tag:blogger.com,1999:blog-2948538160252327076.post5148323220741405775..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: The mysterious credit crunchAlice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2948538160252327076.post-81465469292613744152008-10-15T20:37:00.000+01:002008-10-15T20:37:00.000+01:00As late as August 2009?As late as August 2009?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-32635402321269131272008-10-15T18:50:00.000+01:002008-10-15T18:50:00.000+01:00It is the fear of what is to come....It is the fear of what is to come....Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-51636671222970481772008-10-15T18:00:00.000+01:002008-10-15T18:00:00.000+01:00I looked at real house prices over this period in ...I looked at real house prices over this period in the US up to 2006; what was interesting was that the same basic four-peak pattern appears, but the peaks and troughs were progressively lower. That suggested to me that this time the trough would actually be negative, with serious real and noinal declines, which has happened.<BR/><BR/>This graph shows the same pattern of progressive lowering; I suspect that, notwithstanding the current attempts at reflation, this time the trough will go below the zero growth line.<BR/><BR/>B. in C.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-34023988387041307682008-10-15T17:14:00.000+01:002008-10-15T17:14:00.000+01:00If you smoothe out the line between the early 1990...If you smoothe out the line between the early 1990s and now, that maps perfectly on the recent house price bubbles/crashes in the UK, with peaks at 1973, 1978 (mini bubble), 1989 and 2007 (OK, US HPC started in 2006).<BR/><BR/>It's the same lesson differently told:<BR/><BR/>Easy credit -> property price rises -> credit bubble -> property price bubble (self enforcing) -> credit crunch -> recession/price falls ...<BR/><BR/>Which is an argument for Land Value Tax. Choke off the land price bubbles at birth and make sure that easy credit -> lending to productive economy.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.com