Jump to content
House Price Crash Forum
Sign in to follow this  
tomandlu

In Praise Of Inflation...

Recommended Posts

I'm not convinced that inflation (w/o wage inflation) is the best way to tackle our problems, but I'm far from convinced that it's the worst (and I say this as someone without debts and with savings).

  • We have been rewarding ourselves with too much for too little effort
  • This is only a viable option if we are, effectively, robbing other producers
  • Our demographics mean that we will have an aging population to support

In other words, if we want to maintain the same standard of living, we are going to have to work harder. We need to produce more and become more self-sufficient, all of which is helped by inflation. It does seem a rather stick-no-carrot approach, and the bit that really sticks in my craw is that significant minorities from different sectors of society seem determined to preserve their wealth to the detriment of the general population, but the logic seems inescapable.

Yes, it seems unfair on savers, but those savings were largely based on the same skewed economics that drove the rest of the system. And, yes, governments of all colours are going to need to learn that the job of government is to do what it must do, not what it can do (i.e. public sector spending needs to come down to a long-term supportable level).

What, IYHO, were the alternatives?

Share this post


Link to post
Share on other sites

I'm not convinced that inflation (w/o wage inflation) is the best way to tackle our problems, but I'm far from convinced that it's the worst (and I say this as someone without debts and with savings).

  • We have been rewarding ourselves with too much for too little effort

  • This is only a viable option if we are, effectively, robbing other producers

  • Our demographics mean that we will have an aging population to support

In other words, if we want to maintain the same standard of living, we are going to have to work harder. We need to produce more and become more self-sufficient, all of which is helped by inflation. It does seem a rather stick-no-carrot approach, and the bit that really sticks in my craw is that significant minorities from different sectors of society seem determined to preserve their wealth to the detriment of the general population, but the logic seems inescapable.

Yes, it seems unfair on savers, but those savings were largely based on the same skewed economics that drove the rest of the system. And, yes, governments of all colours are going to need to learn that the job of government is to do what it must do, not what it can do (i.e. public sector spending needs to come down to a long-term supportable level).

What, IYHO, were the alternatives?

You are Mervyn King and I claim my £5 (+ RPI)

Share this post


Link to post
Share on other sites

I'm not convinced that inflation (w/o wage inflation) is the best way to tackle our problems, but I'm far from convinced that it's the worst (and I say this as someone without debts and with savings).

  • We have been rewarding ourselves with too much for too little effort

  • This is only a viable option if we are, effectively, robbing other producers

  • Our demographics mean that we will have an aging population to support

In other words, if we want to maintain the same standard of living, we are going to have to work harder. We need to produce more and become more self-sufficient, all of which is helped by inflation. It does seem a rather stick-no-carrot approach, and the bit that really sticks in my craw is that significant minorities from different sectors of society seem determined to preserve their wealth to the detriment of the general population, but the logic seems inescapable.

Yes, it seems unfair on savers, but those savings were largely based on the same skewed economics that drove the rest of the system. And, yes, governments of all colours are going to need to learn that the job of government is to do what it must do, not what it can do (i.e. public sector spending needs to come down to a long-term supportable level).

What, IYHO, were the alternatives?

.

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

I'm not convinced that inflation (w/o wage inflation) is the best way to tackle our problems, but I'm far from convinced that it's the worst (and I say this as someone without debts and with savings).

  • We have been rewarding ourselves with too much for too little effort

  • This is only a viable option if we are, effectively, robbing other producers

  • Our demographics mean that we will have an aging population to support

In other words, if we want to maintain the same standard of living, we are going to have to work harder. We need to produce more and become more self-sufficient, all of which is helped by inflation. It does seem a rather stick-no-carrot approach, and the bit that really sticks in my craw is that significant minorities from different sectors of society seem determined to preserve their wealth to the detriment of the general population, but the logic seems inescapable.

Yes, it seems unfair on savers, but those savings were largely based on the same skewed economics that drove the rest of the system. And, yes, governments of all colours are going to need to learn that the job of government is to do what it must do, not what it can do (i.e. public sector spending needs to come down to a long-term supportable level).

What, IYHO, were the alternatives?

Printing money has never been the route to prosperity.

