Reports this week say the housing market is now back to peak 2008 levels. Of course it isn't really back to that level in real terms as the £ has taken one hell of a hit. The whole economy has effectively been run for the benefit of those homeowners/banks who over extended during the boom and the weak £ - driven down by low interest rates and quantitative easing - has been left to carry the burden.
Of course, outside of hols on the Costa', the poor saps who live in the UK don't see this. With the house price boom being the bubble literally to big to let burst what are the lessons we all have learnt? Pretty much all the wrong ones I'm afraid! We seem to be going back to our destructive debt addled ways, only this time even more recklessly with the false security that the government won't let it all go tits-up.
The economy is effectively held hostage by the an insane housing market and the resulting policy of ongoing low interest rates is the very prescription that to a large degree created the environment for the recent crash in the first place. Next time the bubble looks like bursting the government will be impotent to act - they've shot their bolt and not only not fixed the fault in the system but adopted an economic course that can only lead to a bigger financial meltdown in the future.
We really are screwed!
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment