An alternative way to stimulate the market

indeed what you are saying is absurd. the united states was formed where free land was given to anyone laying claim to it. many irish emigrated some loosing their lives to get free land. once they ‘owned’ this land(creation of a land registry and title) this created an asset with which to borrow against. this created such an immense amount of capital that it lead to the greatest and richest country in the world where 5% of the worlds population consume 50% of the worlds petrol. free people and free markets came together to create ‘wealth’. adam smith who wrote the wealth of nations heavily influenced the founding fathers of the usa.
i do not support property prices increasing at a rate above inflation like they have done for 10 years. this is a boom and bust which is bad for the economy/enterprise. housing should never be seen as a productive enterprise as it in fact is like gold unproductive , however it should be a stable store of wealth that can create capital.

ps fractional reserve banking enables cash to be created. banks dont lend without collateral. property is one of the few collaterals banks lend against. they tried lending against shares in the late 1920s we know how that worked out…

Too many contradictions there to unravel, but you seem to agree that land is not capital (however, its productive use may lead to capital creation).

and then this:

so, are you crazy?!


the point was that the asset must have a stable value to borrow against so that capital can be created for productive business/enterprise

the point with the free land business was not that the land was free but that the creation of a title on that land enabled that title to be used at a bank as security for a loan for something productive like buying seeds for next seasons harvest. this created capital that grew and created more capital and wealth.
we also get land for ‘free’ even today. its called inheritance.

if you read wealth of nations by adam smith its that free markets and free people come together to create wealth.
by allowing people to own something this creates the capital required to create wealth. without people being allowed to own something of value all you have is a form of slavery . how successful was/is the soviet republic? the only thing they have is oil even today. take that away and russia would be a barren wasteland.

what about consigning people to 35-40 years of debt slavery to own something of little or no value?

what kind of society does that create?

“The small island economy we live in will only grow through export led production.”


we have oil / gas / zinc to export , lets get drilling and digging

I broadly agree with this idea. However, I don’t know how this supports the notion that house prices should not fall or that house prices should not be low.

  • A home is essentially a liability, it costs you maintenance and generates no income. Its primary value is the shelter it provides and this is intangible.
  • An investment property should provide an income after costs or is a bad investment.
  • A place of business is also a liability whether you own or rent it. Its value is as a shelter for your business assets and as a place to do business. What you do in it creates the wealth, not the the place.

My view, property is an illiquid liability generator which is necessary, in most cases, to run a business but it not a wealth generator except by chance.

  • darwi

  • edited to correct grammar

the reason is that if they fall or have an unknown value banks become hesitant to lend against an asset. why would any bank lend money if they didnt have security for a loan? if this is the case then borrowing for a business becomes IMPOSSIBLE meaning that the real economy suffers. we are already seeing this. go to your bank manager and tell him you want 100000 for a new business, the first thing he will ask you is do you have security?

Is that the basis on which business development loans are decided?
It seems kind of strange to me that a limited company would have to put up a private asset as collateral for a business loan.

In fairness, I don’t know how loans like this work but I assumed that it would be based on the accounts of the company and the business plan that the loan was requested for. Perhaps it would be secured against the company’s assets or, unsecured, based on expected future cashflows of the company. But on the house of the MD? Strange.

  • darwi

That is a moronic argument. Europe provided capital through loans to develop US industry, nothing to do with the fucking land. Do some research.

Edit, sorry am getting sick to death of people putting two oo’s in losing.