Is UK house price spiral connected to debt based monetary system?
"There are a few factors at work here, supply and demand being the main one. The Office for National Statistics has some good information: http://visual.ons.gov.uk/uk-perspectives-housing-and-home-ownership-in-the-uk/ Supply has historically struggled to compete with demand in the UK and this situation has been exacerpated since the 1980s when Margaret Thatcher was Prime Minister.  She set up a variety of schemes to encourage people to own their own home, such as tax relief (MIRAS) and since then home ownership in the UK has increased dramatically. The then conservative government also set up the ""right to buy"" scheme (in 1980) that allowed council tenants to purchase their council houses at a discounted rate.  The effect of this was to increase the number of home owners whilst reducing the amount of housing available for councils to rent to new tenants.  Anecdotal evidence (I can't find a documented source to back this up) suggests that councils did not build sufficient new homes to replace those purchased by their ex-tenants. The population of the UK has also increased, by around 10 million since 1980 (around 20%) and this has pushed up demand for housing.  House building in the UK has not kept pace with these factors that has led to a shortage of supply that has pushed up prices. http://www.ons.gov.uk/ons/rel/pop-estimate/population-estimates-for-uk--england-and-wales--scotland-and-northern-ireland/2013/sty-population-changes.html There's another factor at play here as well.  If you go back to the 1970s around 53% of women would go out to work but in 2013 this figure increased to 67% as it became more common for households to have double incomes.  This extra supply of cash also pushed up house prices. http://www.ons.gov.uk/ons/dcp171776_328352.pdf Your question regards a debt based monetary system is not entirely clear, but there are limitations put onto how much money people can borrow that are potentially limiting how much house prices can rise by.  Today most lenders are more conservative in how much they will lend but this wasn't the case in the mid 2000s when house prices rose very quickly.   Lenders are more cautious today after the crash of the late 2000s, but things are begining to relax again and they are starting to lend more which could in turn lead to further house price rises in line with what was seen in the 2000s. Recessions have coincided with house prices falling back or at least being stable.  In the 1980s house prices trebled from 1980 to 1988 but then fell back a little as the recession hit, before starting to rise again in 1997.  This rise was sustained until 2008 during which time prices trebled again.  Based on this you could assume prices will treble again as we come out of the recession, as long as this is sustained for 8 years or so. However, as the potential for more households to become double income is reduced (high female employment already) and wages are unlikely to raise that quickly, this may not be realistic, unless the mortgage lenders become extremely lax, to the point of reckless! To answer your other question, about the affordability of housing, this will be based on the level of wages in the UK and how strict or lax the lenders are, also taking into effect the availability of housing for purchase.  If wages rise, house prices will rise, if lenders are willing to lend more money, house prices will rise and if demand continues to outrstip supply, prices will rise. None of the major UK political parties are likely to solve the problems of population growth and not enough houses being built so it is likely prices will rise but you could argue that they are not far off a peak based on current wages and lenders attitudes.  If the UK economy continues to recover from the recession, it is possible they will fuel another housing boom by lending ever increasing salary multiples as happened in the 2000s, unless there is government intervention, ie regulation of the lenders." "No. Rural Scotland has exactly the same monetary system, and not the same bubble. Monaco (the other example given) doesn't even have its own monetary system but uses the Euro. Look instead to the common factor: a lot of demand for limited real estate. Turning towards the personal finance part of it, we know from experience that housing bubbles may ""burst"" and housing prices may drop suddenly by ~30%, sometimes more. This is a financial risk if you must sell. Yet on the other hand, the fundamental force that keeps prices in London higher than average isn't going away. The long-term risk often is manageable. A 30% drop isn't so bad if you own a house for 30 years."
If you really want to break into the industry you need to position yourself and skils in a way that indicates you can make money.  Start reading books on behavioral trading, quantitative trading, hone in your programming languages and most importantly learn how ECNs match trades.    Learning the background of ECNs is critical, its learning the internal workings how a electronic trading platform and how they match trades, what order the trades are submitted and matched by priority, what level of quotes you can buy or sell on...I mean the list goes on.    During my undergrad at XX, I completed a graduate level independent study on ECNs.  Taught me (myself) tons of valuable information, right when high freq trading was becoming big money.  My professor was awesome and totally pushed me to write more and learn more.  A company I followed at the time was a new entrant, called BATS, (better alternative trading systems) based in KC, they have a subsidiary known as TRADEBOT, which is their high freq trading platform which trades in house.  (I cant actually comment how they are connected, bc that was not in the scope of my studies)  However, I do not agree with high freq trading firms, and its only a matter of time before they become regulated due to Flash Crashes, models gone bad, limit order issues, etc.  BUT, there is tons of money in it if you know what you are doing.    For example, BATS is an exchange, which means they know ALL the orders for the liquidity they provide for orders, they see the price depth and liquidity of anything that trades on their exchange.  TRADEBOT can look at this data, and see who wants to trade what, then they execute on their knowledge of the market and make profitable moves.    More or less, think of a dealer at a casino, and you are a player at a black jack table.  The exchange is providing the transparency of the deck and you are allowed to place bets off that knowledge.  See how its fishy?  There is still lots of money in it, and it wont be regulated till it blows up and someone losses a shit load of money.  So go for it if its something that drives you.  