User 268734

Preview from Europe: Stocks Get Stimulated, Again

"....dangerous decline in prices can be seen all around from UK retail rents falling in 2008...."

Why is a downward correction in the commercial real estate bubble 'dangerous'? Amidst all this talk of collapsing aggregate demand, I'm searching my own experience of life in the UK for tangible evidence. Sure, my house is worth less - heavens, it's back down to 2005 levels and now only worth twice what it was six years ago. Rail fares to London from the provincial city in which I live increased last Friday by high single digit to low double digit percentages - depending upon time of travel. My weekly food bill is barely changed over the year. My utility bill is substantially higher. My local taxes are higher and set to rise further. No doubt I could go and buy a couple more flat-screen TVs at lower prices than last year, however: first, how long will that last with the GBP tanking against Asian currencies (in fact, against anything bar the Zimbabwe dollar and the Rouble)? second, is it just possible that the decline in demand for consumer electronics reflects a sated consumer and overinvestment in production facilities (ditto re cars)? Enough of the deflation talk - it's nothing more than a cover-story to justify fiscal and monetary profligacy in an attempt to reflate a broken economic model.