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Scary conspiracy theories and paranoia about hyperinflation abounds

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Comments

  • Reaper
    Reaper Posts: 7,356 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Reaper,

    What do you think happens to money supply when interest rates are cut....
    Current conditions are that nobody wants to lend, and for that matter meant people (and banks) are looking to reduce borrowing and increase savings for fear of what lies ahead. This reduced spending causes recession.

    One way of countering that is to reduce interest rates to encourage spending again, which I expect more of. The interest rate cuts by themselves are not inflationary in this setting - instead they prevent deflation.
  • Jonbvn
    Jonbvn Posts: 5,562 Forumite
    Part of the Furniture 1,000 Posts
    But remember that economists are about as reliable in forecasting as meteorologists.

    I think astrologists may be more apt!;)
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:
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