Edited by cheeznbreed

Share this post


Link to post
Share on other sites

There are very significant consequences from a cultural perspective. We are well on the way to being a banana republic where everyone is out for themselves, take what they can, don't pay their taxes etc etc. This will last for a much longer period than some short but serious recession.

The primary culprits for not paying taxes are multinational corporations. Until this is fixed there can be no cathartic 'traditional' recession (e.g. rising unemployment and rising real rates) that is socially tenable in the sense it can be justified as being in the greater good.

Its not obvious though that multinationals can be effectively taxed. Its too easy to game regulations put together piecemeal at national level.

Governments, and the peoples of the world are right in rejecting a deflation recession until this imbalance is removed. Ultimately, imbalances between this or that nations surplus or deficit will re-balance but the imbalance between real personal and corporation tax rates is the biggest threat to social cohesion, public finances and the financial system.

Share this post


Link to post
Share on other sites

The primary culprits for not paying taxes are multinational corporations. Until this is fixed there can be no cathartic 'traditional' recession (e.g. rising unemployment and rising real rates) that is socially tenable in the sense it can be justified as being in the greater good.

Its not obvious though that multinationals can be effectively taxed. Its too easy to game regulations put together piecemeal at national level.

Governments, and the peoples of the world are right in rejecting a deflation recession until this imbalance is removed. Ultimately, imbalances between this or that nations surplus or deficit will re-balance but the imbalance between real personal and corporation tax rates is the biggest threat to social cohesion, public finances and the financial system.

Tax is indeed the problem.

But the problem is not that some aren't paying, it's that some still are.

Share this post


Link to post
Share on other sites

Tax is indeed the problem.

But the problem is not that some aren't paying, it's that some still are.

not tax so much, as the overspending of tax revenues which A you dont have, and B, you expect to have and C unexpectedely dont get.

SO the International Corps dont pay much...why spend as if they did?

Share this post


Link to post
Share on other sites

In praise of inflation

So we're talking about like now, well over the written remit of 2%?

Oh all right then so it's back to the 70s and 80s and at the beginning inflation is nice stuff (TPTB says so) but just give it a few years and before long when the country has suffered even more economic devastation (is that possible now) through inflation we'll be hearing TPTB banging on about how inflation is really dreadful stuff indeed the very worst stuff and how it makes the UK uncompetitive blah blah blah and it has to be fought and sacrifices have to be made. Hey look at what the Weimar inflation did but if you want an example of how to fight inflation just look at how the Germans did it/do it now with their Bundesbank. Look we'll even give it to the BoE and they'll be just like the Bundesbank (some hope).

Then when inflation is finally getting pretty low we'll be hearing how oh inflation is really nice stuff indeed the very nicest stuff and how it has to be encouraged and praised ....................................................well you know the rest.

The very best of British luck with inflation because as they say, you'll need it.

Edited by billybong

Share this post


Link to post
Share on other sites

not tax so much, as the overspending of tax revenues which A you dont have, and B, you expect to have and C unexpectedely dont get.

SO the International Corps dont pay much...why spend as if they did?

But this is inevitable with a tax system of any sort.

No one wants to be mugged, the fastest and most rutheless avoid it, leaving the weigh tof payment on the slower and less agile.

Who usually also happen to be the ones doing all the work around here.

The load builds until those workers pack it in - "they pretend to pay us, we pretend to work."

Share this post


Link to post
Share on other sites

Depends how you position yourself. B)

Going from a luxury liner to a liferaft is no improvement, even if you look relatively better off to the drowning.

Share this post


Link to post
Share on other sites

Printing money has never been the route to prosperity.

But I'm not really talking about 'prosperity' - I'm talking about not expecting a life of relative wealth without the concomitant effort. I'm also not talking about hyper-inflation (although I accept that that might be the potential end-game if it all goes wrong).

Share this post


Link to post
Share on other sites

I include 'multinationals'. Skimming and scamming seems to be the way, hiding their profits. Run by psycopaths all with their hands in the till. I refer not just to individuals but the culture of those individuals who work for corporates. What can they get out of their employer. What do they need to do to customers to get what they can out of their employer?

That might be the case but if they were paying an equal load with individual scammers and lazybones then there would be much less of an issue. The multinationals are the most guilty party in this story, therefore I say that a non inflationary recession that doesn't fix that does no good at all.