Cheers,  Sol. "I'd strongly advise against this though as you'll create a connection on each of your Credit Reports to the other individual. If either of you have major debt problems down the line, you'll have to ""disassociate"" yourselves with the credit agencies to break the link. Why not just have an envelope of cash that you use to go shopping with? No hassle and you can keep it safe somewhere in the house..." You are starting from false premises built on politically driven economic theories. The reality does not square with anything that you just wrote.   The Fed is not necessary. It does incredible harm to the average guy. Fiat money and fractional reserve banking guarantee monetary collapse. You cannot continue to add debt at the bottom and cheap money at the top. Asset prices inflate and the average guy's standard of living goes down the tubes.   The idea that economics is hard science is ridiculous. In a smallish closed or partially closed system, formulas and equations can determine probable outcomes, in the infinitely complex economy of the modern world, the very idea that you can predict anything beyond general directions is absurd. And the general directions are not understandable without considering the human motivations that drive each of the billions of sentient actors involved.   But cleave to Samuelson, at least it can make you feel superior to think that you understand the pointless complexity The issue here is that the transaction (your funds to her account) looks very similar to the rent payments which you plan to make in the future. Those rental payments (if deemed to be commercial) would normally be subject to tax. Consider the scenario where rather than an up front $5000, and $5000 over 2 years, you paid her $10000, and paid no rent. That might be an attempt to avoid paying tax. A commercial transaction can't be re-labeled as a gift just based on your election - the transaction needs to be considered as a whole. However, an interest free, unsecured loan connected with you paying rent at market rate would be (depending on local laws) simply foolish (to some extent). I don't think you are able to structure the transaction as a joint purchase (since the mortgage will prevent her from allocating a part of the property to you). Its also likely that you can live in her house and contribute an adequate amount to the household costs without creating a taxable income for her. For example in the UK, up to ~£4000 pa rental income generated from the property in which you reside does not need to be declared. You need to identify the scenarios where your particular arrangement could be imagined as resulting in a taxable or potentially taxable event - then make sure you are not avoiding those events just by choosing how you label the events. Also, interest rates and credit risk directly corelate to Greece's ability to service the debt.  Japan could be at 400% and Greece 50%, but if they can't make payments or have credit good enought to refi the debt, that's when they will default.   Meanwhile, the fact that they are risky drives up rates further and makes it even harder to make payments.  It's called the death spiral.   Japan has low rates, solid GDP and good credit = non-issue. Canadian here: the US is our biggest customer, so we were impacted economically. I expected that within a year or two of the US housing collapse, we would also be hit, but something else happened: when the US dropped interest rates like a stone, we were also forced to drop interest rates. This meant that suddenly, money was being handed out for very very cheap, so cheap it was almost free if you had a decent job and good credit. The housing market here paused for a brief moment, and then continued climbing. It never stopped until some new rules were implemented, aimed mostly at foreign buyers and investors, and put in place this year. It appears however that this current drop in prices may be a temporary dip. The average cost of a home in Toronto is still around $1m CAD, and our real estate is still among the most expensive in the world if you look at how much we pay compared to our incomes.  In some places, houses have basically tripled over the past decade.  My point here is that Canadian home owners were not impacted negatively by the 2008 crisis. In fact, once the free money started flowing and prices went up accordingly, Canadian home owners were enriched as a direct result of the 2008 US housing crisis. The situation is clearly unsustainable, and the market is irrational. It's easy to say that we are in a bubble but it is  impossible to tell when it will crash. In Canada, it's harder to walk away from mortgage debt; if you're underwater on your home, and the bank forecloses on you and sells the house for less than you owe, you still owe the bank the remainder of the money (in most provinces). Not anytime soon, I suspect, but not necessarily for financial reasons. I found this interesting, including the link to the five tests, but I think that this topic is only partially judged through financial eyes, there's a lot of political issues around this with national identity/immigration issues already in the spot light as well as political aspirations. If there will be a call in the near future to join the Euro, how would that reflect on the financial industry in the UK from a PR perspective? and on the political leadership and how it managed the financial crisis?  I believe that it is in the interest of all the people in the high positions to show the country getting back on track rather than making ground shaking moves. But what do I know....:-) "No you should not borrow money at 44.9%.  I would recommend not borrowing money except for a home with a healthy deposit (called down payment outside UK). in December 2016, i had financial crisis So that was like 12 days ago.  You make it sound like the crisis was a total random event, that you did nothing to cause it. Financial crises are rarely without fault.  Common causes are failure to understand risk, borrowing too much, insuring too little, improper maintenance, improper reserves, improper planning, etc...  Taking a good step or two back and really understanding the cause of your financial crisis and how it could be avoided in the future is very useful.  Talk to someone who is actually wealthy about how you could have behaved differently to avoid the ""crisis"". There are some small set of crises that are no fault of your own.  However in those cases the recipe to recovery is patience.  Attempting to recover in 12 days is a recipe for further disaster. Your willingness to consider borrowing at 44% suggests this crisis was self-inflicted.  It also indicates you need a whole lot more education in personal finance.  This is reinforced by your insatiable desire for a high credit score.  Credit score is no indication of wealth, and is meaningless until you desire to borrow money.  From what I read, you should not be borrowing money. When the time comes for you to buy a home with a mortgage, its fairly easy to have a high enough credit score to borrow at a good rate.  You get there by paying your bills on time and having a sufficient deposit.    Don't chase a high credit score at the expense of building real wealth."