The Truth is out there…

[LKSteve]

This is a good thread. People will simply not pay extortionate rates on properties which have declined 25%-35% in value. They'll have enough trouble paying the mortgage.
Rates are too high, agreed
Property prices are too high, agreed
The banks are in trouble, agreed
Government departments & councils need a VERY BIG haircut, agreed, they are bloated & inefficient beyond belief.

[Steve Netwriter]

Steve,

I call it like I see it!

You of all people, with your excellent charts, must surely appreciate my argument that the Median is a poorer indicator of change than the Average – and yet you post off-subject data and remain silent on this important subject. And it is important, think about it. The information put out by REINZ gets instant National attention. This is what your fellow New Zealanders listen to – this is what they believe.

OK, let me make my views clear:

1. The use of median prices is at least dubious. More often down right misleading.
2. The use of means is also questionable.
3. Of course VIs and the media publish misleading information.
4. Yes the general sheep are being constantly mislead by real estate agent representatives and the media. Either on purpose or because they are also deluded and vested.

but,

5. To accuse me of trying to sweep that under the carpet is incorrect.
As far as I am concerned they are given.

Now look at the two charts I posted which make an interesting point.
Has the REAL value of houses changed in the last decade ?

IMO the real accusation you should direct at the media and other commentators is far more scathing.

To claim that house prices have risen by large amounts and ignoring inflation.
To ignore monetary inflation.
To ignore the fact that currency is being constantly debased because more is being "printed".
To ignore the largest "tax" the system imposes on people. Inflation.

To ignore the biggest Ponzi scheme ever. The current worldwide fiat system.
The system that has a very good chance of collapsing.

IMO forget a little vested interest bias on house prices.
Look at the bigger picture.

Look to Athens, then Rome, then John Law and France.
Then ask which empires will collapse next.

[mattnz]

I thought I had better demonstrate my concept with the actual median data from REINZ (regardless of median vs average it demonstrates my point).

Auckland peak, Dec 2007 $460,000.00
Nov 2008 $425,000.00
Drop from peak = 7.6%

Wellington peak, Mar 2008 $410,000.00
Nov 2008 $369,000.00
Drop from peak = 10.0%

Canterbury/Westland peak, Feb 2008 $320,000.00
Nov 2008 $300,500.00
Drop from peak = 6.1%

National peak, Nov 2007 $352,000.00
Nov 2008 $337,500.00
Drop from peak = 4.1%

This is just as I expected. The average decreases (unweighted) from the 3 largest markets in NZ are 7.9% yet the national average is only 4.1% and the peak is earlier than any of the largest markets by between 1 and 4 months.

This demonstrates that the drop in the national figure needs to almost be doubled to represent what is actually happening in each individual centre, the only difference is timing as it works its way through the country.

[Austrokiwi]

Look to Athens, then Rome, then John Law and France.
Then ask which empires will collapse next.

I can't comment on Athens ( A hole in my knowledge of history) but on Rome. One feature of Romes success came from offensive defence, while it expanded the booty of war flooded into Rome keeping the economy growing.
Rome was a net consumer of goods not a net creator of the same. When the expansion ceased, slow decay set in. Nero famous for fiddling, is more rightly attributed with the first steps toward the end of Rome. With less conquest goods flooding into Rome his administration sufferred a lack of finances, so he debased ( devalued) the currency, it was a small step but one that was continued by the emporers that followed him. The point I think should be noted is that Rome lasted another 400 years after Nero.

Its a far easier task to predict which empire will end next.............the far harder task, and the real test of policial/social/economic understanding is to predict when it will end.

[exnzpat]

OK, let me make my views clear:

1. The use of median prices is at least dubious. More often down right misleading.
2. The use of means is also questionable.
3. Of course VIs and the media publish misleading information.
4. Yes the general sheep are being constantly mislead by real estate agent representatives and the media. Either on purpose or because they are also deluded and vested.

but,

5. To accuse me of trying to sweep that under the carpet is incorrect.
As far as I am concerned they are given.

Now look at the two charts I posted which make an interesting point.
Has the REAL value of houses changed in the last decade ?

IMO the real accusation you should direct at the media and other commentators is far more scathing.

To claim that house prices have risen by large amounts and ignoring inflation.
To ignore monetary inflation.
To ignore the fact that currency is being constantly debased because more is being "printed".
To ignore the largest "tax" the system imposes on people. Inflation.

To ignore the biggest Ponzi scheme ever. The current worldwide fiat system.
The system that has a very good chance of collapsing.

IMO forget a little vested interest bias on house prices.
Look at the bigger picture.

Look to Athens, then Rome, then John Law and France.
Then ask which empires will collapse next.

Steve, to do justice to your statement I’m going to have to dig through my attic and pull out my old university economic books – I really don’t want to have to go up there – so my reply may be a few weeks away.

But, off the top of my head -- the world economy is not going to collapse; it will be as it always has been – transference of wealth, one entity to another.

The real question is who are you -- the transferee or the transferor?

