Interest rates to stay below 1% for 5 years?

Generali

kennyboy66 wrote: »

A pretty risk strategy I would say - the only real benefit would be if you could increase wages and benefits by less than inflation so that effectively there were real public sector and benefit cuts.

I agree with your post entirely.

The thing is, if the above happens IMO then that will have exactly the same impact as deflation in that it makes it harder to repay the debt which then knocks on to the banks' ability to lend which means companies can't invest which means they won't employ which means wages fall which means debt isn't repaid....

I'm sure you get the picture.

So what is to be done..?

It really is a toughie. IMO the move from the current position to 'normality' will either show the part of Keynsianism that The Left chooses to ignore to be correct or it will show that pretty much all of macro economics is wrong.

Either way I'll find it jolly interesting and as I can't get too much poorer I guess it's my version of a roller coaster.