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  • Property Prices

    QE / ZIRP - effect on property prices

    What are people's opinions on this?

    If a recession is announced and BoE / Fed / ECB cut rates to zero, then QE, what will be the outcome?

    Obviously property prices will rise in fiat terms, but how will the banks be affected?

    If we get very high inflation (I'm not saying hyperinflation!), will it cause other destabilising effects?

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    I think if anything we are more at risk of deflation than hyperinflation while consumer demand continues to fall.  However, should we find a Corbyn Government elected then we'll rapidly head into a full scale currency run as money flees the country and then you'll see a massive jump in inflation and unemployment, and that creates a real conundrum do you raise bank rates to protect the Pound and thus make inflation worse or accept the devaluation in currency and hold base rates which in itself is going to increase inflation due to the knock effects of devaluation??
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    I don't focus on things I can't control.

    I focus on the fundamentals of my business.

    Supply a product that is in high demand.

    Keep overheads to a minimum.

    Keep debt to an absolute minimum.

    Keep at least a year's contingency in cash for fixed overheads.

    Store surplus cash in places that hedge against inflation (property, commodities) and hedge against deflation (cash at bank).

    Therefore, I don't worry about this stuff.


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