Inflation

[noseall]

Oh excited about 350 % increase how much did you actually pay for your house In actual monthly payments over the years not the actual initial cost of house to justify your supposed profit. Have to laugh at people who say oh I bought my house for £££ and it now worth £££££ forgetting about all the interest they paid . My supposed minimal 1251 %increase ****es all over yours

Me?

Pretend

 

[noseall]

Nosey your house's value hasn't increased by 350%.

Pretend

 

[noseall]

Depends whether he believes in the great reset or not.

Can any of you anti-vaxx, anti-covid morons tell the forum what this supposed great reset is?

Or is it your usual anti-covid anti-vaxx made up trolling nonsense?

 

[noseall]

All the people who have and are maxxxed out on credit cards , mortgage payments , pcp’s and loans should be afraid.

And basically all those who save and are are positive financially will welcome higher interest rates?

PHEW!

 

[JohnD]

And basically all those who save and are are positive financially will welcome higher interest rates?

PHEW!

Sadly not, if, as usually happens, the interest rates are lower than the rate of inflation.

By amazing coincidence, when the government of a country has a huge National Debt, it is very common for inflation in that country to rampage for ten years or so, causing the debt to shrivel away in real terms. While GDP continues to escalate in the new, shrinking pounds. Sorry. I mean, in the new, shrinking currency of whatever country it is.

This has the effect of stealing wealth from savers.

 

[JohnD]

I'm a bit surprised nobody thought of it before. You'd think it would have occurred to somebody.

Hello, what's this?

...governments are going to use inflation and low interest rates to shrink their debt. especially the US.

Twenty years of 5% inflation will shrivel their debts away.

Bad news for anyone who buys or holds T-bonds.

 

[Dork Lard]

Maybe, but how would you explain to Notchy how printing extra money devalues the existing money?

I wouldn't attempt to because it simply isn't possible. Nobody fully understands it, not even those who instigated it.

How the economy works is horribly complex and you have a much better chance of understanding politics or even wimmin.

 

[Notch7]

Let's say that today you can buy in a pub 4 pints of beer with a £10 note. (Yes you can get 4 pints for a tenner here up North!). Tomorrow the government prints and distributes to all the population sufficient £10 notes to double the number of £10 notes in circulation, in order to make everyone look richer and buy more votes. Nothing else has changed, i.e. no new riches have been discovered but you now have £20 to buy your beer, an amount that you think should buy you 8 pints.

Wow isn't that great that they can just print double the money and make us all twice as rich? I'm going to have a real good night out BUT...

No. The government has printed double the money, but it hasn't been able to print double the water, hops, yeast and grain needed to make double the beer, because these are real commodities that require more than just printing to obtain.

So, the pub landlord won't give you double the beer just coz you've got an extra printed £10 note, or he would run out of beer, because his amount of beer hasn't doubled like the money has. Therefore he has to double the price of the beer to keep up with the devalued (diluted) currency and keep his stocks correct.

That's how inflation works; welcome to fiat currency Notch.

It isn’t as simple as that.

I presume you are talking about Quantitative Easing rather than Govt borrowing.

Whilst in theory Quantitative easing devalues money, the devaluation is met with an increase in the value of assets. The increase then results in the higher profits from hedges or speculation. If the speculation pays off the currency moves back to higher valuations

What tends to happen is the rich increase their wealth by an increase in value of investments and property.

 

[Notch7]

This has the effect of stealing wealth from savers.

My understanding is QE increase value of stock markets and house prices

So those who have savings in investment bonds or are putting money into a pension fund will see an increase in their wealth

whilst those who have money in the bank, will lose out - because the old fashioned idea that savers get a bit less than base rate and borrowers pay a bit above the base rate, is out of the window. Mortgages are miles higher than base rate. Saving in the bank is worthless.

 

[Deleted member 292770]

Oh excited about 350 % increase how much did you actually pay for your house In actual monthly payments over the years not the actual initial cost of house to justify your supposed profit. Have to laugh at people who say oh I bought my house for £££ and it now worth £££££ forgetting about all the interest they paid . My supposed minimal 1251 %increase ****es all over yours

Don’t feed the troll.

 

[Deleted member 292770]

forgetting about all the interest they paid .

And the tens of thousands they ploughed into it.

 

[noseall]

Oh excited about 350 % increase how much did you actually pay for your house In actual monthly payments over the years not the actual initial cost of house to justify your supposed profit. Have to laugh at people who say oh I bought my house for £££ and it now worth £££££ forgetting about all the interest they paid . My supposed minimal 1251 %increase ****es all over yours

I didn't get penalised for paying my mortgage off early, but thanks for the concern.

 

[gas112]

I didn't get penalised for paying my mortgage off early, but thanks for the concern.

so you still paid thousands and thousands in interest glad we cleared that up

 

[noseall]

Depends whether he believes in the great reset or not

And still none of the loons have an answer.

 

[BlueLoo]

As a young man starting out I was told to "forget trying to understand politics, try to learn to understand economics instead".

I certainly know a lot more about economics than I do wimmin, yet I still don't fully understand £money. I don't think anyone does, some know more than others but generally, as is evidenced here on Diynot, most folk blissfully know SFA.

There's a theory that China's central bank prints double the currency it is ordered to. You have to delve deep into the world of economics to have heard even a slight whisper of this, yet the possibility they have been answers very many unanswered question.

Here's a cure for inflation. CBDC, or Central Bank Digital Currency. Look it up, read it & weep. If Bitcoin spawned evil children then CBDC is the b@$t#rD offspring of those evil children.

Careful what you wish for, in the future you will own nothing & you will be happy.

And then we get quantum computing which will push us all back into using Gold and barter!.

We already have a form of digital currency in reality. I genuinely cannot remember the last time i used cash in any significant value. I use PayPal, revolut and G-Pay for everything these days. I have no wallet. I no longer carry any cards with me.

The big problem with CBDC is that government will not be able to resist interfering with it. BitCoin doesn't suffer that so governments will have to "discourage" the use of other digital currency in their jurisdiction over the CBDC.

You will get people clinging onto cash but the governments will just deflate it to death rather than go through the social upheaval of removing cash altogether.