Wednesday, June 01, 2005

Living crash

The Financial Endgame Slowly Plays Out by Nigel Maund -
For the average person in the US, Canada, Britain, Japan, Australia and New Zealand, not to mention much of the European Community, the quality of life is steadily declining amidst the illusion of paper wealth represented by assets such as houses, bonds and stocks. Since 1982, the money supply has been progressively pumped up at an ever expanding rate, whilst real earnings have been in steady decline, under steady erosion through real inflation as opposed to the statistically incorrect CPI as corrupted by manipulative 'jiggery pokery' by successive governments.
The prime instrument in this global economic game has been one fundamental to the lives of everyone; i.e., the house you live in. Unless the householder is rich enough to afford to own two or more houses, which most are not, then the paper gain in the steadily, but rapidly rising, price of his home can only be realized if he sells his home and move into a lesser house in the same area, or, one of similar quality and size in a less attractive or sought after location. Most people do not like moving home for obvious reasons. Therefore, the only benefit one gains from ever rising house prices, and property prices in general, is if one can use some of the increased equity in ones home to finance other consumption needs, such as: education; cars; consumer durables; holidays; home improvements and non-essential luxuries such as speed boats and jet skis. As many writers have pointed out, a home is a source of finance amidst falling real earnings, a veritable private bank ATM to be tapped into as deemed necessary.