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Why 95% of Traders Fail

UK Housing Bull Market Opportunities In Britain's Multiculturalism Immigration Crisis

Housing-Market / UK Housing Jun 03, 2013 - 04:18 AM GMT

By: Nadeem_Walayat

Housing-Market

In the recent May 2013 local elections support for UKIP soared to more than 25%, over taking the Liberal Democrats as the third party of protest as the major parties haemorrhaged voters due to their respective failures to address a crisis that has been fermenting over a near decade that has its roots in Labours open door policy to immigration from all new eastern european accession states, especially as many in Britain now fear another re-run of what followed the likes of Poland joining the EU near a decade ago as Bulgaria and Romania joining will likely see as many as 400,000 migrants over the next 3-4 years which is set against official expectations of just 13,000 new arrivals during 2014 (Communities Department).


The current official estimates of immigration are just as bogus as those of the last Labour government's which expected in 2004 that only 50,000 new arrivals would arrive from the then new eastern europe member states, instead Britain witnessed its greatest influx of immigrants in many generations, with eventually more than twenty times the propaganda number arriving in a relatively short space of time, which converts into a number nearer to 200,000 arriving during 2014, and as many as 100,000 migrants per year for several years thereafter, which suggests that rather than official estimates of 25,000 over the next 3-4 years the UK will likely witness mass immigration from Bulgaria and Romanian of well over 15 times that number. Which will be in addition to the mass migrations already underway from the bankrupt euro-zone member such as Ireland, Spain, Portugal and Greece as a consequence of soaring youth unemployment rates (18-25 and under) that stand at between three and five times that of the UK).

The Benefits Plague

Whilst many mainstream politicians argue that those who will come to the UK will mostly be along the lines of the last mass migration from the likes of Poland i.e. young hard working individuals, however the problem is that most of the young hard working Bulgarians and Romanians have already migrated (estimated 200,000) to the UK during the past 5 years via a whole host of avenues such as work permits and low skilled quota schemes, all of which will be abandoned as of 1st of January 2014 in favour of a complete open door policy.

Instead it is highly probable that many of the future arrivals from Bulgaria and Romania will tend to be poor families who will seek to target Britians welfare system as the level of poverty in the newest members states are at European extremes that only the likes of the Roma communities have experienced in the former Czechoslovakia, in which case the calculations will be pretty easy for most migrants for why would a family subsisting in Romania on less than 1/10th the resources that will be available in the UK not migrate whole families to Britain who will have the same rights as any British citizen for access to the whole hose of services and benefits available from housing, hard cash, schools and the NHS. After all, if Britain's population could similarly attain an income that was near ten times the benefits cap of £26,000 in another european state (£260,000), then the UK would also likely witness a mass exodus of many benefits and low income families out of Britain.

Both Major Political Parties Support Immigration

Leaders and representatives of both major parties have been busy making statements promising to control immigration in the future, however these amount to nothing more than bare faced lies when one considers the real fundamental drivers for immigration because if the politicians were really serious about controlling immigration than it would already have been done!

Labour Supports unlimited immigration because the vast majority of immigrants will tend to vote Labour i.e. be politically left of centre, therefore Labour sees immigration ultimately in terms of hundreds of thousands of new Labour voters who will ensure further election victories. Labour's strategy has therefore been highly successful as in a little over 10 years it has changed many constituencies in favour of voting Labour to the point where it has become near impossible for the Conservatives to win elections with significant majorities such as the landslides achieved by Margaret Thatcher achieved during the 1980's.

Conservatives support immigration because it is highly profitable for their pay masters - big business, as the influx of migrant workers will tend to drive down wages for all workers thus deliver higher profits for business. Academic economists may rightly argue that by doing so businesses will ultimately erode their own profits as workers who earn less also spend less. However what academics fail to appreciate is that the state steps in to fill the gap by subsidising workers through tax credits and paying some 8 million people who are economically inactive all of which is funded by money conjured out of thin air i.e. government debt that is not backed by any economic activity that acts to inflate the economy, and thus corporate profits which are leveraged to inflation.

The Conservative led Coalition boasts that it has cut net migration by a third, but what they forget to mention is that only immigration from OUTSIDE of the EU has been cut i.e. many of whom would be highly skilled workers, who instead of being reliant on the state would have paid taxes. Additionally the Conservatives conveniently tend to forget that the Borders Agency has been an abysmal failure that routinely allows in many tens of thousands of illegal migrants every year.

Therefore one should realise that high net immigration is in the interests of both major political parties both in terms of votes and for those that bankroll the parties, which means neither Labour or Conservatives will actually do anything significant in respect of controlling immigration, so everything you are hearing in the mainstream media from the politicians such as Cameron promising a referendum in 2017, some 2 years AFTER the next election is purely smoke and mirrors BS to mislead the population into thinking that something will eventually be done about Britain's immigration crisis.