[LKSteve]

the world economy is not going to collapse

I don't think so either. It's going to be hard yakka for a while though.

[Badger]

Steve, to do justice to your statement I’m going to have to dig through my attic and pull out my old university economic books – I really don’t want to have to go up there – so my reply may be a few weeks away.

But, off the top of my head -- the world economy is not going to collapse; it will be as it always has been – transference of wealth, one entity to another.

The real question is who are you -- the transferee or the transferor?

Dont bother your books are Keynsian! Thats the current rubbish they teach at most mainstream universities...and where already experiencing where those books go...

[Steve Netwriter]

Dont bother your books are Keynsian! Thats the current rubbish they teach at most mainstream universities...and where already experiencing where those books go...

More or less what I was thinking

Lets put two basic things together:
1. The debt based currency system NEEDS growth so that more currency can be created to pay the interest on the previously created currency. (That sounds suspiciously like a Ponzi scheme).
2. The world is finite, and at some point, growth will have to cease.

Unless 1 or 2 are wrong, 1+2 will inevitably result in the collapse of the current debt based system.

One could argue that we are close to that point. Notice how the oil price is becoming more volatile. When it rises it wrecks the economy. Then demand destruction results in a price drop. This sounds like a growth limiter kicking in. That is incompatible with a debt based currency system.

Also, previous collapses have been empires which were relatively small. This time the wonderous banking system has chained many many countries into this latest 'empire'. If all empires are doomed to collapse, then this one will be bigger than any before.

IMO any book which claims collapse is impossible is basically flawed, and can be trashed

[Badger]

Lets put two basic things together:
1. The debt based currency system NEEDS growth so that more currency can be created to pay the interest on the previously created currency. (That sounds suspiciously like a Ponzi scheme).
2. The world is finite, and at some point, growth will have to cease.

Unless 1 or 2 are wrong, 1+2 will inevitably result in the collapse of the current debt based system.

One could argue that we are close to that point. Notice how the oil price is becoming more volatile. When it rises it wrecks the economy. Then demand destruction results in a price drop. This sounds like a growth limiter kicking in. That is incompatible with a debt based currency system.

Also, previous collapses have been empires which were relatively small. This time the wonderous banking system has chained many many countries into this latest 'empire'. If all empires are doomed to collapse, then this one will be bigger than any before.

IMO any book which claims collapse is impossible is basically flawed, and can be trashed

These 3 paragraph's are what you need to *grasp* people!

[Austrokiwi]

These 3 paragraph's are what you need to *grasp* people!

I am confused:

In another thread Steve Net Writer praises a book ( the future of money) which holds up the idea of community based fiat currency's and then in this thread slams some one who states he doesn't believe the worlds economy is going to collapse.



I do not believe the world economy is going to collapse. I do believe it is changing. I can see the US$ no longer being the worlds reserve currency and I can see lots of upheaval, but that does not equate to complete melt down.

[Badger]

I am confused:

In another thread Steve Net Writer praises a book ( the future of money) which holds up the idea of community based fiat currency's and then in this thread slams some one who states he doesn't believe the worlds economy is going to collapse.

I do not believe the world economy is going to collapse. I do believe it is changing. I can see the US$ no longer being the worlds reserve currency and I can see lots of upheaval, but that does not equate to complete melt down.

*Collapse* in this case is a matter of perceptions and tangents!

Life will go on regardless, but with what form and function??

[Austrokiwi]

*Collapse* in this case is a matter of perceptions and tangents!

Then Please enlighten us and state exactly what will collapse, and indicate a time frame for the collapse

[Bob Kane]

Lets put two basic things together:
1. The debt based currency system NEEDS growth so that more currency can be created to pay the interest on the previously created currency. (That sounds suspiciously like a Ponzi scheme).
2. The world is finite, and at some point, growth will have to cease.

Unless 1 or 2 are wrong, 1+2 will inevitably result in the collapse of the current debt based system.

I am confused as well.
Point 1 concerns the currency system and can expand forever - numbers are infinite.
Point 2 is the physical world which is finite.
What makes them linked together?
Why can't they operate independently?
An example:
I write a song and load it onto a website and charge people 10 cents every time they listen to it.
People can listen to it repeatedly and I receive a never ending supply of money.
What part of the physical world will limit or end my income?

[Badger]

I am confused as well.
Point 1 concerns the currency system and can expand forever - numbers are infinite.
Point 2 is the physical world which is finite.
What makes them linked together??

Growth economics

Why can't they operate independently?

Imaginary future growth is needed to service yesterdays debt

An example:
I write a song and load it onto a website and charge people 10 cents every time they listen to it.
People can listen to it repeatedly and I receive a never ending supply of money.
What part of the physical world will limit or end my income?

The free market or the individual consumer, getting sick of it?

[Badger]

Then Please enlighten us and state exactly what will collapse, and indicate a time frame for the collapse

Last time I checked current events about 5mins ago many things are collapsing right now.

Like I posted its all about perception