Tuesday 17 June 2014

Housing Bubbles



The UK housing bubble is one of the worst housing bubbles in the world. But its not linked to a positive economy overheating, but to a fake economy divided. This is, especially so as affordability with falling incomes, rising costs of living, falling disposable income of poorer to middle-income brackets and of a new underclass of the poorest, offset by massively rising incomes of the richest, a serious lack of house building over decades and an increasing population, an economy fuelled on debt and on accelerating the housing bubble, pumping it up further, especially in cities that are dislocated from the country as a whole such as London and the South East region, over-represented by wealth and lack of space to accommodate overheated business in the region and an acute lack of housing, with vastly over-inflated house prices and rents, offset by declining economies away from that region.

These contrasts in the UK economy, based on regional variation and a polarising of two nations, rich and poor. This disguises a current economic failure and collapsing banking system, an economy with reliance on the financial services sector amongst the biggest in the world and as such a failure of UK financial services could easily lead to a global financial collapse. With massive aftershocks in US, Europe and around the world, with much finance based in the City of London financial district and the reliance of the UK economy on the City, made even worse by adding education and health service provision to city investors and gamblers. This level of reliance on this sector exceeds in proportion and massively so in scale, Iceland before the crash and Cyprus, far exceeding Greece and Spain. Debt risk in UK, if unwound would present another financial crisis, in one of the world's leading economies in terms of wealth or rather debt in the system. This time there is no room for further QE ( Quantitative Easing).

The systemic risk could be exposed by tightening QE and or lending rules to mortgage borrowers, with millions exposed. It is no longer 'normal' capital economics, but an explosive mix of Corporatism, kleptocracy, massaging and fake official government statistics, hidden debts, an increasing shadow banking system taking huge risks, with complex instruments such as credit default swaps back in the game.


Related article, showing how exposed millions of UK people are to the massive debts if interest rates rise and/or banking regulations tighten, by Matthew Whittaker of Resolution Foundation:


http://www.resolutionfoundation.org/blog/2014/jun/17/banks-conundrum-countdown-tightening-policy-shadow/#.U6Bx_dUfmGQ.twitter


Millions in UK living in squalor, as not enough properties built and with the poorest living overcrowded, in the smallest properties in Europe:

http://www.independent.co.uk/news/uk/home-news/rabbithutch-britain-growing-health-concerns-as-uk-sets-record-for-smallest-properties-in-europe-9544450.html




http://jaynelinney.wordpress.com/2014/06/18/why-the-government-doesnt-want-to-solve-the-housing-crisis/

Article by Real Fare UK on Housing Crisis:
http://realfare.wordpress.com/2014/06/17/why-the-government-doesnt-want-to-solve-the-housing-crisis/



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