Yes each party may announce plenty of policies and massage figures in the run upto the next General election, but they will break ALL of their immigration promises just as they have done before because it is not in either main parties interests to control immigration.

Impact of UKIP on the Next General Election

The remarkable showing of the UKIP of 25% in the local election is not going to be replicated at the next general election. Instead history suggests in terms of what happens to mid-term protest votes, that it is highly unlikely that UKIP will be even able to attract half the vote that they are able to today, i.e. a more probable outcome is 12% of the vote which at best will only win UKIP a handful of seats, not even enough to make any difference in an hung parliament.

Instead where the UKIP vote will influence the election is in the fact that they will take twice as many votes away from the Tories then from Labour and therefore as things stand virtually ensure that the Labour party will win the next general by a sizeable majority.

I am sure that the leadership of the UKIP fully understand this and therefore over the next 2 years we will likely see tactical voting agreements emerge between UKIP and the Conservatives in favour of 'promises' of UKIP friendly policies.

In the meantime Conservative MP's are falling over one another to become anti-european as they run scared of losing their seats to Labour at the next election by virtue of lost votes to UKIP.

Nigel Lawson Waits for Thatcher to Die Before Admitting He's Wrong on Europe

Nigel Lawson who was an ardent pro-european tory both during Thatchers regime and for several decades afterwards, therefore his latest announcement that he would vote for Britain to leave the European Union in an referendum has come as bit of a bolt out of the blue, akin to Margaret Thatcher revealing that she was always a closet socialist.

Nigel Lawson as Chancellor of the Exchequer continuously battled against his Prime Minister during the Thatcher years as he pushed towards greater integration with Europe. In fact Lawson along with the then Foreign Secretary pushed for Britain to join the Exchange Rate Mechanism ahead of a single currency. And it was Lawson's and Howe's resignations that ultimately triggered the Coup against Thatcher.

Now the same Nigel Lawson who has been wrong on the European single currency for several decades has the gall to stand up and say that Britain should leave the europe union, lacking any credibility, something that the Gold fish memory mainstream media fails to recognise.

"I strongly suspect that there would be a positive economic advantage to the UK in leaving the single market, quite apart from the more important economic gains I have already listed. Before we joined the European Common Market, as the EU was then known, far too much of British business and industry felt secure in the warm embrace of what was still known as Imperial Preference and was reluctant to look farther afield. It took entry into the Common Market to bring about a recognition of the opportunities on our doorstep."

The problem is that leaving an economic union is always going to be far more painful than joining a union as the Euro-zone PIIGS nation are discovering today, that whatever the pain they are enduring, what would follow an exit out of the Euro-zone and EU would be a far worse hyperinflationary collapse of their economies.

Yes, Britain could in a referendum vote to leave the European Union, but the people of Britain should prepare themselves for very high inflation and unemployment rising to at well over 3 million for several years the conclusion of which would be for a reduction in real GDP of about 9% or twice that of the Great Recession of 2008-2009.

In the immediate term the only real benefit of leaving the european union would be that Britain would no longer have to pay its annual membership fee of about £9 billion a year which is about 1.5% of government spending, another saving would be on being forced to contribute towards bailing out bankrupt euro-zone nations.

In the longer term, British businesses freeing themselves to some degree from ever expanding european red tape, an example of which is the annoying cookies nonsense where virtually every UK website has to repeatedly flash a message that cookies are being stored on user computers, should then become more profitable as they are able to channel more resources towards doing business rather than trying to comply with ever expanding european union bureaucracy.

In my opinion it is far too difficult to determine if Britain would be better of in the long-run from exiting from the European Union, however in the short-term i.e. the next 5 years it is highly probable that Britain would be significantly worse off.

Extremist Ideology of Multiculturalism is Why 90% of Immigrants Fail to Integrate

Many of the mainstream politicians actively promote the policy of multiculturalism as the primary way for immigrants to integrate / assimilate themselves with diverse cultures into British society, whereas the facts spanning several decades suggest the complete opposite takes place as the policy of multiculturalism (all cultures being equal) results in immigrants tending to congregate in ghettos that over time displace the indigenous populations, which are further reinforced by subsequent generations most of whom remain within their expanding boundaries of ghetto's which we see in ALL immigrant population groups, which is reinforced by state schools teaching of multiculturalism and by religious schools. The only change that happens over the time is that ghettos can become wealthy i.e. the Jewish immigrants of the 1930's to 1940's now live in rich ghettos such as Gants Hill, Golder's Green, Hampstead and Hendon, similar changes occurred with Hindu and Sikh migrations of the 1950's to 1970's and then for Pakistani's of the 1960's to 1980's and likely for a whole host of more recent influx of migrants from Africa, East Asia (China) and off course Eastern Europe.

