Bobbins Posted January 18, 2011 Share Posted January 18, 2011 (edited) Not everyone is upset with the inflation figures. Being young (relatively) with a £200k mortgage and little savings, I'll take as much inflation as you can give to me. That is as long as my salary keeps up with it, and given I work in the oil industry that should not be a problem. Just look at anyone who bought a 5 bed stucco in Knightsbridge in 1970 for £20k. As long as your salary rises with inflation, then you may have a few of years of pain as interest rates kick up, but after that it's plain sailing, living virtually mortgage free for the rest of your life. Inflation hurts old people. Young people with massive debt is its friend, as long as you can bunker down and continue to repay during the high interest rate period. With high inflation but low saving rates, anyone who has a big deposit but no house is screwed. Inflation, bring it on. Edited January 18, 2011 by Bobbins Quote Link to comment Share on other sites More sharing options...
leicestersq Posted January 18, 2011 Share Posted January 18, 2011 Not everyone is upset with the inflation figures. Being young (relatively) with a £200k mortgage and little savings, I'll take as much inflation as you can give to me. That is as long as my salary keeps up with it, and given I work in the oil industry that should not be a problem. Just look at anyone who bought a 5 bed stucco in Knightsbridge in 1970 for £20k. As long as your salary rises with inflation, then you may have a few of years of pain as interest rates kick up, but after that it's plain sailing, living virtually mortgage free for the rest of your life. Inflation hurts old people. Young people with massive debt is its friend, as long as you can bunker down and continue to repay during the high interest rate period. With high inflation but low saving rates, anyone who has a big deposit but no house is screwed. Inflation, bring it on. Alas, global wage arbitrage. If an Indian is prepared to do the same job as you for one tenth of the money, expect the relative wages of you and said Indian to move until there is parity. Part of this correction mechanism is an increase in the prices you pay for the stuff you want. Wage inflation is also part of the correction mechanism, but only for the Indian. Quote Link to comment Share on other sites More sharing options...
J-Hi Posted January 18, 2011 Share Posted January 18, 2011 With high inflation but low saving rates, anyone who has a big deposit but no house is screwed. Not if they intend using that deposit to buy a house which is falling in value numb nut Quote Link to comment Share on other sites More sharing options...
Bobbins Posted January 18, 2011 Author Share Posted January 18, 2011 With high inflation but low saving rates, anyone who has a big deposit but no house is screwed. Not if they intend using that deposit to buy a house which is falling in value numb nut Not all houses fall in value precipitously. If you wan't to aspire to a very desirable area then I think this image tells a good story. And don't come back to me with this in poncy craphole London. This gets mirrored in the nicer parts of Harrogate, Leeds, Bristol etc. Anyway, the person with the deposit will be stumping up for a 25 year (large) mortgage after the inflation has happende, while those with property will be a lot closer to being mortgage free, having had their debt inflated away. Quote Link to comment Share on other sites More sharing options...
Roseland69 Posted January 18, 2011 Share Posted January 18, 2011 Thank heavens wage inflation is through the roof!! Oh.... Quote Link to comment Share on other sites More sharing options...
Bobbins Posted January 18, 2011 Author Share Posted January 18, 2011 (edited) Thank heavens wage inflation is through the roof!! Oh.... I agree the public sector is struggling, but there'll be carnage soon. Just look what happened in the '70s. When you've had a £300 per month cut in mortgage payments, you are less likely to worry about whehter you get a 1 or 3% increase. Push up interests though and the unions will be screaming for inflation busting pay rises As for the private sector wage growth is already up near 3%. History tells us that inflation and wgae grwoth go hand in hand. Edited January 18, 2011 by Bobbins Quote Link to comment Share on other sites More sharing options...
leicestersq Posted January 18, 2011 Share Posted January 18, 2011 I agree the public sector is struggling, but there'll be carnage soon. Just look what happened in the '70s. As for the private sector wage growth is already up near 3%. History tells us that inflation and wgae grwoth go hand in hand. History also tells us that what happened in the past is no indication of future performance. Quote Link to comment Share on other sites More sharing options...
Alan B'Stard MP Posted January 18, 2011 Share Posted January 18, 2011 (edited) It's not inflation - it's people getting poorer. Edited January 18, 2011 by Alan B'Stard MP Quote Link to comment Share on other sites More sharing options...
