and their mates who profit from such things.

An absolute scandal that has enslaved a generation. 

While I didn't disagree with the right to buy your council house, it should have been mandatory for local authorities to replace the housing stock that was sold off. And also made much more difficult for those houses to come into the hands of private landlords, when in fact further deregulation ensured the opposite happened. 

I think around half of ex-council houses now belong to private landlords rather than being owner occupied which is a disgrace. 

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1 minute ago, Toepoke said:

An absolute scandal that has enslaved a generation. 

While I didn't disagree with the right to buy your council house, it should have been mandatory for local authorities to replace the housing stock that was sold off. And also made much more difficult for those houses to come into the hands of private landlords, when in fact further deregulation ensured the opposite happened. 

I think around half of ex-council houses now belong to private landlords rather than being owner occupied which is a disgrace. 

When i was younger, somebody who worked with me had got a council house as she had got pregnant at 16. Fast forward a number of years and she was about to buy her council house for 25k. It was valued at 60k. She was also advised to wait 6 months as the roof was getting fixed at the cost of 5k. I remember her telling me that she only needed to keep it for something like 2 years before she could sell and basically take away 35 - 40k.

I remember feeing really aggrieved because I had bought my own flat on a 25 year mortgage. Basically rewarding people for irresponsible decision making.

There would be nothing stopping councils from selling to tenents at 25k but putting a clause in to say that whenever the house was sold they were repaid the difference up to the value of the house at time of sale. Ie 60k. So if the house sells for 60k after 5 years the owner gets there 25k back. If it sell for 70k then they get 35k back. The difference which was never really theirs in the 1st place could then be used to build more houses. This is how society should work.

I also think there should be increasing levels of tax for every property somebody owns so it gets to the point where owning more than 2 or 3 isnt worthwhile.

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It's also cause you can buy them and get a 10% appreciation per year just as an asset doing nothing. So they are bought not only to rent but also to just sit empty as an investment.

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13 minutes ago, phart said:

It's also cause you can buy them and get a 10% appreciation per year just as an asset doing nothing. So they are bought not only to rent but also to just sit empty as an investment.

The whole housing market is a complete shit show. Stock market is all over the place , but mainly down, and despite interest rates going up you are getting very little return for cash so folk with extra money are putting it in property which is fuelling the current house price fiasco with houses going for 20%+ over their value. 
I know I probably am more sensitive to the situation as my daughter has been caught up in it with her house purchase falling through and losing out on 8 other houses . And my sister is in private rent with her 2 kids and the owner wants to sell the house to capitalise on the market so she has been given 2 months to vacate with young kids.

Meanwhile multiple home owners are receiving multiple fuel grants. 

ARGH !! When did it all go so wrong 😩

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3 hours ago, Toepoke said:

An absolute scandal that has enslaved a generation. 

While I didn't disagree with the right to buy your council house, it should have been mandatory for local authorities to replace the housing stock that was sold off. And also made much more difficult for those houses to come into the hands of private landlords, when in fact further deregulation ensured the opposite happened. 

I think around half of ex-council houses now belong to private landlords rather than being owner occupied which is a disgrace. 

👍

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5 hours ago, Diamond Scot said:

I read a very interesting piece recently about the link between property portfolios and rising house prices. Apparently in mid 90s wealthy people really started to purchase multiple houses and do the "rent them out to pay off the mortgage and sell when property prices are really high" trick.

This in turn made all the house prices rise because these people were willing to pay over the odds for a property because their only real consideration was getting the rent to cover the monthly cost.

There was some mental stat like 5000 rental properties in Edinburgh were owned by only 5 people.

Its things like this that need addressed by government however there is no insentive to do so as its themselves and their mates who profit from such things.

When I came back from Nepal in 2007 needed a flat so my Mrs could get her visa and had absolutely no way of getting a deposit together so ended up renting.  One bed's were going before even going up so basically ended up having to take a punt on one for £550 a month - three years later, and £20k out of pocket, got a shared equity 3 bedroom house an hour down the road for £500 a month mortgage with 10 years to take on the additional 20%. 

The thing I remember though was the letting agent basically had someone new in before it was listed again and at £650 a month admitting the bloke who owned them had over 100 properties - she would phone him to buy more when demand was over supply and he would hoover up whatever was on the market.  No wonder 1st time buyers had absolutely no chance.   

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