The main reason for the lack of integration is religion which is used to justify separation between population groups, we see this with ALL immigrant population groups, Jews, Non CoE Christian's, Hindu's, Muslims, Sikhs and most recently Chinese. In which respect over time the reasons for separation become further exaggerated that is illustrated for instance by the Muslim community where many of the children of immigrants tend to become far more religious than their parents as illustrated by the wearing of the burka (full veil), something that their parents would never have worn and nor do their counterparts in most of the originating countries such as Pakistan, India and North Africa.

Furthermore the trend of separation also increasing risks of contempt for the country that has given them a home due to exaggerated religious doctrines that justify breaking the laws of the land because they are deemed to take second place to religious doctrine, again we see this IN ALL religions, Jews, Hindus, Sikhs, Confucianism as well as Islam.

As an example most muslims in line with the general population tend to see themselves as law abiding and would never entertain crimes such as the recent acts of terror, but many of the same people are more than happy to actively defraud the state in terms of perceiving themselves to have been given the green light by their respective religion such as in fraudulently claiming benefits whilst working in the black economy.

Such justification for fraud against the state is illustrated by the pick and mix attitude towards religious sermons such as finding justification in the utterances of self professed preachers / leaders as illustrated recently by the Daily Telegraph -

Daily Telegraph - Muslim preacher urges followers to claim 'Jihad Seeker's Allowance'
A Muslim preacher is secretly filmed urging followers to take benefits from the state to fund a holy war.

Anjem Choudary was secretly filmed mocking non-Muslims for working in 9-5 jobs their whole lives, and told followers that some revered Islamic figures had only ever worked one or two days a year.

“The rest of the year they were busy with jihad [holy war] and things like that,” he said. “People will say, ‘Ah, but you are not working’.

“But the normal situation is for you to take money from the kuffar [non-believers].

“So we take Jihad Seeker’s Allowance. You need to get support.”

He went on to tell a 30-strong crowd: “We are going to take England — the Muslims are coming.”

Ridiculing the daily lives of UK workers, Choudary said: “You find people are busy working the whole of their life. They wake up at 7 o’clock. They go to work at 9 o’clock.

“They work for eight, nine hours a day. They come home at 7 o’clock, watch EastEnders, sleep, and they do that for 40 years of their life. That is called slavery.”

Choudary, a father-of-four, claims more than £25,000 a year in benefits, £8,000 more than the take-home pay of some soldiers fighting the Taliban in Afghanistan, according to the Sun, which covertly filmed the preacher at three meetings.

Such subversion of religious scripture in the pursuit of self interest results in outright criminal fraud against the state which is prevalent amongst ALL of Britain's ghettoed immigrant communities that amounts to undermining of the state from within which over time is contributing towards the social and economic decay of Britain. Religion is used by Jews, Orthodox Christians, Hindu's, Sikhs, and Muslims to justify what amount to crimes against the state that range from claiming benefits that they are not entitled to far worse acts of subversion.

The bottom line is that multiculturalism DOES NOT WORK, it PERMANENTLY fragments society into ever expanding Ghettos where over time the populations have LESS in common with one another, not more! The only answer is to scrap the mainstream policies that support multiculturalism such as the state funding for religious schools of ALL faiths. For the brainwashing for separation of the population starts in faith schools. Next the state must seek to exert secularism by banning the use of ALL religious symbols in public places such as schools, hospitals, and in all government services and seek to extract multiculturalism from state school education in favour of a policy of Britishness.

If Britain does not get a grip on the current situation and put multiculturalism into reverse gear then ultimately the British state will see itself fragment during future economic crisis as populations that have very little in common with on another will choose to go their separate ways, which as Northern Ireland illustrates would result in catastrophic consequences.

Religion breeds separation, where isolated separated people tend to over time see those of other religions that they have little interaction with as inferior to themselves, and it is this that which is at the root of the current mainstream press reporting.

The policy of multiculturalism is as consequences of politicians seeking to create pools of vested interest voters. Multiculturalism are the policies that reinforce cultural differences amongst the population under the premise that all cultures are equal when the truth is the exact opposite as illustrated by the fact that the only reason countries such as China are prospering is because they are busy WESTERNISNG. So British politicians instead of reinforcing the strengths of British culture seek to exaggerate cultural differences between peoples in pursuit of creating and maintaining pools of vested interest voters.

British Government Bribing Islamic Extremists Not to Blow Themselves Up

The recent events out of Woolwich reinforce my view that multiculturalism is an extremist policy that promotes inter communal conflict rather than integration and is as a consequence of successive government objectives for the fragmenting of society into creating pools of vested interest voters.

Whatever the Government of the day, there has always ever only been one solution for EVERY problem that confronts it and that is one of printing money to bribe the recipients so as to create vested interests. With regards to Islamic extremism news topic of the day, it amounts to effectively bribing extremists to not blow themselves up, i.e. for extremists to go onto the Home Office, Communities Department and even the MI5's payroll, the estimated amount that Britain spends per year to bribe extremists to not blow themselves totals approx £700million, which given the ongoing news story out of Woolwich is likely to increase further.

