Knee Jerking And Another House Price Scare

Today we are faced yet again with financial experts telling us we need another interest cut to combat the slow down in house sales. I could understand the argument if it didn’t just seem like yesterday since the argument was to put it up to curb spending.

Apparently house building dropped by 35% last year, which is surprising as I though it would have taken some time to make decision, maybe the year before. The year before, the arguments were to put up interest rates, to slow down house price rises and curb spending. Strange this happened when the house builders had already committed to less houses knowing there was to be a slow down.

It might be that the financial experts out these should just ask the real businesses what is going on and rely less on the press who of course want to sell more newspapers and extent opinion to its highest form. If the annalists had known two years ago that the economy was going to slow down, especially as we had good warning about American house prices, there may not have been a need for any interest rises at all, we could have just let the international economy control the process.

So are we a nation of knee jerker’s, or is it a case of changing the pot t suit the honey, several times a year. Surprisingly we do know that answer, because it is bedded into our economical history. In fact some share buyers use Wave Theories to calculated the bears and bulls of the share market, all based on historical data and human reaction to all monetary events, some seem to be able to calculate things to a very accurate amount.

So what would the wave theory done for the UK economy had it been used? I can’t answer that of course, but you can’t help felling that it would be better that the repeated calls for increases or decreased based on gut feeling rather than accurate or historical data.

The home owners and house buyers are the ones who lose or benefit most from the Medias love of this subject. We may say we don’t believe what is printed in the media, but we still seem to make many decisions based on it. House prices and investments decisions are often based on media information and not through financial studies.

So if you own a home and are considering a mortgage, make a point of speaking to a professional who has seen it all before and keep those knees well and truly tied together until you have real facts and not screams of change.

Personally I don’t care if house building has dropped 35% last year as it creates more demand for the houses that are built. But I do care about scare mongering and the incessant pressure to do something different to what we are doing. Of course I do want lower interest rate, just like you do. But I can’t help thinking they never should have gone up in the first place, and the spending boom was not as great as was stated.