Sorry to be boring but....

[Wotta Wally]

Case of supply and demand.

If the rich-I've-got-two-homes start to feel the pinch, they will try and sell. Thing is tho', everyone else knows there is a recession so are going to tighten their belts and not purchase. So there is a greater supply of houses but little demand and so the house price will be reduced to encourage the sale. Which is why, when Thatcher was encouraging people to be home-owners, demand was greater than supply which is why we have this silly situation of stupid house prices - and although there have been dips in the situation, it has just been a slow-down on the ever-up spiral.

I was heavily involved in the early 90s during the mortgage crisis and it was sickening taking peoples homes away from them. You could buy properties for an absolute song as a result because no-one was buying. And I agree with you - it is the credit situation which has artificially ballooned the current economy. WHEN it hits - and I say, when not if because I'm certain it is going to hit - there are going to be a lot of people out there who are going to be in trouble. I suspect companies will pull in their belts and review their salary structure - possibly even their employees - so more people will be on the dole, unable to pay the credit cards and the mortgages.

Probably the best investment at the moment is oil.

Jeez - it is sickening and worrying. Just have to be sensible and continue to make the cost-cutting efforts we are all making.

Soz - I'll get off my soapbox now. Anyone else want toborrow it?


[Edited to add: don't worry, the rich WILL feel the pinch. Investments will be down and top jobs WILL be cut.]

[mrsflibble]

...Thatcher was encouraging people to be home-owners...

I personally can't complain at that, my current residence is an ex-council property bought originally by my landlord's parents on the right-to-buy scheme.

As for the rich feeling the pinch, i hope it is just the rich, not the rich-on-paper. James earns quite a high salary but gets about a quarter of it taken away on taxes and pension. Then you factor in his petrol costs, our rent, bills and we end up with £8600 left in a year out of which has to come our food and clothing. We are by no means bad-off, i know people in a far worse situation, but last year because of car problems, petrol and having to move we ended up needing to sell 2 weeks of jim's holliday back to great western just to get by. we dont believe in loans unless you can afford the repayments, and we dont have credit cards.

[Smooth Hound]

It sounds to me like youll be fine your struggling now and will carry on struggling as before no its the people that are in debt for more than the value of there house that will be hit first, due to the fact there house will decrease in value, its good that you dont believe in debt and cards etc, that will make things easier for you, some people have been just keeping on changing there cards and never repaying as its been so easy to do that up uuntil now, they will be in trouble too, because suddenly they are going to have to pay it all off, and if they dont then i believe the interest rates are very high, its really because of this debt that the problems have arisen, banks lending people who really cant afford to borrow so much, too much money, things like 5 times there annual income on mortgages,

[mrsflibble]

yet again the credit card thing is my parents! they have been so terrible with credit, loans cards etc and it put me off. dont get me wrong, they have their place like when j and i moved into our own place we got a loan for the sofas, and we paid for our honeymoon on credit card ( we had one then) but we could only afford to do that cos we were on 2 incomes. now we're on his only and whatever i can scrape doing portrait photographs (I've paid off my camera which we got on buy now, pay a year later- the £400 payment's not due till july and it's sitting in my savings gathering interest :) ).
We survive. we will continue to survive. I really feel for the very poor who may be hit by this;; those who have outstanding loans which they needed to get by because of whatever reason.

I do not, however, feel for my brothers in law - i know i should but it's their own fault. they are currently living in a house together along with their respective partners, and doing the house up to sell. they bit off more than they could chew against good advice from their parents, step dad (who tried this tactic in the early 90s and got hit last time it happened), and the rest of the family, just to try and make a quick buck. it's bitten them on the arse royally.

[WiseBird]

credit cards are far too tempting, encouraging us to spend money we may not have. I have only just recently got one purely to be covered when buying things over the internet, as a debit card does not give the same level of security.

I am sooo careful not to spend money I don't have though, paying off the balance in full.

Paul Daniels had a very good point on Martin Lewis's ( http://www.moneysavingexpert.com ) interesting programme on chanel 5 a couple of weeks ago...he wondered if people would be so keen to flash the plastic if they were called debt cards rather than credit cards....

[Thomzo]

Well I am rather proud to be amongst such sensible people. There will be a recession because the media are determined that it will happen. As has already been said, it's all about confidence. With the media jumping on every tiny scrap of bad news, they are destroying the confidence in the financial markets.

If you are sensible, don't overspend or rack up high credit card debts, then you should be OK. And it sounds like most people here are being sensible. If you are made redundant and are struggling to pay the mortgage, you can always think about taking in a lodger. You can charge a certain amount of rent tax free (here in the UK).

There are still a lot of jobs around and high employment in most parts of the country so I don't think we'll see the high levels of unemployement that we did in the 80's or the high levels of interest rates either.

Good luck everybody. I'm sure we'll all weather it out.

Zoe

[frozenthunderbolt]

wow im gunna be a real little black cloud of doom and say yes there will be a global recession in the next year and an inevitable DEpression before 2030.