Mainstream Press Focus on the Extremists

The mainstream press in near totality has this past week been focusing on either current or former extremists that rarely represent a fraction of 1% of the population's from within which they emerge (as is nearly always the case). The bribed former extremists have been busy these past weeks earning their bribes on the news channels as they are presented to explain what is happening and why and what needs to be done, whilst conveniently not mentioning that they are on the payroll of government funded agencies. Furthermore the solutions put forward invariably involve more tax payer funding towards anti-extremism projects as the various groups seek to personally capitalise on the Woolwich murder.

This tends to send out the message to the wider population that there are generally only two types of muslim, current or former extremists, whereas the truth is that the number of extremists is a fraction of 1%, though both the media AND muslim agencies purporting to represent muslims will tend to exaggerate the number, where the media does it for readership and advertising and the muslim organisations for an increase government funding and other financial support.

This further illustrates the government policy of bribing everyone and everything with printed money be it called QE or Government debt that will never be repaid but is rolled over in perpetuity. This is why Scotland is unlikely to go independant because the Government of the day effectively bribes the Scottish electorate to stay in within Union to the tune of an extra £1600 per capita of state spending over England, and the same is true for Northern ireland and Wales. - This IS what drives the Inflation mega-trend and why there will never be Deflation because ALL governments default setting is to PRINT to BUY Votes, be they terrorists, nationalists, socialists, or even capitalists.

We are ALL being bribed ALL of the time to become vested interests.

So the word has long since gone out amongst deprived communities that there is funding to be claimed and profits to be made as a gullible government seeks to throw hundreds of millions a year in their direction. Thus Islamic radicalism in Britain can be a career choice for many young people because just like their benefits claming for life children producing white brethren, they too can skip the hard work route and land themselves onto the governments money for nothing payroll just as the Government has done in places such as Northern Ireland.

The more the observed problem of extremism in any particular community then the more tax payer money will be flooded into such areas to fund anti-extremism projects and related social projects for which many Imam's and bogus scholars will step forward to profit from. If the mainstream press wants to earn any credibility then they need to state that virtually EVERY former radicalised person they have put on the likes of Newsnight this past week is in some manner on the governments payroll.

Instead the real solution is to end multiculturalism (all cultures are equal) and instead promote INTEGRATION. So politicians instead of expand the cultural differences between peoples in pursuit of creating and maintaining pools of vested interest voters should reinforce the strengths of British culture.

The Worlds Most and Least Western Multicultural Countries

An in depth study by Queens University analysed the the extent of multicultural shift over the past three decades, by examining the adoption of the following eight policies:

  1. constitutional, legislative or parliamentary affirmation of multiculturalism;
  2. the adoption of multiculturalism in school curriculum;
  3. the inclusion of ethnic representation/sensitivity in the mandate of public media or media licensing;
  4. exemptions from dress-codes, Sunday-closing legislation etc;
  5. allowing dual citizenship;
  6. the funding of ethnic group organizations to support cultural activities;
  7. the funding of bilingual education or mother-tongue instruction;
  8. affirmative action for disadvantaged immigrant groups.

The following table shows the total score's for each country, and the global trend towards multiculturalism by most western nations. The table shows no change in the policies of Multiculturalism in the United States which as the world's largest immigrant melting pot where the over-riding policy remains firmly grounded in one of Secular Americanism.

  TOTAL SCORE
1980 2000 2010
Canada 5 7.5 7.5
Sweden 3 5 7
Finland 0 1.5 6
New Zealand 2.5 5 5.5
United Kingdom 2.5 5.5 5.5
Norway 0 0 3.5
Portugal 1 2 3.5
Spain 0 1 3.5
Ireland  1 1.5 3
United States 3 3 3
Germany 0 2 2.5
Greece 0.5 0.5 2.5
France 1 2 2
Netherlands 2.5 5.5 2
Italy 0 1.5 1
Switzerland 0 1 1
Denmark 0 0.5 0
Japan 0 0 0

The full study can be accessed here - http://www.queensu.ca/mcp/immigrant.html

The mixing of cultural diversity is good for Britain but multiculturalism is bad in that it ultimately sows the seeds for future conflict. UKIP gives Britain an opportunity to correct the path it is on before the multicultural immigration crisis further intensifies. The bottom line is the Council of Muslims, Jews, Hindu's, Sikhs, Poles, Arabs, Afro-Caribbean's, Somalis, Chinese who purport to represent their respective population groups and thus encourage division because it is in their self interest to do so. Instead ALL of the people of Britain already have political representatives in Parliament and local councils and therefore NO state funds should be expended on supporting the whole host of divisive multicultural charities and institutions.

