it also astounds me that in the current market, with all the information out there that the property bulls still dont understand how the economy works
people drive the economy, busines's make money providing services to people. busines who make money of other business's are making money of business's that service people.
its people spending that drive the economy, its this money being spent which goes to wages and makes jobs and makes the world go around.
Its because property this decade has inflated through the roof in leaps and bounds beyond realistic values that peoples spending has disapeared as their salarys go into the mortgage instead. this is why retail is dead now.
retail will remain dead while house prices are at this rediculas level, because people have no money left over to spend.
this kills business's and kills the economy.
think of money like blood, in a airplane if you pull hard G's all your blood runs to your feet, and there is not enough blood to flow around your brain, so it crash's and you pass out.
economy is just the same, because of the stupid heights house prices have gone, all the money has been sucked out the economy and tied up into housing, so there is not enough money flowing around the economy so it crashs.
the interest rate cut is to try and get more "blood" flowing around the system giving people some spending money to spend to pump into the economy.. it wont work coz they will throw this extra money on their mortgage now from fear
the only way the economy will move forward is for house prices to crash
