Bbubbles are social-psychological phenomena, so are naturally difficult to control.
A speculative bubble is a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increase." This attracts "a larger and larger class of investors, who, despite doubts about the real value of the investment, are drawn to it partly through envy of others' successes and partly through a gambler's excitement."
Just a shortage of affordable houses
That there is a chronic shortage of housing in this country has become a sacred shibboleth. Politicians make solemn pledges to build 200,000 more homes by some vague future date to offset this supposed shortage. But the market is still way off the volumes of previous decades. Is there really a shortage of property in this country, and is this the main factor in ever increasing prices? Merryn doesnt seem to think so.
Tristram Hunt ducks out of leadership race after discovering he's a Tory
Steve Keen debunks naive austerity economics of Lab, Lib and Con
If the government is to run a surplus to pay down national debt, it does so by reducing private sector savings. So a permanent surplus policy involves economic contraction or increasing private debt (which eventually can't be sustained). Simples, with a minor caveat about velocity of circulation. The only thing I'd take issue with is his claim that increasing public sector deficit is expansionary - it depends how the finance is raised, and in the UK it's generally through the bond market, and such that no new credit is created.
UK now in deflation - apart from average house prices
The price level has fallen, for the first time since ...? A blip into that territory in 2008 and before that the 1930s great depression. There is good deflation and bad deflation. The difference is not really explained, but here in the UK it is believed to be good deflation. Is good deflation that with a Union Jack on it, I wonder? To read the article, type the source title into google.
Thought house prices could only ever go up
The price of new homes in China fell for the eighth consecutive month in April, showing the property sector continues to be a major drag on the world's second-largest economy. The average price in China's 70 major cities fell 6.1% from a year ago - the same rate of decline as in March. A large inventory of unsold homes is weighing on the once red-hot market. The property sector accounts for about 20% of China's economy, according to economists.
No figures for renters and no mention of the growing liability that anyone wanting to move up faces.
"House price hikes have been a big factor behind this, with a 9% rise in average property values last year, according to the report, which found 39% of total household wealth is now held in bricks and mortar" Anyone whose next move is to a more expensive house has been negatively affected by rising house prices. My family has seen our hopes of ever 'trading up' from a flat to a house disintegrate as our paper gain on our flat is wiped out and then some by the bigger increase in price of anything nicer than it. And then renters... unless you have a fat wad of other assets, you're falling even further behind than someone on the bottom 99% of the mythical 'ladder'