The bottom line is that regardless of any war crimes committed by British soldiers abroad, instead it is up to every British citizen regardless of religion / culture or origins to seek out to preserve Britain as an Oasis of law, order, justice and civilisation in a world that will always be wracked by chaos and violence, after all this is the precise reason why most people have migrated to Britain in the first place.

Despite the fact that only a person who is clearly insane could do what was done in Woolwich, still in its aftermath the rise of EDL / BNP shows that civilisation is fragile which needs to be actively protected against extremists by the vast majority of citizens, and it should be the role of the state to promote British culture and identity rather than the fostering of a fragmented multi-culture that sows the continuing seeds of resentment and ultimately future inter-communal conflicts.

Euro-zone Unemployment Crisis Driving Workers to Migrate to UK

Euro-zone unemployment rates hit new economic depression extremes, with Greece leading the PIIGS nations that collectively have a youth unemployment rate of more than 50% that continues to encourage mass migration out of the PIIGS to either Germany, or the UK as the below table illustrates there exists a huge gap between the single markets jobs markets.

Country 18-25 All
UK
20.2%
7.7%
Germany
7.6%
6.9%
Greece
62.5%
27%
Spain
56.4%
26.8%
Portugal
43%
17.8%
Italy
40.5%
19%
Ireland
26.6%
13.5%

Many of the smaller PIIGS countries unemployment rates would be even higher were it not for the fact that hundreds of thousands of unemployed have been migrating to other european union countries such as Germany and the UK over the past 4-5 years, with Ireland alone witnessing a staggering 308,000 workers leave, without which Irelands unemployment rate would be DOUBLE at well over 25%!

The effect of the soaring unemployment rates is to blame immigrants for the jobs crisis as we see in the highest unemployment nations such a Greece and Spain that are seeing increasing levels of violence against ethnic minority populations.

It is also ironic that countries with the greatest increase in persecution of immigrant populations, namely Greece are witnessing the highest level of emigration of especially their young people to Germany and the UK, where I am sure the newly arrived migrants expect to be treated in a far more civilised and equal manner than that which they subject their own immigrant populations to, the same holds true for virtually all eastern european states that whilst migrating to the west in huge numbers, domestically drift towards far right extremism.

The net effect is that Britain's Labour market is far stronger than that which the official figures suggest as the UK soaks up at least a net 100,000 euro-zone migrant workers each year which one the hand should support tax revenues but on the other hand results in persistently high unemployment due to a highly competitive UK jobs market that also acts to cap wage rises, which is good for the british economy because it increases competitiveness.

The bottom line behind the euro-zones unemployment crisis is apparent in the data itself, in that the PIIGS just cannot compete against Germany which has effectively EXPORTED its unemployment abroad. Therefore the only solution remains as I have iterated for several years now which is for either Germany to leave the eurozone or the PIIGS to leave and inflate their way out of their current economic depression death spiral.

In terms of financial market opportunities, they are clearly to be found by investing in German corporations and real estate for the alternative to breakup of the euro-zone is for Germany to turn itself from a large exporter to a net importer, i.e. for Germans to go on a record breaking spending spree, creating demand for euro-zone wide goods and services, though given the inflationary consequences I don't see there being political will in Germany to go down this path unless forced to right at the brink of a euro-zone breakup.

UK Housing Market - Limited Supply and Ever Increasing Demand

The influx of upto 500,000 migrants over the next 3-4 years will be housed in large part by the state either in private landlords or in social housing. Therefore this will continue to put immense pressure on social housing which will effectively put the final nail in the coffin of council and housing association waiting lists where it will be virtually impossible for those in existing social housing to move to another social housing in major urban areas, the only option available will be to move out of social housing into private rented accommodation as the focus will be further intensified towards only housing homeless British and migrant families.

However as I earlier noted in the article (13 Mar 2013 - SMI Labour Benefit's Culture Catastrophe - Come to Britain and We Will Pay Your Mortgage!) that the benefits system does allow claimants to engineer the purchase if properties where the interest on upto £200,000 of a mortgage is paid for by the tax payers in perpetuity. This currently results in the state paying for over 250,000 mortgages, where approx 50% of claimants are pensioners, despite the fact it was meant to be a temporary support for workers losing their jobs.

The impact on the housing market will be two fold, firstly it will encourage the indigenous population on Benefits into temporary employment as that will be the only route for many to move to a better located property and it will lead to further demand for private rented properties, both of these will have the effect of creating demand at the bottom end of the housing market that will ripple out across the housing market due to increase in housing market transactions which is the real life-blood of the housing market.

This article illustrates just one aspect of the many factors that are exerting upward pressures on UK house prices that I have been flagging since the start of the 2012, as the embryonic bull market of 2012 increasingly morphs into a full fledged bull market of 2013 and beyond, which off course is already well underway in London courtesy of the top down ripple effect of the annual influx of billions of dodgy funds not just from Russia but from across the whole globe which sees London's properties as one of the ultimate safe havens that has already had the effect of wiping out the preceding 25% London house price crash and which I expect to be replicated near nationwide over coming years.

