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Is to encourage inflation. The Germans did it in the 1920s to pay off their reparations (which were denominated in Marks). 1970s. Mugabe.

There is no doubt that the Western economies are deeply indebted. A good spot of hyperinflation would solve all that.

It would also solve the huge debts that many consumers have on their credit cards and mortgages.

The only people whom it would stuff would be those sitting on a pile of cash, waiting to pile into property.

The more I read on here, the more scared I become, but no way am I selling up to put cash in banks that are going to default, or to have its value diminished by inflation.

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Is to encourage inflation. The Germans did it in the 1920s to pay off their reparations (which were denominated in Marks). 1970s. Mugabe.

There is no doubt that the Western economies are deeply indebted. A good spot of hyperinflation would solve all that.

It would also solve the huge debts that many consumers have on their credit cards and mortgages.

The only people whom it would stuff would be those sitting on a pile of cash, waiting to pile into property.

The more I read on here, the more scared I become, but no way am I selling up to put cash in banks that are going to default, or to have its value diminished by inflation.

Wrong, it stuffs everybody. When a loaf of bread costs £50 and your wages aren't going up what are you going to pay for first? Your credit card bill? Your mortgage? Food for your kids?

When your employer goes bust because they can't pay the bills, you lose your job - how are you going to pay for anything then?

Pray to whatever deity you like that we do not get hyperinflation.

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Do you think the banks will be happy to lose all that money through inflation? Or will they perhaps put their interest rates up massively to compensate, putting even more pressure on mortgage owners?

Clue: their business is making money. They're generally pretty good at it.

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This looks like it will affect all the western economies, unlike the German situation that affected mainly Germany in the 1920's. If things get so bad that governments have to do the deals instead of banks, they'll come to some agreement before hyperinflation takes hold.

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Guest X-QUORK
Clue: their business is making money. They're generally pretty good at it.

I'm sorry, but that has to be quote of the day.

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Guest Skint Academic
Is to encourage inflation. The Germans did it in the 1920s to pay off their reparations (which were denominated in Marks). 1970s. Mugabe.

There is no doubt that the Western economies are deeply indebted. A good spot of hyperinflation would solve all that.

No government deliberately opt for hyperinflation as that would mean that you are committing financial and political suicide. Once you get hyperinflation the only way to stop it is to do something drastic that tells the population and foreign investors that it is over. This normally requires bringing out a new currency that is bound to some underlying value, such as gold. But governments do try to inflate their way out of problems when they have no other choice. This means effectively walking a tightrope between inflation and deflation where they can fall off on either side.

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I'm sorry, but that has to be quote of the day.

'Generally' being the operative word. Even now, most of them have reported reduced profits, not actual outright losses. Not to mention the money made by the individual bankers.

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Hyperinflation= starvation.

I could do with an enforced diet actually.

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15% per annum over 5 years would neatly halve the value of all debt (and cash!), without forcing too many people to starve.

There's your precious 50% off house prices so much wanted here, in CHF terms, without any movement needed in STG terms. But anybody who STR is just as stuffed as before.

And yes, interest rates might go up, but interest rates are generally about the same as inflation, and then you lose 40% to the taxman.

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15% per annum over 5 years would neatly halve the value of all debt (and cash!), without forcing too many people to starve.

There's your precious 50% off house prices so much wanted here, in CHF terms, without any movement needed in STG terms. But anybody who STR is just as stuffed as before.

And yes, interest rates might go up, but interest rates are generally about the same as inflation, and then you lose 40% to the taxman.

I think it's a bit more difficult than just saying "ok 15% inflation, hit it Merv" somehow.

It's got this nasty habit of spiralling into oblivion unless interest rates are raised even higher...which will kill pretty much everyone with a mortgage anyway.

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15% per annum over 5 years would neatly halve the value of all debt (and cash!), without forcing too many people to starve.

There's your precious 50% off house prices so much wanted here, in CHF terms, without any movement needed in STG terms. But anybody who STR is just as stuffed as before.

And yes, interest rates might go up, but interest rates are generally about the same as inflation, and then you lose 40% to the taxman.

What? You mean that we are going to get 15% wage inflation for 5 years? what is that going to do for price inflation? :lol:

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how many more bank collapses does there need to be until we realise no this generation of bankers are NOT good at making money. we haven't even started the downturn.

err some Western countries out there still have trade and budget surpluses. this is UK and US looking into the gates of hell.

The pound and dollar are steaming dog turds. what are these people watching who contest this? KABOOM!!!!

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15% per annum over 5 years would neatly halve the value of all debt (and cash!), without forcing too many people to starve.

There's your precious 50% off house prices so much wanted here, in CHF terms, without any movement needed in STG terms. But anybody who STR is just as stuffed as before.

And yes, interest rates might go up, but interest rates are generally about the same as inflation, and then you lose 40% to the taxman.

15% is not hyperinflation. Its whats happening to food now.

Wages are at 2-4%

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Guest An Bearin Bui
Is to encourage inflation. The Germans did it in the 1920s to pay off their reparations (which were denominated in Marks). 1970s. Mugabe.

There is no doubt that the Western economies are deeply indebted. A good spot of hyperinflation would solve all that.

It would also solve the huge debts that many consumers have on their credit cards and mortgages.

The only people whom it would stuff would be those sitting on a pile of cash, waiting to pile into property.

The more I read on here, the more scared I become, but no way am I selling up to put cash in banks that are going to default, or to have its value diminished by inflation.

That's not what the Germans did in the 1920s - most of their war debt was denominated in foreign currency and they desperately needed foreign currency reserves to pay off their debts, which they could only earn through exports*. Their economy got caught in a spiral of churning out exports at a rate of knots to just keep their heads above water but at the same time as their national debt grew, their currency became worthless so they needed more exports etc - it's the same trap many developing countries were caught in after the debt frenzy of the 1970s where dictators got access to cheap capital on world markets for various hare-brained schemes and left the average worker to foot the bill once they were voted out / executed / exiled e.g. the Phillipines after the excesses of the Marcos regime. The eventual end of all such debt spirals is default which of course plunges the country even further in the direction of junk status and toilet paper currency e.g. Argentina after its debt crisis.

Devaluing your currency through inflation to pay off debts only works if your debt is denominated in your own currency e.g. the USA so while it might be an option for Bernanke et al, it's not that relevant for most countries.

* Adam Tooze in his book the Wages of Destruction gives a good run down of the pickle the Germans were in and how this lead to the Nazi drive for mobilisation - basically weapons manufacturing became the only engine of the economy so mobilisation was a case of economic necessity rather than desire. Interesting thesis....

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Quite. We can (mostly) all remember 15% inflation

http://www.whatsthecost.com/historic.cpi.aspx

I admit, not hyperinflation in its strictest sense (defined as 50% per annum), but hyperinflation in the loose sense of the word.

Amusing to read wikipedia on hyperinflation:

Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

Outright lying as to official statistics such as money supply, inflation or reserves...

Adjusting the components of the Consumer Price Index, to remove those items whose prices are rising the fastest.

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Guest Skint Academic
15% is not hyperinflation. Its whats happening to food now.

Indeed. Hyperinflation is when you have to get paid twice a day and are allowed out at lunchtime to buy the food for the day as otherwise your daily wages are worthless if you leave it any longer.

No government chooses that, instead they play with fire and end up with it.

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I admit, not hyperinflation in its strictest sense (defined as 50% per annum), but hyperinflation in the loose sense of the word.

Hmm, still puts your argument to bed though.

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  • 298 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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