Our capatalist economy is based on continious growth expansion and resource use. Our planet and its extractable resources are finite. go figure . .

The 5 largest oil exporting countries all are slowing production and have diminishing reserves, they all also have an increasing internal demand which means that we can reasonably estimate them to stop exporting by absolutly no later than 2030 and probably closer to 2015. NOTE: None of these countries are the USA UK Auz or NZ

I cannot reccomend strongly enough that people regularly visit www.theoildrum.com and keep abreast of such things.

Economies do not run without oil. transport, power and production stalls. This creates a depression.

coupple this with deminishing retrievable minerals such as copper, uranium and in particular Phosphate; vital for comercial (chemicaly orientated) agriculture then you have something of a grim picture.

sorry

[ina]

coupple this with deminishing retrievable minerals such as copper, uranium and in particular Phosphate; vital for comercial (chemicaly orientated) agriculture then you have something of a grim picture.

I don't think this is grim at all - it'll just mean we'll be forced to be sustainable!

[Martin]

There are times that I feel I'm living on "planet surreal"......
We have George Dubbya playing Lady Bountiful - chucking dollars at Americans willy-nilly in the vague hope of restarting the economy, and cutting interest rates to the bone to encourage the unwary to borrow even more money they can't repay..........
(didn't they recently invent the phrase "sub-prime"? - meaning "not a hope in hell of it being repaid")
If he succeeds, the juggernaut of capitalism will again increase speed, and use even more of the earth's precious resources at an even faster rate, hastening our ultimate demise...................
Our lunatic and depraved government has just lobbed £1,000 or thereabouts for every person in the country at Northern Rock in the vain hope of keeping the capitalist house of cards aloft.......... gets me thinking "hang on a mo, household of 2 adults, 2 kids, that's 4k - about a third to a half of the cost of providing solar pv power for LIFE to their home" - is that surreal priorities or is it not?
Back in the 80's the Germans developed the "passivhaus" - costs around 7% more to build than a conventional home - using well-tried insulation and other technologies, we CAN build homes that use diddly-squat in the way of power (they need no boiler or other heater) - how many are being built??????????????
I put a poll on another site frequented by a lot of people in the renewables industry asking the simple question "when do YOU think it's all going t*ts up - bigtime?" - the consensus is 5-10 years.............
My advice - invest in hawthorn hedges, razor wire and a rifle!

[Stonehead]

There are times that I feel I'm living on "planet surreal"......

...My advice - invest in hawthorn hedges, razor wire and a rifle!

Only times? I feel like I'm living there all the time.

As I keep telling the survivalists, rifles will be useless as all that modern ammunition requires scarce materials. Even black powder requires guano, charcoal and sulphur.

No, I plan to come over all medieval peasant with scythe, flail, pitchfork, axe and sling. What, I already have them?

I'm also working on a design for a suit of armour made of overlapping, laminated credit cards and am training Graham, our boar, to be my trusty steed.

Be afraid, be very afraid!

[red]

[quote="StoneheadI'm also working on a design for a suit of armour made of overlapping, laminated credit cards and am training Graham, our boar, to be my trusty steed.

Be afraid, be very afraid! [/quote]

the image conjured up then did make me chuckle

[old tree man]

i must admit sometimes i tend to bury my head in the sand when it comes to major world panics like this, i know its wrong but thats one of the reasons for not watching the news, its so depressing doom, gloom and troubles all the press are interested in is sensalialisum to sell thier rags, i sometimes wonder if i should get rid of the telly altogether we did without years ago.

Russ

[ina]

i must admit sometimes i tend to bury my head in the sand when it comes to major world panics like this, i know its wrong but thats one of the reasons for not watching the news, its so depressing doom, gloom and troubles all the press are interested in is sensalialisum to sell thier rags, i sometimes wonder if i should get rid of the telly altogether we did without years ago.

Russ

I think you should - think of all the money and energy you'd save, too... I don't have one, so I only listen to news on the radio. You get plenty of information that way, but without the (sometimes sensasionalist) pictures!

[hamster]

Go for it if you want. People will look at you a bit funny, but never mind!

I would if it was up to me, but bf would pine for the haunted fishtank in the corner.... I used to worry about missing the programmes I do want to watch, but now I could easily get it on my computer through BBC iplayer and 4od, and use it for DVDs too. I'd prob save a lot of money, but then if everyone did that, no-one would pay their licence fee and then there wouldn't be any funding for Radios 3 and 4, which would be sad....

[MikeM]

i must admit sometimes i tend to bury my head in the sand when it comes to major world panics like this, i know its wrong but thats one of the reasons for not watching the news, its so depressing doom, gloom and troubles all the press are interested in is sensalialisum to sell thier rags, i sometimes wonder if i should get rid of the telly altogether we did without years ago.

Russ

nothing wrong with that, if anything it's a good attitude to take. We as individuals can't change anything on a big scale, but if we just concern ourselves with our own little world then we'll be well prepared when the balloon does go up.