HOUSING MARKET OPPPRTUNTIES

Ghetto's and House Prices

Whilst the immediate reaction to an new influx of migrants into existing indigenous area's will be to push down house prices, as the existing population tends sell up and move out. However over time as the Ghettos become more established then there will be a tendency for the epicentres of most Ghettos to see an above average increase in house prices as the 150,000+ annual net immigration results in a continuing extra demand for housing in these areas whilst at the same time there will be a tendency for the outskirts of the ghetto's to lose house price value in a ripple out effect as the indigenous population seeks to relocate and move out of the changing ethnic environment and thus increasing supply of properties on the outskirts of ghettos. As is always the case many additional factors need to be taken into account such as the the unemployment rate, crime rate, risk of flooding, quality of schools etc, especially as migrants will tend to push down school performance tables due to the extra demands such as poor language skills and cultural differences.

The investment opportunity here would be to accumulate properties on the periphery of ghettos with a view to rental income as it is expected an expanding Ghetto will push up house prices in the future.

Inner City Mansions Up for Grabs

Apart from traditional buy to lets in expanding Ghettos, there is also an ongoing opportunity to literally pick up mansion size properties right smack in the middle of many urban areas of most of Britain's major cities.

Without knowing it you will likely pass by many of these boarded up large properties on a daily basis without ever giving them a second thought as to the opportunities they represent. Furthermore the supply is not diminishing instead another 20 such large properties join their ranks every week! What can I be referring to ?

Pubs!

Literally thousands of pubs have closed over the past 10 years as a consequence of the super markets taking much of their traditional business away whilst local demographic changes courtesy of the immigration crisis virtually wiping out most of their remaining customer base as traditional British pubs do not tend to be frequented by immigrant populations, this has resulted in a huge opportunity for property developers that I have personally witnessed, where those with time on their hands can make as much as X4 the cost of purchase and development by turning boarded up pubs bought at auction into flats and commercial premises or if they so desire a large residency for their own use.

In the local auctions that I track at least 2 or 3 pubs crop up each time, many require much work in terms of planning and building works and thus can be picked up for far less than much smaller residential properties within the same area, and thus huge rewards are possible for those with the ability to capitalise upon them.

Opportunities in Closed Down High Street Shops

Whilst thousands of shops are closing down across Britains high streets each year due to competition from the internet, shopping malls and ridiculous local council policies in terms of high parking charges. However this presents an ongoing opportunity to pick up retail properties in a similar manner to pubs on the cheap on the outskirts of the expanding Ghettos as immigrant populations will tend to seek out stocks of goods and services that are not provided for by the super markets or chain shops but rather available from local community shops.

How to Profit from the Bankrupt Banks

Looking wider a field there is another UK housing market opportunity trend in progress courtesy of the financial crisis and that is in buying closed down bank branches. Whilst disappearing bank branches is a near decade old trend, however once upon a time the tendency was for bank branches to be converted into pubs or wine bars that happens far less frewuqnrly today then several years ago, therefore increased supply of bank branches coupled with decreasing demand from competing sectors such as the pubs, gives prospective buyers another opportunity to pick up large properties in prime locations at deep discounts for development.

Pick Up Light Industrial Units

The ongoing recession continues to push many businesses to the brink that is resulting in a steady supply of freehold light industrial units comprising of offices and workshop areas becoming on the market and usuaully again at auction.

Greenbelt Land

Competitively priced greenbelt land that is adjacent to existing housing developments, where should planning permission be granted at a future date the value of the land could literally increase 100fold. However it may take a decade or more, and one needs to pay special attention to any clauses such as that if any profit is made on the land as a consequence of the granting of planning permission then that would need to be shared with the previous land owner, in my experience a 50/50 split tends to be the norm that diminishes over time, i.e. after 20 years any planning permission development profit would no longer need to be shared with the previous land owner.

Current State of the UK Housing Bull Market

This article is part of an ongoing series mapping out key drivers for the UK housing bull market now underway. My approximate expectations are for the UK to follow a similar trend to that of the US Housing market which I forecast to rise by 30% by early 2016 (15 Jan 2013 - US Housing Bear Market Over? House Prices Forecast 2013-2016 ).

The following graph illustrates the current state of the new UK housing bull market of 2013 following the embryonic bull market of 2012.

The bottom line is that the UK housing bull market is now well underway for which readers of my articles have had well over a years head start! This is a new bull that has many years to run the trend for which I will seek to map out over the coming months.

Asset Allocation

The following represents my asset allocations and targets by end of 2013.

