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There's much talk on here about the general economy being screwed in some way or another, either in an inflationary way or a deflationary way. Personally I see the arguement for there being inflation ahead and have hedged my bets in that direction (although I also believe there will be a severe correction in house prices to come as well).

What I want to know is who gains from the deflationary scenario? in who's interest is deflation? Clearly it is not in any gov's interest if they have huge debts. It's not in the banks interest because it is difficult for them to make money in that envoronment, so, who's interest is it in? Why wouldn't govs run the presses to stop this situation?

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There's much talk on here about the general economy being screwed in some way or another, either in an inflationary way or a deflationary way. Personally I see the arguement for there being inflation ahead and have hedged my bets in that direction (although I also believe there will be a severe correction in house prices to come as well).

What I want to know is who gains from the deflationary scenario? in who's interest is deflation? Clearly it is not in any gov's interest if they have huge debts. It's not in the banks interest because it is difficult for them to make money in that envoronment, so, who's interest is it in? Why wouldn't govs run the presses to stop this situation?

Any body with cash.

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Yep, but it's hard to imagine cash holders on the whole have the influence to manipulate the system either way. Clearly banks and government do, they are major vested interests with power, why would they want deflation?

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God, the answer is that everybody gains! Propping up the bubble just makes things the future bust worse and will hurt the banks and governments more than anyone (even if they don't know it, but look at Greece!). Deflation means pain for non-savers but eventually a balanced economy that benefits everyone.

Other answer to your question - what makes you thinks bankers/governments will have any choice about deflation?

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Yep, but it's hard to imagine cash holders on the whole have the influence to manipulate the system either way. Clearly banks and government do, they are major vested interests with power, why would they want deflation?

Inflating debt away only stood a chance in an environment where there is a sustainable; ability and willingness of consumers and businesses to take on debt, support asset prices rises, where government spending is carefully controlled and the interest on accumulated debt is not onerous.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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