If Hyper Inflation arrives ........

lostinrates

bendix wrote: »

Hyperinflation, my a**e. .

a whole new interpretation of 'does my bum look big in this'.

How unfortunate for you

eamon

The whole thing is very scary. I'm of the school of thought that when times are hard the correct thing to do is reduce your expenditure and pay down your debts. Maybe my scale of economics doesn't work when scaled up many magnitudes. But I can't believe that printing more money will be part of the solution. It can't be that easy.

Really2

Rochdale_Pioneers wrote: »

Why are we even discussing this? We might as well be discussing what would happen if the world turned out to be flat

Well with recent thinking we have found out the world to be bannana shaped.

1echidna

Rochdale_Pioneers wrote: »

Why are we even discussing this? We might as well be discussing what would happen if the world turned out to be flat

The world isn't flat, discussing it would be of no interest. However the economic events unfolding seem to be going from worse to worse and although perhaps unlikely, hyperinflation has happened elsewhere and could happen here. Or do you subscribe to the Victorian notion that the UK is somehow superior to 'foreign' countries and could never be in such straights that printing money to keep the essential state apparatus in business would never be necessary?

ad9898_3

bendix wrote: »

Hyperinflation, my a**e. It isnt going to happen. Inflation will inevitably rise and interest rates will follow suit, but not to the levels people are getting hysterical here about.

10% perhaps. No more. It's hardly the end of the world.

I think the point you miss is the money, when it's finally rolled out, will expand in the economy, at what rate, could be at least 10x or more, this would be very inflationary, bordering on hyper. Nobody really knows how this is going to pan out, so to me, talk of hyperinflation and it's possible consequences is relevant.

sb44

Thanks folks for your info, I'm not as thick as I was before this thread now.

:rolleyes:

Noitice I say 'not as' rather than not.

Cannon_Fodder

Rochdale_Pioneers wrote: »

Why are we even discussing this? We might as well be discussing what would happen if the world turned out to be flat

Back when the world was thought to be flat, it was the Establishment in the shape of the Church that did not want to hear discussion on a subject that damaged their vested interests.


Today, with an economy suffering difficulties that no-one can confidently (some would say remotely) predict the outcome of, it is the Establishment in the shape of Politicians who are uncomfortable about discussion that damages their vested interests.


What does discussion hurt?

dopester

It isn't going to make any difference. The deflationary forces are just much too powerful.

And QE may even have the effect of increasing the power of the forces of contraction.

Manipulating numbers of the Fed's or the BoE's balance sheets isn't going to make any difference at all.

House prices in England are way way too high. BoE and our leaders will come to the point where they can continue QE to the point of destroying the entire economy, or having to accept that deflation is the much lesser evil.

kabayiri

I have a simple solution, which will prove the truth :-
ask Big Alistair and Flash to flog all their valuables, cash in their savings and pensions, and stick the money into a cash account in a UK bank which they won't touch for 5 years
(give them pocket money in the meantime)

If at the end of that time, their money is still worth a hill of beans, then Joe Public will triple it / nay quadruple it.

This will counterbalance the innate instinct of a politico for self preservation against the belief in their policies.

1echidna

dopester wrote: »

It isn't going to make any difference. The deflationary forces are just much too powerful.

And QE may even have the effect of increasing the power of the forces of contraction.

Manipulating numbers of the Fed's or the BoE's balance sheets isn't going to make any difference at all.

House prices in England are way way too high. BoE and our leaders will come to the point where they can continue QE to the point of destroying the entire economy, or having to accept that deflation is the much lesser evil.

Must admit I don't buy this idea that we are going to suffer from a prolonged period of deflation, except in the housing market where there is a bursting bubble and lack of mortgage finance. Other goods and services are usually supplied on small profit margins and with lower production the actual cost of production increases.