eSeM

The state the the FTSE bears little relationship to perceived the state of the UK economy. The value of the £ does.

lovegroova

It's a lot more complicated than that. As before, one metric is a poor way of representing things.

eSeM

Not really, the value of the currency against other currencies is easily the best indicator of the state of a countries economy, the FX traders look at the whole picture before they buy and sell.

The FTSE will dive in value as soon as interest rates start to increase.

Nick Graves

I keep telling you we're doing well in the race to the bottom! This is quite a good approximation of currency devaluation:

10 years House Price Change in United Kingdom

eSeM

What's the relationship to currency devaluation?

Nick Graves

House prices (and other hard assets) don't particularly increase in real value - the currency is devalued by bond-printing! Ten percent compound inflation doubles apparent prices in 7 & a bit years!

It's why those who hold real assets like stealth inflation. Especially those indebted, as it writes off their debts, too. The old money trick...

Thus, the chart is probably more reliable than the CPI/RPI official figures, which are er, "rebased" on a regular basis.

lovegroova

And the £ will increase in value if/when that happens...

Nottm_S2

If one metrix doesnt work why quote equity prices? Something like 80% of the FTSE100 earnings are outside the UK, it bares little relation to the UK economy.

nick is correct, we're in apparent good shape rather than actual good shape. Hence house prices accelerate away from wages

lovegroova

To illustrate my point that quoting one metric was silly.

(You'll note I also quoted the All share, as well, because I knew someone would point out the "outside UK" nature of the 100).

gaddafi

it would work too

the bigger problem is that they keep borrowing hence the cycles