  Jan 2012 Mar 2013 Dec 2013
UK Property
0%
50%
60%
Cash & Bonds
60%
32%
18%
Stocks
40%
18%
22%

 

UK housing market analysis continues in my next article on population growth and earnings as academic economists repeatedly mistakenly state that UK house prices cannot rise whilst average earnings are falling, so ensure you remain subscribed to my always free newsletter to get this in your email in box.

Source and Comments: http://www.marketoracle.co.uk/Article40717.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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Comments

R.E.B
03 Jun 13, 15:35
E.U/Housing

The real point about the UK leaving the EU is that it will only do any good if it is done as a first step to building a viable free market economy. By all means cut ourselves loose of the burning platform of the EU, but if we carry on attached to the other one of socialism then it will all come to nought. Re housing, the mistake I see people making is the same one they made in the late 80s when they took on too much debt to buy. When interest rates turned against them they got reposessed. It is cold comfort to these people that those houses are now 4 times value, because they could not ride the storm. I think buy to rent has got to be a winner over the next ten years though.


4caster
03 Jun 13, 22:04
Migration

An anti-migration war is the last thing Europe needs at present.

But I think your fear of a new influx of Romanians and Bulgarians is wide of the mark. Conversely, employers in the vegetable picking and packing business expect a mass exodus of these workers to result from the imminent opening of the labour market in Germany and elsewhere. Fearful that vegetables will soon be rotting in the fields, they are begging the government to allow them to recruit in Ukraine and elsewhere.

1,800,000 UK citizens are presently living elsewhere in the EU. If we close our borders to EU nationals we can expect all those to be sent "home".

The EU has many faults, but without free movement of goods, capital and people we would all be poorer.

I agree that public grants to help immigrants to maintain separate communities are barmy. But in my experience the only foreigners who generally wish to remain apart are Muslims. Others are happy to integrate, and it is towards that end that any public money should be directed, especially to improve their English and their knowledge of our way of life.

The table showing "the global trend towards multiculturalism by most western nations" is strange. For starters, it includes Japan and New Zealand, which by no stretch of the imagination are "western nations". So why does Singapore not qualify for inclusion? Singapore positively revels in multiculturalism. Inter-racial marriage is on the increase, and only the 14% who are Muslim Malays are determined to stand apart. Singapore has a national population of some 4 million on an island the size of the Isle of Wight, and still employs another 1 million "guest workers". And by most measures Singapore has the highest standard of living in the world.


Nadeem_Walayat
03 Jun 13, 23:47
Immigration and UK Housing market

Hi

Net migration of over 150k per year is an important driver for the NEW housing bull market - currently underway.

The reason why singapore is successful because it has a strong singaporian identity amoungst its many people, i.e. they put citizenship AHEAD of their religion, that is NOT the case amongst most UK immigrant communities who put RELIGION ahead of citizenship because the UK political system is motivated to create vested interest voting blocks.

Britian could learn a lot from Singapore in fostering of a British identity and secular elements such as banning of religous symbols such as headscarves in schools which is how it is in Singapore.

The facts are that immigrant communities in the UK do not integrate as a consquence of multiculturalism you see this in virtually EVERY immigrant community, name any community arriving during the past 50 years and I will list their isolationist ghetto's, Muslim, sikh, hindu, even east european christians,becasue the system does not foster integration but supports seperation. This will be the experience of most people that reading this.

Best

NW


Zahlen
04 Jun 13, 23:03
Interest rates

Hi Nadeem

Original analysis, as always. Like the concept of pubs being mansions haha.

Some questions which I feel have important effects on housing:

1) Interest rates. over the term for which your housing forecast mentions, it is likely that rates will rise? By 2015 (if we take your previous 2009 rate forecasts as example) we could see the 10yr around 3.5% at least. Mortgage rates around 5-6%. This will put significant downward pressure on your forecast.

2)I recall you writing previously, London would see the largest gains in house price potentially. Foriegn buyers are a very large percentage of buyers of anything over 500k, which is largely what has kept London prices sustained.

If prices do see a 5-10% drop at any stage, this will significantly halt foriegn investment (no one likes to catch a falling market)

3)Capital flows. US is likely to have to raise rates soon.

How will global capital move? Will EU buyers trying to escape bank deposit taxes flee to US property instead?

Net I'm looking for prices to stay flat in real terms (which is good enough).

Thanks

Zahlen


Nadeem_Walayat
05 Jun 13, 00:51
UK Housing Bull Highly Probable.

Hi

One only needs to look at the bearish mantra in the face of a 5 year bull market in stocks to see how easy it is to paint a contrary picture, which as you suggest can also be easily done for UK housing as well.

My primary objective is to identify high probability trends and then put my OWN money on the line. This is what drives my analysis.

So I am not going to put 60% of my wealth into UK housing on a whim, rather I am very confident that there is a high probability for success, just as I avoided UK property from 2007 to early 2012 due to my expectations for first a crash and then depression in house prices.