Bobbins Posted January 18, 2011 Author Share Posted January 18, 2011 History also tells us that what happened in the past is no indication of future performance. History tells us inflation eats debt, or are you going to argue that it's different this time Quote Link to comment Share on other sites More sharing options...
babesagainstmachines Posted January 18, 2011 Share Posted January 18, 2011 (edited) I hope you get a pay freeze, lose your house and go bankrupt. Ok, I don't really, but you have an "I'm alright, Jack" attitude which is a bit repugnant. You will need prudence to be rewarded one day, and I'm sure you will sit on the other side of the fence. Edited January 18, 2011 by BabesAgainstTheMachine Quote Link to comment Share on other sites More sharing options...
Brave New World Posted January 18, 2011 Share Posted January 18, 2011 Not all houses fall in value precipitously. If you wan't to aspire to a very desirable area then I think this image tells a good story. And don't come back to me with this in poncy craphole London. This gets mirrored in the nicer parts of Harrogate, Leeds, Bristol etc. Anyway, the person with the deposit will be stumping up for a 25 year (large) mortgage after the inflation has happende, while those with property will be a lot closer to being mortgage free, having had their debt inflated away. I live there and although not as strong as neighbouring areas (rural York, Leeds and Bradford) there have been are an ever increasing amounts of drops - one house has dropped £100k, in a nice area of HG. As others have mentioned the abscence of wage inflation defeats your point. To really let inflation do the job of eroding such big debts (i.e. a large mortgage) inflation would have to increase much more - with the MSM picking up on inflation (through stories of fuel, heating price hikes etc) do you really think the 'masses' would be able to stomach such jumps in prices when their wages and disposible income are already struggling to keep pace at the moment? London, due to its international profile of buyers, will always be inherently different to your examples above. From my own experience of working in Leeds there ain't the well paid jobs in the region to sustain these prices, let alone the available credit to support purchases of cheaper property in these areas. These areas are perfect 'creme brulee' examples of a few people with money and a lot of people playing catch up using previously cheap credit. Even at the top end a couple of weeks ago in Harrogate all of the £million properties for sale - non were STC. Quote Link to comment Share on other sites More sharing options...
SomethingHasToGive Posted January 18, 2011 Share Posted January 18, 2011 Not everyone is upset with the inflation figures. Being young (relatively) with a £200k mortgage and little savings, I'll take as much inflation as you can give to me. That is as long as my salary keeps up with it, and given I work in the oil industry that should not be a problem. In a economic environment with high and potentially rising unemployment, anyone who is replaceable can have their wage frozen. Some of the irreplaceable people will also get hit with the same stick, because of the arbitary target setting of large companies who are trying to keep their costs down and silly politics in large companies. We still have 'the cuts' to come and their effect on the labour market. As such, we'll just get eroding standards of living. Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted January 18, 2011 Share Posted January 18, 2011 It's not inflation - it's people getting poorer. sshhh, dont let the cat out of the bag Quote Link to comment Share on other sites More sharing options...
singlemalt Posted January 18, 2011 Share Posted January 18, 2011 Inflation - Good for some. Deflation - Good for some. Stability - Good for everyone. Quote Link to comment Share on other sites More sharing options...
SomethingHasToGive Posted January 18, 2011 Share Posted January 18, 2011 Inflation - Good for some. Deflation - Good for some. Stability - Good for everyone. +1 Quote Link to comment Share on other sites More sharing options...
Bobbins Posted January 18, 2011 Author Share Posted January 18, 2011 (edited) I hope you get a pay freeze, lose your house and go bankrupt. Ok, I don't really, but you have an "I'm alright, Jack" attitude which is a bit repugnant. You will need prudence to be rewarded one day, and I'm sure you will sit on the other side of the fence. Don't worry, I've had worse happen to me. Is that the I'm alright Jack attitude the one that wants to see massive house price crash falls, that see families evicted for negative equity and not being able to pay the mortgage, so that someone can buy a house more cheaply? Let's face it, a lot of people pray for house price carnage on this site, and don't give a damn for the personal consequences Edited January 18, 2011 by Bobbins Quote Link to comment Share on other sites More sharing options...
porca misèria Posted January 18, 2011 Share Posted January 18, 2011 Inflation - Good for some. Deflation - Good for some. Stability - Good for everyone. singlemalt - Good for connoisseurs. Quote Link to comment Share on other sites More sharing options...
babesagainstmachines Posted January 18, 2011 Share Posted January 18, 2011 Don't worry, I've had worse happen to me. Is that the I'm alright Jack attitude the one that wants to see massive house price crash falls, that see families evicted for negative equity and not being able to pay the mortgage, so that someone can buy a house more cheaply? Let's face it, a lot of people pray forhouse price carnage on this site, and don't give a damn for the personal consequences That's a mis-representation. Most people on this site wish the stupid boom hadn't happened. Quote Link to comment Share on other sites More sharing options...
