Could we be heading towards a Great Depression?

Scotbot

EdGasketTheSecond said:

I think the restrictions are to prevent the NHS being overloaded and bodies piling up at the crems.

Agreed, but if these objectives are not met then it's time to reassess. 

Malthusian

Scotbot said:

parcival said:

Could be a lot worse than an economic depression. Whilst at present the Government has the majority of the population onside, in a couple of months when thousands have lost jobs and many businesses have gone bust we could see major civil disobedience. Unless the measures in place start to work within a few months I think the mood of the nation will turn very ugly.

If in a couple of months the measures are not working there is no point in carrying on the restrictions is there? 

Great Scott man, you can't cancel corona restrictions just because they're pointless and ineffective, think of the children, don't you know there's a war on.

If you do X and nothing happens you have a choice - admit you were wrong, or say that more X is needed. The choice is always more X. If you cut interest rates and the economy refuses to magically turn around, cut them again. If you shut down the pubs and sports clubs and a contagious virus continues to spread, ban going out entirely. If you pump billions of public money into zombie enterprises and they remain unproductive, pump in more billions so they can fix whatever caused them to waste all the previous billions. If you sacrifice a goat and the rains refuse to come, burn more goats.

Scotbot

Malthusian said:

Great Scott man, you can't cancel corona restrictions just because they're pointless and ineffective, think of the children, don't you know there's a war on. If you do X and nothing happens you have a choice - admit you were wrong, or say that more X is needed. The choice is always more X. 

I apologise for being rational, I will work on it.

EdGasketTheSecond

The restrictions worked in China and Singapore

tropic_of_Username016

EdGasketTheSecond said:

The restrictions worked in China and Singapore

Hmmm, and now Ed is the poster who's being rational. Must admit, I didn't see that coming

EdGasketTheSecond

I think a rational person would see that creating trillions of dollars / billions of pounds effectively devalues the purchasing power of that currency. That logic seems to escape you.

tropic_of_Username016

EdGasketTheSecond said:

I think a rational person would see that creating trillions of dollars / billions of pounds effectively devalues the purchasing power of that currency. That logic seems to escape you.

... and we're back

What happened last time it was done? Lots of inflation? Not in goods and services. It did inflate asset prices. My first guess would be to expect similar effects this time.

The theory that the quantity of money, or velocity of money, or whatever, causes inflation might have some vague plausibility, if it hadn't been pretty comprehensively disproved by what's happened in the last decade. A better theory is that you get high inflation in goods and services when demand exceeds supply (i.e. exceeds the short-term capacity of the economy): the demand can't be fully met, so price rises are used to reduce demand (because some demand is price-sensitive). In a way, this is barely a theory at all: it's almost obvious.

What's happening to supply and demand now? A big drop in demand, as many people and businesses lose jobs/income, or just anticipate they will, and as people stay at home. Some drop in supply, due to some people being unable to work, which disrupts supply chains. IMHO, there is very likely to be a bigger drop in demand than in supply.

Lower interest rates and QE are pretty much completely irrelevant. They've had very little effect over the last 10 years anyway, and now they're even less relevant. Are people going to borrow to start new businesses because rates are a fraction of a point lower? In this situation? Of course not. And we don't even want them to "take risks" if that involves increasing social contact.

EdGasketTheSecond

LOL you are being robbed and you don't even realise it

coyrls

EdGasketTheSecond said:

LOL you are being robbed and you don't even realise it

Alternatively you could be wrong without realising it.

Thrugelmir

EdGasketTheSecond said:

The restrictions worked in China and Singapore

People had little choice other than to follow the restrictions though.