everyone said it was a great British economic miracle during the 1980s, as credit became much more easily available, so house prices took off, so people needed more credit to buy the expensive houses, and house prices rose again ... don't be left behind ! Get on the housing ladder !
So factories were closing and we bought stuff from abroad ? Cool ! German and Japanese cars are better anyway. Comparative advantage ! They're better at manufacturing and we're better at ... er..
Before the Thatcher Miracle you had to have been saving for several years with a building society before they'd give you a mortgage - of 3.5 times one person's salary max.
But now you could have that house AND fill it with consumer durables AND pay that restaurant bill.
"Access takes the waiting out of wanting" - and the credit card meant you could now buy things even though you didn't quite have the cash on you.
NuLab just continued and intensified these trends, adding a few tweaks all of their own.
But the trees do not grow up to the sky. Indebtedness cannot continue ad infinitum. It may be that we've reached not only the point of inflexion, but the top of the curve. On the other hand, there are still plenty of people (Archer yesterday?) implying that we just need to restart the party.
The economy's done the equivalent of staying awake for 30-odd years with ever increasing doses of amphetamine. Great fun at the beginning, then its something you just need and is normal, but you know it's going to be awful when you finally stop.
to be followed by the great correction... japan's lost decadeS... deflation + debauching most currencies.
Answer? Invest east (not easy), gold/silver (10% + of wealth as insurance), global shares at reasonable prices (pharmaceuticals?), oil, armaments (I fear).
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