Guest The Relaxation Suite Posted October 1, 2009 Share Posted October 1, 2009 (edited) duplicate Edited October 1, 2009 by D-503 Quote Link to comment Share on other sites More sharing options...
Guest The Relaxation Suite Posted October 1, 2009 Share Posted October 1, 2009 As I've pointed out elsewhere, there is no "classic" deflation because theres only ever been one example. if they government can't pay it's bills and has to cut back - this is a sign of inflation, not deflation. If I up the price in the shops of everything by 10% and you have to therefore buy 10% less stuff, that's not deflationary, is it? Why don't they just pay them with some of that printy printy? Quote Link to comment Share on other sites More sharing options...
Injin Posted October 1, 2009 Author Share Posted October 1, 2009 Why don't they just pay them with some of that printy printy? They are doing. It's state failure - they are cutting back on the states non essential functions and beefing up the core ones. that means less terachers and more armed goons. Quote Link to comment Share on other sites More sharing options...
the end is a bit nigher Posted October 1, 2009 Share Posted October 1, 2009 So we have raised taxes and now we are going to freeze pay and sell assets. That pays this year's bills but what about next. More tax and sell off what's left? Surely it doesn't take a genius to work out that at some point there is no more tax to take and nothing left to sell? Quote Link to comment Share on other sites More sharing options...
enrieb Posted October 1, 2009 Share Posted October 1, 2009 (edited) QE only causes inflation when it enters the real economy, in Zimbabwe cash was handed out as bribes to the "war veterans" (I shudder to label them so kindly). In Britain the QE is being held as capital reserves, the banks had been keeping the ratios too low and as failures increased they could not cover losses. With government contracts drying up and job losses the reserve ratios will be increased so no QE will be leaking into the real economy. No inflation. Is it possible that the government can find more creative ways to pump money directly into the economy? Sales of assets could include the sale of the remaining council houses to existing tenants at a huge discount. Obviously no bank or investor would lend money to fund this sort of scheme, but the government can. Through state ownership of the banks they could give loans out to existing council tenants at large discounts. The homes pass into private sector and the loans would increase the supply of credit. The loans are secured against the homes and when the new owners end up getting their properties repossessed, the government can then buy up empty city centre btl apartments to use as council accommodation. Another creative ways to pump money into the economy on a global scale is to start an arms race, instead of making consumer products people will make military equipment. Edited October 1, 2009 by enrieb Quote Link to comment Share on other sites More sharing options...
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