Brave New World Posted January 18, 2011 Share Posted January 18, 2011 Don't worry, I've had worse happen to me. Is that the I'm alright Jack attitude the one that wants to see massive house price crash falls, that see families evicted for negative equity and not being able to pay the mortgage, so that someone can buy a house more cheaply? Let's face it, a lot of people pray forhouse price carnage on this site, and don't give a damn for the personal consequences Ohh it's ok, i am fine with fixing a MARKET so that people who have over stretched themselves or even lied on self certs can stay in their house. I am fine with using hard earned savings to subsidise the reckless and feckless. Face it you can't beat the market and the market is sinking even with record low IRs. Quote Link to comment Share on other sites More sharing options...
mel in w9 Posted January 18, 2011 Share Posted January 18, 2011 Not everyone is upset with the inflation figures. Being young (relatively) with a £200k mortgage and little savings, I'll take as much inflation as you can give to me. That is as long as my salary keeps up with it, and given I work in the oil industry that should not be a problem. Just look at anyone who bought a 5 bed stucco in Knightsbridge in 1970 for £20k. As long as your salary rises with inflation, then you may have a few of years of pain as interest rates kick up, but after that it's plain sailing, living virtually mortgage free for the rest of your life. Inflation hurts old people. Young people with massive debt is its friend, as long as you can bunker down and continue to repay during the high interest rate period. With high inflation but low saving rates, anyone who has a big deposit but no house is screwed. Inflation, bring it on. Wow, can I give you the numpty of the year award... I wouldn't be so cocky about having a job in the oil and gas industry. My husband has worked in that industry for the last 32 years (so not so young) and he has told me even the big companies are laying off people all over the world. He is in a very senior position but even he realizes his job is not bullet proof. Besides with a 200k mortgage, what are you going to do if the BoE is finally pressured to raise rates. No doubt it will be the final push to topple the prices everywhere even in London... I don't envy your odds, that's for sure. Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted January 18, 2011 Share Posted January 18, 2011 Inflation - Good for some. Deflation - Good for some. Stability - Good for everyone. Problem is, the time for stability (in house prices, anyway) was roughly a decade ago.. Quote Link to comment Share on other sites More sharing options...
Bobbins Posted January 18, 2011 Author Share Posted January 18, 2011 Wow, can I give you the numpty of the year award... I wouldn't be so cocky about having a job in the oil and gas industry. My husband has worked in that industry for the last 32 years (so not so young) and he has told me even the big companies are laying off people all over the world. He is in a very senior position but even he realizes his job is not bullet proof. Besides with a 200k mortgage, what are you going to do if the BoE is finally pressured to raise rates. No doubt it will be the final push to topple the prices everywhere even in London... I don't envy your odds, that's for sure. Well he's obviously a senior fcukwit, because if you can spell oil and gsa (tee - hee) you can land a job at the moment. Quote Link to comment Share on other sites More sharing options...
Peter Hun Posted January 18, 2011 Share Posted January 18, 2011 I hope you get a pay freeze, lose your house and go bankrupt. Ok, I don't really, but you have an "I'm alright, Jack" attitude which is a bit repugnant. You will need prudence to be rewarded one day, and I'm sure you will sit on the other side of the fence. I'm sorry but he is correct. Inflation wipes out the debts of borrowers, which is why I got the biggest loan I could and bought property as soon as the credit crunch hit. Anyone who is a saver in an inflation era is a sucker. Quote Link to comment Share on other sites More sharing options...
monks Posted January 18, 2011 Share Posted January 18, 2011 Well he's obviously a senior fcukwit, because if you can spell oil and gsa (tee - hee) you can land a job at the moment. You are coming across like a giant to$$er. Quote Link to comment Share on other sites More sharing options...
mel in w9 Posted January 18, 2011 Share Posted January 18, 2011 You are coming across like a giant to$$er. Something tells me that is the point. Quote Link to comment Share on other sites More sharing options...
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