Buy Your Home Now: British Real Estate Hits All Time Low

16.11.2016 • The Economy

From Nick O’Connor – Capital & Conflict (Great Britain) –

Ah, more irony.

In the year we’ve seen the most vehemently anti-establishment political movements in recent times, what has the establishment nominated as its word of 2016? Post-truth!

I have to admit I find the term amusing. It’s almost as if politicians have never lied through their teeth to the electorate before, which of course isn’t true.

But it’s certainly true there were some big and misleading statements made about the EU referendum (and Donald Trump’s election). So when European Council president Donald Tusk said a vote to leave the EU would be “the end of Western political civilisation”, I’m pretty sure most people saw that statement for what it was. Likewise with the £350 million a week figure – and pretty much every economic forecast from either Leave or Remain. None of it was objectively true one way or another.

I don’t think we’re living in “post-truth” times. I think people have stopped thinking what they’re told to think. If you give people the freedom to think for themselves, sometimes they’ll come to a conclusion you don’t agree with. But that doesn’t make it objectively right or wrong, or objectively true or false.

House prices – the cheapest they’ll ever be in Britain?

Will rising inflation – and rising rates – mean higher mortgage rates in the UK?

The markets seem to be signalling that they will. Five-year sterling swap rates are climbing, which could mean mortgage rates will follow. “Mortgage rates therefore now have hit a floor and might soon edge up,” Samuel Tombs, chief UK economist at Pantheon Macroeconomics in London, told Bloomberg earlier in the week.

Conventional, mainstream analysis suggests that higher rates could lead to falling property prices. But if 2016 has taught us anything, it’s that we should always question what mainstream, received wisdom tells us.

Perhaps there are stronger forces at work in the property market. Yesterday publisher Dan Denning made a pretty shocking forecast about property, based on an idea you may never have even considered (but which could help you forecast rises and falls in property over and over again). It all comes back to an underlying cycle within the economic system, one that governs not just property prices… but even the stockmarket. Right now it’s indicating property prices in the UK may never be this low again.

If you’re interested in property, own your home or want to buy a new property in the next couple of years, you need to hear what Dan has to say now.

Cheap energy is a problem for Germany

Here’s a nice problem to have: so much clean, renewable energy that your grid system starts bursting at the seams – and annoying your neighbours.

That’s what’s happening in Germany at the moment. Northern Germany is producing more wind power than the traditional grid system can manage. When the wind really blows, there’s nowhere for all that surplus power to go – so it has to course through the network via what are called “loop flows” in Poland and the Czech Republic. It’s like running surplus water supplies through canals on your neighbours’ land. Neither Poland nor the Czech Republic are that happy about it (it costs them money).

This is a problem for the grid. But it’s a good problem. It shows what’s possible as the energy infrastructure scales and modernises to incorporate renewables as a much bigger part of the mix. And it underlines just how huge the opportunity is for anyone who can develop batteries capable of storing all this surplus power. That’s a topic I cover in detail in my new book, The Exponentialist. It’s a study of what I believe will be the four technologies that’ll change the world in the next decade. Solar is one. The other three are… actually, you’ll need to wait to find out the other three.

But you won’t need to wait long. It’s officially published tomorrow. Look out for my note on how to claim a free copy tomorrow morning!

Is Donald Trump a hard money man?

There’s been plenty of talk about how Donald Trump’s policies could be inflationary. But could he have a more direct effect on the monetary system of the world’s most important economy?

There are signs he could. The president can nominate new officials to the Federal Reserve’s Board of Governors (the Republican controlled House and Senate would have to rubber stamp the decision). There are two seats on the board currently open. Unless President Obama fills them before the end of his term, Trump will have his pick.

And then both Janet Yellen (the chair of the board) and Stanley Fischer (vice-chair) will leave their posts by 2018, right in the middle of Trump’s presidency. So he has a fairly unique opportunity to appoint officials with completely different ideas about how to manage the monetary system.

There’s yet to be any real indication of who that might be. But it’s a story worth watching. A vote against the political establishment can be seen as a vote against the monetary status quo too. Who knows what comes next?

As always, get in touch with your thoughts on today’s issue at nick@moneyweek.com.

Read more at www.capitalandconflict.com

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