Cheesebone
Member
- Jan 30, 2011
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@Cheesebone That's an example of natural monopoly. It's not the norm but, anyway, with monopolies, prices tend to rise.
The problem with speculation is that i'ts not about the good itself for your enjoyment but the profit. We're putting money before necessities again. That's what happened with the house bubble. We should talk about conscious investment and not speculation. We saw how risky is and who end up paying the mess.
Example of speculation: when someone buys 20 houses to speculate (they expect double the money in 5 years), you need to see that that is creating poverty on the other side: prices will rise and you'll have to pay insane rates if you want to buy a place right now.
They expected it to cost twice the cost now, yes, but were they smart? Recession, bubble... what are they doing with 20 empty houses now? They better keep them locked and wait for the prices to rise again. That means less houses for the rest and the prices not being able to drop consequently.
Some agents use the monopoly (see oil) to influence on governements and wars, rising the price of the product by the way.
Free market can't be free of taxes like the ones everyone pays and the market is more efficient when you have to compete.
The point I make is that the speculation would never have existed to that extent absent the government policies that preceded it. Mass-Speculation wasn't the problem - it was a side-effect.
And blaming oil price rises on speculation is a HUGE misconception largely promoted by media outlets and a lot of "liberal" talk as well. Any research into how the oil futures market actually functions will explain how these oil prices aren't a result of speculation.
And yes, earlier I was absolutely talking about a "natural" monopoly, which would only form under a legitimate free market system. That's the point. The kind of monopoly you're worried about simply wouldn't exist in a free market to begin with
As far as housing goes, I'm still convinced that housing prices have nowhere to go but down (in terms of real value at least). Holding on to these properties longer isn't going to help anyone out, unless we see massive inflation and prices for EVERYTHING start to explode and housing prices rise nominally. That will bail everyone out who acted irresponsibly and made awful speculative decisions on real estate. Of course, this comes at the expense of punishing people who actually saved their money and acted responsibly while everyone around them was gulping from the punch bowl.