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'Millions face hardship' as government support ends


Warlord
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So how does it work, what happens to all the printed money? Surely increasing the money supply just devalues the existing money, unless it is taken back out of the system somehow. From what I've read in MMT the excess money has to clawed back through taxation.

The money is just replacing money that has been lost in the first place, not adding to it. If there was lots of money already in the system, there wouldn't be a problem, and there would be no need for intervention.

If everyone received free money on top of what money they already have or receive, this would be inflationary. The fact is, most people don't have much money to start with. Probably even less with job losses. And for those on furlough, they're no better off, apart from the fact they don't need to get up in a dark cold morning to get ready for work.

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For the record, people, house price inflation is, to the BoE at least, "good" inflation.

General good, services and salaries inflation less so. And would result in higher interest rates. This is a supply side recession. Ie supply of goods goes down compared to amount of money, prices of goods goes up. Price of oil goes up. Workers demand more money etc. Inflation goes up. Interest rates follow.

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Careful, you're talking common sense economics there (rather than the voodoo economics preached by @Dreamcasting)

 

There is no common sense in economics. The system just doesn't work the way you think it should. This is why pretty much every single prediction on this site since 2007 or even earlier has not only been wrong, but embarrassingly wrong.

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There is no common sense in economics. The system just doesn't work the way you think it should. This is why pretty much every single prediction on this site since 2007 or even earlier has not only been wrong, but embarrassingly wrong.

Oh here we go, getting a dig into those who don't want to take on a 300k debt 

Why do you post here? 

Edited by Warlord
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Just came back from ASDA and there was a long queue to get in @ 10 am. Reminded me of March and the previous lockdown. Great isnt it !

 

Its only going to get worse as from Thursday as many people will have nothing else to do - the daily trip to the supermarket being their only escape from their house if lucky or crowded flat. Lets at least hope for mild and dry weather - as queuing up for two hours in the hail and rain and wind outside Tesco or Asda isn't going to be much fun and may just make people ill leading to more pressure on the NHS! Shutting 'non essential' shops and libraries where people wear masks and can better distance than in small food stores may prove counter productive - people need outlets. Bars and restaurants fine.

And how will we ensure the elderly get food too - not everyone has family nearby - if they end up weak they are more likely to get ill, dizzy spells and have falls so end up in hospital and worse.

I really do worry about it all - lockdown in April and May when its daylight until after 8pm and the weather isn't too bad so people can go for walks outside and shop late into the evening is one thing but in November and December it literally is going to kill people!

 

My suggestion

relocate SAGE and the Cabinet to live on a grim council estate in a flat with no outside space and noisy neighbours and criminal activity/anti social behaviour going on outside their window for November. They can be driven into the office each day but must return home to sleep in said flat from 9pm to 7am on curfew. No mansions or posh central London flats or leafy detacheds - let them experience the reality of lockdown for millions!

Edited by MARTINX9
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Oh here we go, getting a dig into those who don't want to take on a 300k debt 

Why do you post here? 

Why do you post here?

I'm not digging into anyone. I'm just reflecting on comments made on this site since circa 2005 (that is 15 years ago) and comparing with what really has happened in the real world since. Rightly or wrongly, many people have made a lot of money in 15 years by taking on a 300k debt. That debt is no longer debt.

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Why do you post here?

I'm not digging into anyone. I'm just reflecting on comments made on this site since circa 2005 (that is 15 years ago) and comparing with what really has happened in the real world since. Rightly or wrongly, many people have made a lot of money in 15 years by taking on a 300k debt. That debt is no longer debt.

Everyone here is in different situation ,you can't generalise.  You're just trolling.... 

 

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For the record, people, house price inflation is, to the BoE at least, "good" inflation.

General good, services and salaries inflation less so. And would result in higher interest rates. This is a supply side recession. Ie supply of goods goes down compared to amount of money, prices of goods goes up. Price of oil goes up. Workers demand more money etc. Inflation goes up. Interest rates follow.

I disagree the economy is suffering more of a demand shock than a supply shock. Oil is at fairly low levels and we could even be past peak oil now so the effect on the economy form oil is much reduced. The demand for goods and services is lower as people are in such a precarious situation.

The inflation rate is kind of meaningless as it affects different people in different ways, I.e. if you're renting inflation will be high, if you're a homeowner you could in theory be in deflation especially if your mortgage payments are reducing each month.

The problem with the economy is the lack of decent paying jobs and also the concentration of wealth to London and the South East. Its not easy to address and fix these issues in a 5 year term but the political elite are aware, just look at Theresa May talking about jams (just about managing) in 2017.

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Its only going to get worse as from Thursday as many people will have nothing else to do - the daily trip to the supermarket being their only escape from their house if lucky or crowded flat. Lets at least hope for mild and dry weather - as queuing up for two hours in the hail and rain and wind outside Tesco or Asda isn't going to be much fun and may just make people ill leading to more pressure on the NHS! Shutting 'non essential' shops and libraries where people wear masks and can better distance than in small food stores may prove counter productive - people need outlets. Bars and restaurants fine.

