What happens if our country goes Bankrupt?

itsallagame_2

jennieharris wrote: »

Could we lose all our savings if England went bankrupt?

Don’t suppose all savings would be lost as Gov have promised to guarantee all savings.
But that would be poor consolation if they decided to inflate the debt till it’s gone.
Briefly meaning, yes, your savings are intact, but only worth 10% in real terms.
Lots of scenarios could end with this result.

With All this talk of printing money, we may be on to their little game but nothing we can do.

Sad, but could well happen.
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caveman38

itsallagame wrote: »

Don’t suppose all savings would be lost as Gov have promised to guarantee all savings.
But that would be poor consolation if they decided to inflate the debt till it’s gone.
Briefly meaning, yes, your savings are intact, but only worth 10% in real terms.
Lots of scenarios could end with this result.

With All this talk of printing money, we may be on to their little game but nothing we can do.

Sad, but could well happen.

What do you mean inflate the debt?

Trust_2

so we have trillions of pounds of debt,

Who do we owe that to?

It seems that every country in the world has debt.

Why not print more money?

mikey72

Trust wrote: »

so we have trillions of pounds of debt,

Who do we owe that to?

It seems that every country in the world has debt.

Why not print more money?

I think it's either Tesco's or Richard Branson

Generali

Trust wrote: »

so we have trillions of pounds of debt,

Who do we owe that to?

It seems that every country in the world has debt.

Why not print more money?

There's nothing to stop the Government ordering the Bank of England to print more money (it's not done literally usually, it's more a figure of speech). However, if you do the new money 'printed' just makes each existing bank note worth a little less. If you print a load of money to pay off a load of debt then you're asking owners of debt to accept money that is worth a lot less than that which they lent. They probably won't lend that Government money again.

The problem with 'external debt', that is money owed in foreign currency and to foreigners is that the UK Government can't print Euros/US Dollars etc.

WTF?_2

Generali wrote: »

There's nothing to stop the Government ordering the Bank of England to print more money (it's not done literally usually, it's more a figure of speech). However, if you do the new money 'printed' just makes each existing bank note worth a little less. If you print a load of money to pay off a load of debt then you're asking owners of debt to accept money that is worth a lot less than that which they lent. They probably won't lend that Government money again.

The problem with 'external debt', that is money owed in foreign currency and to foreigners is that the UK Government can't print Euros/US Dollars etc.

Money printing is good old fashioned wealth redistribution with a twist - this time, from the prudent to the f.eckless.

It's just the sort of policy that Gordon and his cohorts love. They'll control the banks and they'll control the printing of money. Just imagine all the good work they'll be able to do as they print up cash to support their pet projects to improve our lives in accordance with their principles, whether we want it or not. :rolleyes:

Trust_2

so sorry for the repeat statement

who do we owe the debt to?

And if for argument sake we print more £20 notes, they will still be worth £20

(Tesco or Richard Branson push to one side.)

Generali

Trust wrote: »

so sorry for the repeat statement

who do we owe the debt to?

And if for argument sake we print more £20 notes, they will still be worth £20

(Tesco or Richard Branson push to one side.)

To UK citizens, businesses and banks and to foreign citizens, businesses and banks.

If we print loads more £20 notes, they will be worth £20 but that's just tautology. What they will buy will fall in value.

Trust_2

interesting logic,

So the government owes money to banks and is spending the said money on bailing out the banks, smells of double accounting to me!

So if the government wants to spend another £100 billion apart from the BOE who do they ask

WTF?_2

Trust wrote: »

so we have trillions of pounds of debt,

Who do we owe that to?

It seems that every country in the world has debt.

Why not print more money?

Think of your money as a certificate entitling you to a share of pie.

Initially there are 100 certs issued. You get 10 by working hard in return for them, therefore you own 10% (10/100) of the pie should you decide to redeem i.e. spend them.

Now the people who sold you the certificates in return for your work decide to print 100 more. You still have your 10 certificates but now when you go to redeem them you get 10/200 or 5% of the pie.

If you still want 10% of the pie, you need twice as many certificates.

Ergo the value of your existing money has been inflated away by money printing.

Every pound the government prints out of thin air makes your pound worth a bit less. That could be a pound that you are earning - in which case you'll be wanting higher wages, or a pound from your savings in which case you'll be wanting higher interest rates.

Thanks to globalisation you'll find it hard to get more wages and the government has consistently set interest rates too low and shows no sign of doing otherwise in the future. The net effect is that most people will become poorer.