Also, I hold that a non inflationary recession can't happen and is not an apparent system solution (in the mathematical sense) because the flipside of the multinational's escaping the yoke of national taxation is that they have no-one to vote for them and despite their various fixers, they will thus ultimately have their interests subordinated to that of various blocs of individual voters round the world. People don't vote for deflation, and turkeys don't vote for christmas.

There are IMO two possible solutions (e.g. outcomes, not designed policies), one in which the financial assets of big corporations are inflated away, led by the lowest common denominator monetary policy in the world, and one in which the structure of taxation shifts away from income and towards access to geographically fixed resources. Most likely we'll get the first, followed by the second. If we get the second, then that itself has implications for the structure of the state and implies to me a balkanisation of current state boundaries (basically a balkanisation of taxation boundaries). Interestingly tat also implies balkanisation of moneies as well.

This would be more than just deglobalisation, it would involve the emergence of more scale free network effects in states themselves. The whole scotland devolution thing is a good example.

As for finance being primarily national, I can't see how that can be effected without cutting the optic fibres, as Alan B'Stard put it.

Share this post


Link to post
Share on other sites

That might be the case but if they were paying an equal load with individual scammers and lazybones then there would be much less of an issue. The multinationals are the most guilty party in this story, therefore I say that a non inflationary recession that doesn't fix that does no good at all.

Also, I hold that a non inflationary recession can't happen and is not an apparent system solution (in the mathematical sense) because the flipside of the multinational's escaping the yoke of national taxation is that they have no-one to vote for them and despite their various fixers, they will thus ultimately have their interests subordinated to that of various blocs of individual voters round the world. People don't vote for deflation, and turkeys don't vote for christmas.

And voters don't vote for anyone who isn't already co-opted. (Currently. This will change in future I agree.)

There are IMO two possible solutions (e.g. outcomes, not designed policies), one in which the financial assets of big corporations are inflated away, led by the lowest common denominator monetary policy in the world, and one in which the structure of taxation shifts away from income and towards access to geographically fixed resources. Most likely we'll get the first, followed by the second. If we get the second, then that itself has implications for the structure of the state and implies to me a balkanisation of current state boundaries (basically a balkanisation of taxation boundaries). Interestingly tat also implies balkanisation of moneies as well.

When a fiat system dies, it's incredibly hard to get going again. Generally have to wait a hundreds year or so unt9l the stories have become folklore or are forgotten entirely. Given the states primarily feed themelves through fiat money and chartalism, they must shrink.

It's the same as cutting the nitrogen supply to a cancer. No food, no growth.

This would be more than just deglobalisation, it would involve the emergence of more scale free network effects in states themselves. The whole scotland devolution thing is a good example.

As for finance being primarily national, I can't see how that can be effected without cutting the optic fibres, as Alan B'Stard put it.

Revoking the legal tender laws (or changing them into a hard format such as PM's) would do it in a heartbeat.

The state is still getting sustenance from fiat atm, but when it doesn't ........

Share this post


Link to post
Share on other sites

When a fiat system dies, it's incredibly hard to get going again. Generally have to wait a hundreds year or so unt9l the stories have become folklore or are forgotten entirely. Given the states primarily feed themelves through fiat money and chartalism, they must shrink.

There isn't enough data to support your conclusions - its a classic case of undersampling.

You are just reciting folklore, which is ironic given your premise.

Revoking the legal tender laws (or changing them into a hard format such as PM's) would do it in a heartbeat.

Its a silly notion, because you can't send PMs down a wire.

The state is still getting sustenance from fiat atm, but when it doesn't ........

I think you have said before we are a long way off that point - in fact we may never reach it - what we are talking about here is the outcomes that manifest over the next few decades.

Share this post


Link to post
Share on other sites

There isn't enough data to support your conclusions - its a classic case of undersampling.

There are hundreds and thousands of them, fiat systems die every day.

You are just reciting folklore, which is ironic given your premise.

You just wish I was.

Its a silly notion, because you can't send PMs down a wire.

Exactly. :rolleyes:

All that "electronic capital" you are on about in underpinned by a law - that law can be (and will be) rescinded.

I think you have said before we are a long way off that point - in fact we may never reach it - what we are talking about here is the outcomes that manifest over the next few decades.

