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hedi

An Inflation Question Or Point.

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i am very worried about inflation taking off. at present i believe we are heading for asset deflation and possibly living cost inflation.

what has been on my mind is what other choice does any govement,the uk ,us and europe, have other than to try and inflate their way out of this mess.

imagine you are in govenment. you know and they know what the household and govenment debt is. you know the income. and as much as i hate to say it, they are not all completely stupid. the figures simply do not add up.

it seems to me that we are like the guy on 25k a year with 60k on his credit cards. the only way out is to massively increase his income. but he can't.

now i know that we dont have to pay off the money in one go,etc etc. but looking at the figures of debt, here and the usa, we have passed the point of return. we have been borrowing money to pay the interest. once that starts it really is the end. ask any bankrupt.

but you are in govenment. you cannot just throw in the towel. you cannot ,say right let everything crash, that is not a political option. for any party.

so what is the solution.

the debt is in the past. lets try to inflate it away.

this is the question i keep asking. DOES THE GOVENMENT HAVE ANY OTHER REALISTIC OPTION BUT INLATE.

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i agree, it must happen.

like peter schiff says: do you really think an american president is going to go the population and say 'we have to stop spending, start saving, reduce our standard of living, make ourselves poorer, and pay our debts to the countries we owe, like china' - its unthinkable and isn't going to happen.

they must default and inflation is the best way.

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We can't just carry on as is: that much is clear.

IMO, there are radical things they can do, but it is hard to believe that there is the political will/imagination to try it.

I am becoming more and more convinced that mortgage lending could be funded at low/no interest by a nationalised bank (say, Northern Rock), funded directly via QE. I'm sure the other banks would cry foul, but they caused this mess and shouldn't be surprised to see retribution. Maybe a few more banks will go bust too (with a spot of luck).

Vigorously capping mortgage rates to a set multiple (like they do in France) and rationing the mortgage to one per person/couple would stop the bidding up of prices, thus forcing people to rent. People could still get private 2nd mortgages or cash buy, but it would stop this idiotic speculative cycle from sucking all the fruits of peoples labour in every decade or so. Surely, there are more productive and fulfilling things this money can go towards?

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You assume they have even that option...

http://ftalphaville.ft.com/blog/2009/08/04...ebunked-by-ubs/

MY POINT IS WHAT ARE THE OTHER OPTIONS. THEY MIGHT GO WITH THAT OPTION AND JUST BUY UP ALL OF THEIR OWN DEBT. WHAT THEY ARE DOING WITH QE. I READ SOMEWHERE THAT THE GOVENMENT OWN 50 PCT OF THE GUILT MARKET.

I UNDERSTAND THE ARGUMENTS. BUT ARE WE RUN BY WISE MEN. AFTER ALL WE ARE RUN BY OPTAMISTS NOT BRAINS. ALTHOUGH HISTORY SAYS IT MIGHT NOT WORK, WE ARE THE GREAT GENERATION THAT LIKES TO IGNORE HISTORY, SO THE THINING GOES, LETS TRY IT.

THE POINT AGAIN IS, AND THIS I DONT KNOW, WHAT ARE THE OTHER OPRIONS?

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MY POINT IS WHAT ARE THE OTHER OPTIONS. THEY MIGHT GO WITH THAT OPTION AND JUST BUY UP ALL OF THEIR OWN DEBT. WHAT THEY ARE DOING WITH QE. I READ SOMEWHERE THAT THE GOVENMENT OWN 50 PCT OF THE GUILT MARKET.

I UNDERSTAND THE ARGUMENTS. BUT ARE WE RUN BY WISE MEN. AFTER ALL WE ARE RUN BY OPTAMISTS NOT BRAINS. ALTHOUGH HISTORY SAYS IT MIGHT NOT WORK, WE ARE THE GREAT GENERATION THAT LIKES TO IGNORE HISTORY, SO THE THINING GOES, LETS TRY IT.

THE POINT AGAIN IS, AND THIS I DONT KNOW, WHAT ARE THE OTHER OPRIONS?

will not happen

the best they can hope for is 5% per annum inflation over 20 years with serious fiscal restraint.

i expect that in 20 years DEBT will be a word hated by all. countries will probably have it in their constitutions tight borrowing rules.

we are entering a decade or two of world deflation. there will be exceptions tho. those with week curencies may see inflation in produts they are competing with stronger nations for eg food and water

they want you to think what your thinking now so you clean out your bank account and buy things

Edited by getdoon_weebobby

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