Umbilical cord between land and debt

james armstrong james36armstrong at hotmail.com
Fri Nov 23 22:13:06 GMT 2007


Land debt.

What does Land mean to you?
Thought land was for growing things? or building on?  There's something else.
Here's a clue. I thought houses were for living in until I found that  The City , Bank of England , Kate Barker and the Chancellor think they are  a means of growing the economy through housing debt…...and call them 'assets', 'collateral' , 'an obvious variable to manipulate', 'equity', 'alienable wealth' 'supply', 'an important  economic sector' (all from  Downing Street and Threadneedle Street papers.)   Well, land too has found  uses that Adam never thought of……
The sale of houses in a year amounts to 1 million (the number sold) times £3,000, the average  Stamp Duty , equals £3billion to the Treasury.and what is the stamp duty on land to the Treasury?

But that sum is peanuts in another,  obscure financial  scenario.
The importance of housing to the Treasury is that it puts people into mortgage debt and the banks then recycle the I.O.U.s to use as a new form of money.  We can quantify the housing debt at £565 billion.
The Treasury's every day concern like all good businessmen's is to grow this market- that is -  to cause house prices to rise.
But now add in an even greater  sum-  the debt on land, or IOU's held by banks, firms, trusts pensions  and every sort of financial cobbler.  This must amount to a sum far exceeding the amount borrowed on houses.  
I can find out the figure of land transactions from the Land registry but  an infinitely grater land transaction takes place each time a firm or toff borrows money on their estate.
Private Landowners , but include Corporations and  nearly every quoted  limited company, can and do borrow enormous sums on the security of their land and property.

The Treasury, the macro-economists ,also the banks,  know and welcome this, since it stimulates the economy.   But the Chancellor goes one further by adopting policies which increase the value of land. The same service they provide for the mortgage lenders the banks..
The most obvious example is pumping £3billion directly into land via the Common Agricultural policy. ( We know that six landowners  got £1million per annum  some years back.) The Queen gets £400,000 pa in CAP .Like all landowners she too benefits from the increased value of the land which has been a feature of the last two decades.

This explains the bizarre statement from HMG this week, yes from the people's friend, the  Labour government, that they do not support the proposal from the EU  to limit handouts to individual farmers to £70,000 pa. Bizarre because successive agricultural ministers for the last twenty years have been welcoming 'reform'  (usually 'impending reform')   of the CAP.

Reasons  which springs to mind include the practical one that reform would stop fueling the land value increase on which the macro-economists rely for  controllable and hidden  inflation to stimulate the economy and secondly,  the political consideration, that large landowners have clout and  Labour wants to capture their traditional conservative vote, also to repay their property pals flocking round Downing Street for funding the Labour 'Party'  and do so at no political price since farming  is  an esoteric subject not the concern of the middle ground. Because land values aren't on Tesco on-line nor displayed in Ikea they don’t register with  95% of the population.
  There again it may be the idiots in Westminster have been conned by the most powerful political lobby in Europe the National Farmers Union.                                         Land:landvalues JA Nov 2007


_________________________________________________________________
Get free emoticon packs and customisation from Windows Live. 
http://www.pimpmylive.co.uk



More information about the Diggers350 mailing list