And how will we ensure the elderly get food too - not everyone has family nearby - if they end up weak they are more likely to get ill, dizzy spells and have falls so end up in hospital and worse.

I really do worry about it all - lockdown in April and May when its daylight until after 8pm and the weather isn't too bad so people can go for walks outside and shop late into the evening is one thing but in November and December it literally is going to kill people!

There will be more anxiety and depression about. Charities such as Samaritans will be looking for volunteers....helping others is one way to help ourselves....just giving someone a call might make their day....many were helping to deliver food to those fearful or unable to leave home....might be an opportunity to learn, to make and create...;)

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I disagree the economy is suffering more of a demand shock than a supply shock.

It depends if you think covid will hasten medium term deglobalisation or not

 

 

 

The demand for goods and services is lower as people are in such a precarious situation.

So that's why supermarket shelves are empty and people are bidding up the value of houses?

 

The inflation rate is kind of meaningless as it affects different people in different ways, I.e. if you're renting inflation will be high, if you're a homeowner you could in theory be in deflation especially if your mortgage payments are reducing each month.

Err. They have measures for inflation. It impacts industry and stuff. Really.

 

The problem with the economy is the lack of decent paying jobs and also the concentration of wealth to London and the South East.

So inflation is an issue now?

 

 

.

Edited by Si1
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. if you're renting inflation will be high, 

If your renting rents are falling fast. 

 

Ive personally had no nominal tebt increases in 6 years. 

When the £ goes, intetrst rates could top 10% then all those fix rate debt owners will know what inflation really is

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It depends if you think covid will hasten medium term deglobalisation or not

 

.

Pilot friend of mine who thought his job was safe is now hearing that it's not on account of international flights being crippled for the foreseeable. 

He was pretty confident, now looks shattered. 

Wife just been put on furlough. 

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Pilot friend of mine who thought his job was safe is now hearing that it's not on account of international flights being crippled for the foreseeable. 

He was pretty confident, now looks shattered. 

Wife just been put on furlough. 

That's only a problem depending on his other financial commitments. Apparently commercial driver operators are very happy to employ unemployed pilots because they have all the technical and organisational aptitudes.

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One day we will wake up and the £ will TANK. The BoE will be forced to defend it with higher IR's

This will happen Just a matter of time.

 

That time is drawing near. 

 

Anyone else think the timing of this lockdown/furlough extension is very convenient/well timed?

 

 

They've been talking up the virus for 8 weeks while less people than normal are dying. 

They are up to something 

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That time is drawing near. 

 

Anyone else think the timing of this lockdown/furlough extension is very convenient/well timed?

 

 

They've been talking up the virus for 8 weeks while less people than normal are dying. 

They are up to something 

No one can give exact timings...  and if you do you get the trolls saying "I told you so" when it doesn't happen i.e @Dreamcasting

But they can't keep doing this forever without consequence.  Sooner or later the markets will get wise to it or the debt and printing so overwhelming that a crisis will not be far away.

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The pound has already tanked, no? 

ISTM going to America when the exchange rate was 2.0+

I don't believe the pound will tank, not least because most other fiat currencies will be doing the same. Thus the net effect on exchange rates will be small.

You ain't seen nothing yet.  When the next crisis materialises (and it will) you will know about it put it that way. 

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No one can give exact timings...  and if you do you get the trolls saying "I told you so" when it doesn't happen i.e @Dreamcasting

But they can't keep doing this forever without consequence.  Sooner or later the markets will get wise to it or the debt and printing so overwhelming that a crisis will not be far away.

The market got wise to it in 2005...look at the gold price then and now

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You ain't seen nothing yet.  When the next crisis materialises (and it will) you will know about it put it that way. 

The next?

 

I've said all along we never left the one that sysrted6in 2007.

 

There used to be a picture doing the rounds that showed newspaper headlines from the depression. 

 

It wasn't till they were out of it they called it the depression. 

 

The last headline wasbone admitting things wouldn't get better. 

 

Hope for the best, prepare for the worst 

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Re supermarkets, over last few months, there have been shortages of certain food items on shelves....very often no stock in certain items...having trouble getting them, more of it to come, will just have to adapt and not expect getting everything have been used to getting all of the time.;)

Cooking is the art of negotiation between the supermarket and the stomach.  No lamb in stock, then use pork or chicken.  Sadly lots of people do not value food or do not have the skills to cook a meal.  I note that very many people in the check-out queue have trolleys crammed with ready meals that are expensive and poor nutritional value.

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I meant the supply side of the general economy not houses. A shortfall in that area would push up inflation and nominal interest rates.

Got it, but to my little theory the lower rates enable greater supply. Indeed certain industries do not have real supply constraints (software, media) since the marginal cost of production is nil.

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