So yes, it is very easy to paint a bearish picture for UK house prices, I can do it very easily, i.e. falling real terms wages, future interest rate hikes, end of QE etc... it is very easy to do, BUT, it is NOT PROBABLE! i.e. the drivers you think will drive prices - WON'T! We have seen this with the stock market with the debt deflation mantra and it is only with hindsight that the FOOLS that populate the financial press / sales men refer to what actually has driven the stock market i.e. rampant money printing as I stated right at the start in March 2009.

The UK housing market is now in a bull market, this is not based on hope but what I see as the most probable outcome and as the trend manifests itself then so will the outcome become more probable, all the way to the next bubble peak.

Best

NW


Pablorodenski
05 Jun 13, 11:47
Interest rates

Hi Nadeem,

I was about to raise the question of interest raises 4/5 year out putting strong downward pressure on any housing boom that looks set to occur in the meantime due to the combination of cheap money, the government now encouraging banks to actually lend that cheap money more widely and the supply and demand arguments raised above concerning increased immigration and limited housing stock. But Zahlen beat me to it.

"1) Interest rates. over the term for which your housing forecast mentions, it is likely that rates will rise? By 2015 (if we take your previous 2009 rate forecasts as example) we could see the 10yr around 3.5% at least. Mortgage rates around 5-6%. This will put significant downward pressure on your forecast."

But I think we've been promised these low rates till 2017 ? :)

I can see opportunity therefore on a 4/5 year basis but worry that it will end in tears slightly longer term when interest rates rise significantly. Of course property is an illiquid asset and costly and time consuming to get in and out of and so would worry that over this time frame it maybe high risk. And over the longer term which is the time frame you'd typically invest in property, I'm not sure how prices will fare in a higher interest rate environment when prices will have risen from today's already high prices. After all houses aren't cheap are they ? They are affordable (temporarily) due to artificially low interest rates ? Just my rambling thoughts.

Thanks for your writings and thoughts on this.

Best

Pablo


Nadeem_Walayat
05 Jun 13, 18:21
Bull Market

Hi Pablo

It is just too early in the trend to think about when it will end, i.e. I would not be surprised if the new bull market runs for the next 10 years.

Best.

NW


Zahlen
05 Jun 13, 23:44
Interest Rates

thanks for your reply Nadeem. Yh, got to admit, your property calls have been impressive (and the Dow also). the call on property rallying into June 2010 election was very slick.

I agree with Pablo on the duration of the property market sustainability.

Also, as I've previously read, you are against debt (well dont favour it when buying properties).

Although, I dont think many people reading this will be able to buy in cash in London!

Great analysis as always. Always great to read it. Although I do not agree with your immigrant multi culturalism comments.

People complaining about economic migrants, not wanting to totally immerse themselves in British culture, do Brits in Spain start speaking Spanish? My 2 cents.


Pablorodenski
06 Jun 13, 10:44
House Prices

Now I read back my comment I realise it is more that we are not starting from a low base in prices that is my main issue.

At the end of the 80s prices that were affordable at 12% mortgage rates became unaffordable when rates rose to 15 or even 17%. This really crushed the housing market (far more deeply than in recent years) to the point where sentiment and prices took a real beating over a number of years. In parallel we were moving from a double digit interest rate environment to a much lower interest rate environment and by the time sentiment turned back prices were dirt cheap on affordability basis because of the beaten down prices and low interest rates. And interest rates kept going down fuelling the boom! Until you had a period like 2003 where mortgage rates were a fraction of what they were in the 80s and average incomes were on the their way to doubling - is it any wonder we had a massive boom ? Easy to see in hindsight.

Interest rates can't go any lower and the best hope is that there are no significant rises for a few years yet ? Surely any boom will be a much more short-lived one ?

But I do think the housing bull market, like the stock market, has more to come, I just think best gains are behind us for both ?

Best

Pablo


Nadeem_Walayat
08 Jun 13, 03:07
Uk housing market

Hi

There are so many drivers for UK house prices that its going to take a dozen more articles to get through the main points.

Other important factors I have covered at length during the past year illustrate why its always different this time, cannot say because last time it was x,y,z so it will be the same this time.

Thats NOT how it works, not for stocks, not for housing.

For instance, when the banks start to go bust, and they WILL! Then what is the risk of holding cash or property?

The smart money knows this and has been vacating cash for hard assets such as property.

So my focus on property has been for protection from my wealth being stolen, which if it were left in the banks it WILL be!

The money you think you have in the bank is NOT YOUR MONEY, It can be stolen at ANY time Cyprus style, think about that and then look at the drivers for house prices going forward, NO Rear view mirror here, it's a case of anticipating the FUTURE.

And don't forget the PRIMARY theme running through ALL of my articles - THE INFLATION MEGA-TREND

i.e. What for house prices when inflation is running at 20% per annum?

Some times people need to be jolted into facing reality, in that the government WILL steal your wealth!

Best

NW


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