I'm talking about the next ten years, tops.

If that. The western states are all hanging on by a thread. The big one being the dollar.

Share this post


Link to post
Share on other sites

I'm talking about the next ten years, tops.

If that. The western states are all hanging on by a thread. The big one being the dollar.

You've changed you tune- now you are saying 'the end is nigh'. Don't go all Harold Camping on us!

Share this post


Link to post
Share on other sites

You've changed you tune- now you are saying 'the end is nigh'. Don't go all Harold Camping on us!

:)

I saw the bitcoins, and remembered "fiat money in france" where random non statists start to set up paper money systems of their own "backed by France!" or "backed by the word of soldiers" or whatnot....if we are rhyming and not repeating it gives an indication of timeline.....

Share this post


Link to post
Share on other sites

There are very significant consequences from a cultural perspective. We are well on the way to being a banana republic where everyone is out for themselves, take what they can, don't pay their taxes etc etc. This will last for a much longer period than some short but serious recession.

Some things are more important than near term gdp. Social cohesion, honesty and the low cost of business from a 'my word is my bond', the price-is-the-price attitude.

What do you mean well on our way? We're here already. For instance just look on ebay how much faulty and or misdescribed stuff there is. A couple of guys bough skydiving rigs which were advertised a certain condition. We opened up the canopy to have a look and it was a fake parachute! :o A couple of people have bought fake altimeters which when opened up contain NOTHING. I was asked to take one up the other day and the needle didn't move on the way up or down compared to my own alti. These are things which can and do kill people.

However my time is soon coming, soon my pets I will hunt you all on the crumbling wasteland of Britain. :P

Share this post


Link to post
Share on other sites

What do you mean well on our way? We're here already. For instance just look on ebay how much faulty and or misdescribed stuff there is. A couple of guys bough skydiving rigs which were advertised a certain condition. We opened up the canopy to have a look and it was a fake parachute! :o A couple of people have bought fake altimeters which when opened up contain NOTHING. I was asked to take one up the other day and the needle didn't move on the way up or down compared to my own alti. These are things which can and do kill people.

However my time is soon coming, soon my pets I will hunt you all on the crumbling wasteland of Britain. :P

Buying a skydiving rig of EBAY, haha classic

Share this post


Link to post
Share on other sites

What do you mean well on our way? We're here already. For instance just look on ebay how much faulty and or misdescribed stuff there is. A couple of guys bough skydiving rigs which were advertised a certain condition. We opened up the canopy to have a look and it was a fake parachute! :o A couple of people have bought fake altimeters which when opened up contain NOTHING. I was asked to take one up the other day and the needle didn't move on the way up or down compared to my own alti. These are things which can and do kill people.

However my time is soon coming, soon my pets I will hunt you all on the crumbling wasteland of Britain. :P

Fake sky is next.

Share this post


Link to post
Share on other sites

Buying a skydiving rig of EBAY, haha classic

Actually its not that simple. You buy with rigger certification only. In that what happens much of the time is that it is handed to a rigger who will check it over and sign his name to it. Then it gets sent to the person who buys it. The rigger takes a £30-£50 cut for his costs.

What has happening is that people are getting the rigger to sign it off. Then they covertly break the seals and stuff the inside with a junk canopy. Then close the seals again or cut and replastic weld it. In the meantime the seller vanishes.

Mine was bought via escrow from the rigger directly and he signed it off and kept it locked and it was exactly as described.

Before you jump you get your own advanced packer and rigger to open her up and take a look at it and get the reserve repacked and inspected. This is where we find bad stuff.

Share this post


Link to post
Share on other sites

What do you mean well on our way? We're here already. For instance just look on ebay how much faulty and or misdescribed stuff there is. A couple of guys bough skydiving rigs which were advertised a certain condition. We opened up the canopy to have a look and it was a fake parachute! :o A couple of people have bought fake altimeters which when opened up contain NOTHING. I was asked to take one up the other day and the needle didn't move on the way up or down compared to my own alti. These are things which can and do kill people.

However my time is soon coming, soon my pets I will hunt you all on the crumbling wasteland of Britain. :P

You must have been standing on the manufacturers label... if you opened that parachute out a bit further you'd have seen the words "made in China".

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.