Land Supply chestnut rolled out again

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DSC_0094
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Buyers look for existing houses as land prices soar rolls out all the old chestnuts:

Economic forecaster BIS Shrapnel says the demand for newly built houses is dropping off as the cost of land soars.

It says the limited supply of new land has led to the growth in land prices outstripping the growth in house prices in recent years.

Anyone on a bike commuting to work each day will soon tell you there are multitudes of vacant blocks of land lying idle. Regardless of the 119.623 vacant homes on census night, there are easily as many vacant blocks of land held by speculators in Melbourne.

Yes that’s right, the privately controlled supply of land is what is forcing up the price of land. Urban sprawl forever is not the answer.

Rudd’s Commonwealth land supply is nothing more than a handout for land bankers – unless Rudd backs it up with a holding charge on land. See evidence of land bankers in action on a former commonwealth RAAF site in Melbourne’s poorest community, Braybrook.

No wonder people are paying more as a percentage of wages than ever before. But yet powerful interests are able to manipulate the media into doublespeak. This land banking trend is what has driven the US economy to such meltdown mayhem. We will be next.

Read more about the importance of releasing this privately monopolised supply of land in the I Want to Live Here report.

Renegade Economists Show 55

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Trauma
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Shock Doctrine of Bankers Bailout

Download the Renegade Economists Podcast now!

Show Notes – 24/9/2008

Karl & Andrew cover the US financial woes amidst the shock of proposed US electoral roll reforms in Michigan, where voters will be struck off if their house is foreclosed!

The property boom-bust cycle is explained with a prominent local example, also Earth Overshoot Day, Speed Renting & upcoming Economics for Activists course. All this and more can be seen in our show notes, which we promise will improve on the permalinks front:

R55

Right now, with every single penny you spend, the community already pays its ground rent, straight into the well-lined pockets of the select band who, quite simply, are charging you the entrance fee to life on planet earth.

Wars used to be fought for land, now they buy & sell it according to tax breaks their lobbyists garner for them.

Don’t ever invite the Fed governor, Ben Bernanke, to play Monopoly against you, he knows the rules better than anyone:

“The Bank never goes broke™. If the Bank runs out of money
it may issue as much more as may be needed by merely writing
on any ordinary paper.”

From the˜Rules of Monopoly’™, by Parker Brothers.
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Wall St Transparency

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Your a life saver
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It seems like American’s have finally cottoned onto this Administration. Michael West sums it up:

HENRY Paulson has got to be kidding. He wants American taxpayers to hand a cool $US700 billion ($A833 billion) to his pals on Wall Street in return for a gigantic bundle of their delinquent assets … without his pals taking a pay cut.

Could there be a finer reward for failure? Could there be a worse deal for taxpayers?

No stake in the upside, no ceiling on extortionate Wall Street salaries, no guarantee the system will be stabilised. Just the mother of all rip-offs: a deal to privatise Wall Street’s profits and socialise its losses.

The bailout and accompanying legislation will give Paulson’s former colleagues at Goldman Sachs a leg up by being able to borrow at cheaper rates than other investment banks. The whole process will prop up land prices for longer than need be.

Instead of socialising the losses, the government should switch the land titles of the 3 million odd subprimers over to the Community Land Trust model, diminishing the capacity for such boom-busts and helping the economy correct itself more rapidly with little cost to the community or taxpayer.

Read the full analysis here

Pumped Money Supply – No Wonder Oil Peaks

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With oil surging $15 overnight to record levels for a single day’s trading, one wonders if economic theory is understood by Paulson’s panickers. With US$247 billion pumped into the global banking system over the last week by the world’s central banks to assist liquidity in the short term money market, one wonders why the US Fed now jumps to the beat of Wall St rather than considering the wider ramifications for the rest of the economy?

All this new money has to find somewhere to live. Speculators see such pumping within the economic framework as inflationary. Commodities are typically a safe haven when inflationary expectations rise as consumers will always need that certain commodity – be it oil, barley or wheat. Listen to Phil Anderson on the Renegade Economists to hear this explained.

Thus commodity investors were very excited by Paulson’s panick. But what will happen in the long run?

The high money supply will push interest rates down, reducing stresses on new borrowings and perhaps encouraging new business investment. But there is a proviso.

That proviso is that investment will only occur if stability is maintained. However, with nearly 1 million US sub-prime borrowers about to switch over to higher rates under their Adjustable Rate Mortgages, we’ve only just entered the sub-prime meltdown.

But the lower interest rates will also hinder the necessary correction in the land market. This will drag the US economy through a long recession rather than a shorter sharper one if market forces were left to correct behaviour. Did Ben Bernanke learn anything from his time in Japan? (*Please note, land prices are not measured as part of inflation’s ‘basket of goods’ in either Australia or the US.)
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US Banking Intervention

Karl FitzgeraldCommentary3 Comments

Michael Hudson on AIG

Michael Hudson on AIG

Michael Hudson on the highly respected Democracy Now, telling the inside story on the bankers bailouts. Hudson was recently interviewed on the Renegade Economists, giving insights on the banking system like few others can. Skip to the 10 minute mark if time is your issue, that’s when host Amy Goodman introduces the Hudson segment.

However, it may be worth watching the first 10 minutes as the latest Republican move to reduce the voting roll is revealed. Democracy does not count if your home has been foreclosed, according to those influencing laws in Michigan.

Outrageous!

Then hear what Professor Hudson says on the prevalence of speculative banks. Finally some sense on this madness!