Biff

<Moi! Mischievous!>

OK OK. I can see that it might be fun taking the p**s out of Labour Party Policy. My only comment was that people reading this site might be taken in by it: It just looked a little too real to me.

Thirty five years ago when wife and I were buying our first house it was normal for one partner, usually the male, to work full time, wife looked after children and perhaps worked part time.
Mortgages were calculated on the basis of the husbands income. In our case wife was capable of earning more than me but this was not relevant. Local authorities could give mortgages to those whom they considerd worthy but were unable to get a commercial mortgage. Getting a mortgage was very difficult for the low paid. We failed and had a private loan from friends.
Eventually women threw off their shackles and set off to work full time in properly paid employment .
Coincidentally the cost of housing went through the roof.
Could this have anything to do with the fact that there are now two incomes in a partnership?
Isn't the cost of an item related to the price people are capable of paying.
I blame the high cost of housing on the emancipation of women!

So have we just become slaves to a system that can only continue if we continue to take on more and more debt? In 1971, the US broke the link with gold because it was spending beyond its means on the war in Vietnam. We then had a decade of inflation and, like you say David, women had to go into the workforce to make ends meet.

In the 1980's, after a brief attempt to get a grip on things and control the money supply, people gave up saving and we had a massive boom and then a bust. So by the time of the next boom in the late 90's into the decade, everyone was working, we had no savings, so the only thing left to keep things going was debt, i.e. mortgage equity withdrawals.

Looks like this boom is coming to an end, but what is left to fuel the next? It gets harder each time around to get people to take on debt to buy assets that they know aren't worth what they are paying. Maybe we have reached the end of line and the only way out it to hyper-inflate the debt away? You can bet all the bankers who have coined it in on the way up will have all their cash traded for gold and silver before that happens. Hmmm... gold price hit a new record last week....

I still think houses are going to get cheaper over the next 2 to 3 years but maybe beyond that a rising wave of money printing will feed inflation, rent and wages higher and bring things back into balance that way? Could be struggling with an energy crisis at the same time. An eco-home in a forest in Scotland sounds quite appealing...