“Show me on the doll where the Lib Dem touched you”

I have written so many blogs recently, but I keep deleting them as they are just whining.

But then, I realized that this is sort of the point of this blog, so I’m going to post one anyway. So this is the culmination of about a hundred different thoughts and will be pretty winding. Reading it will probably be a bit like trying to find a friend’s party, where you don’t know the address and spend ages lost in a minicab, and when you get there the party has already reached the stage where a girl is sitting on the stairs crying because no one likes her shoes and you have sort of missed the point of the party in the first place.

But I shall crack on.

By they way, the title refers to another post about Nick Clegg, but I can’t think of another title for now. Worked for TE Lawrence.

I also partly haven’t posted because the data coming out of various statistical agencies and major agents, as well as housebuilders, is becoming so muddled it is very hard to work out exactly what is happening – this is made doubly hard by the fact that I do almost no statistical analysis at all anyway, and my thoughts are based entirely on heresay and conjecture – as well as by the fact that my own personal professional experience is so warped now, ie surveying in London, that making comments about the wider housing market is very difficult – because there is no wider housing market anymore, if there ever was one.

Let’s take inflation for example – CPI is 3% - WHAT? Can you name a single bill or food item or cost of anything at all that hasn’t risen by at least 5%? Recently, I can’t. Even the SPI (Spaniel Price Index) which is based entirely on a basket of kibble, cheese and badger shit is going through the roof. Partly down to the badger cull, possibly. Incidentally, the BoE used this index for a bit during one of Mervyn King’s ‘episodes’, but they cover this up.

I read an interesting paper by a City broker recently, which was very interesting and full of interesting things and does run to quite a few pages (link here: http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf ).

I don’t think I missed any major structural faults on the house I was surveying at the time (houses don’t need walls on every side, do they? They’re allowed windy bits?). It basically said: look, if you factor in the actual rate of inflation then we have probably been in permanent recession since about 2000. Which is quite alarming.

It also says lots of other things, such as we’re all doomed and our economy now resembles a slowly deflating balloon and debt will kill us etc etc but the inflation bit was my main point of interest as I sort of think lots of people intuitively agree.

Factor in other aspects of how the economy ran for so long, and we really are in the shit – most growth for as long as people could remember, before the crisis hit, had been debt fueled on the back of lending against house prices, and if you get a new credit card with a 5k limit, are you 5k richer? I think so, but it turns out that no, you’re not – out national house stock rose by about £2 trillion in a decade, did that make us £2 trillion richer? Apparently not.

And we can’t control inflation now – because government policy is geared totally towards asset/house price support. I am going to look like an idiot when Osborne presents the budget in about an hour and refutes every point I make here, but he is making policy for the majority, and the majority own houses, and low mortgage payments are the only thing between absolute, complete instant disaster and long term, slowly unfolding disaster.

So what will Osborne do in his budget? Will he make noises and tinker around the edges, or fundamentally solve the first time buyer problem?

At the risk of looking more like an idiot than I am anyway, the ‘plight’ of first time buyers, such as myself, will not be solved, for now at least (I like renting, anyway I own my own chicken coop mortgage-free). Because that would harm the majority. So why would politicians do anything about it? That would be crazier than I think even they are. People keep saying ‘let’s have a massive house building boom!’ – what, like Ireland did? Like Spain? ‘Cos that helped. We could build a million houses tomorrow, and who would finance their purchase, exactly? We’d have another million empty houses, and still a crippling housing problem. You’d have to reform the housing finance system, and that just won’t happen. It just won’t.

As much as I like the bat-shit crazy Greens and New Age economics and Will Hutton writing articles from his multi-million pound London townhouse on poor people, nothing will change. Because when the Greens actually get power, like where I live, their policy mutates into daft things like ‘let’s replace every RBS branch with an artisan loaf maker’.

If you make bread YOU ARE A BAKER and if you have a shop that makes bread IT IS A BAKER'S SHOP. Actually, hahahahaha ‘artisan loaf maker’…sounds like a euphemism (for having a CRAP Nick Clegg, do keep up).

Wages are too low. Even at purely construction cost most people who can’t buy now couldn’t afford to buy at just cost anyway, within the constraints of the current mortgage market.

And the economy is based on getting this right, as our whole fractional reserve fiat-currency-driven economic model is based on banks borrowing short (sometimes really short, or even not at all like Northern Rock) and lending long, which rests on a property-owning democracy, as this long-term lending largely boils down to mortgages. Which we have, just, for now but won’t have soon – and then we’re really buggered.

But that’s then – right now politicians make decisions for the next few years, and jeopardizing those next few years even more, just because our country might be destroyed in a decade, makes no sense from an electoral point of view.

I hope the shape-shifting alien lizard creatures that run the world know what they’re doing.