[Merged]Brexit stuff

[diseasex]

Explain your reason why you think that is bad.

Why deflation and more saving is bad for economy ? Is that genuine question or mock again ?

[Old Greg]

Why deflation and more saving is bad for economy ? Is that genuine question or mock again ?

The deflation will cancel out the inflation caused by a readjustment of Sterling. So it's all great!

[WTFH]

He's just being a moany Bremainer. This is great news as it will deal with the private debt crisis ad we will live within our means.

What? Live within your means? Reduce your private debt? That's Komunism!
We must spend spend spend and borrow borrow borrow.
If we don't spend, other people will have shinier new junk than us
If we don't borrow, other people will think we are too poor to be lent money.
If we save we'll have money set aside for the future, when we should always gamble that money.

Shut up with your stupid lefty liberal hand wringing moaning etc ideas.

[WTFH]

Brexit's positive impact to rebalance the economy

Why deflation and more saving is bad for economy ? Is that genuine question or mock again ?

In your original post and in both my replies the word "economy" did not appear.


I asked a genuine question. Why do you think spending less and saving more is bad?

[Old Greg]

I asked a genuine question. Why do you think deflation and saving is bad?

It may depress domestic demand somewhat, but that means we'll import less and have more goods to export!

[diseasex]

What? Live within your means? Reduce your private debt? That's Komunism!
We must spend spend spend and borrow borrow borrow.
If we don't spend, other people will have shinier new junk than us
If we don't borrow, other people will think we are too poor to be lent money.
If we save we'll have money set aside for the future, when we should always gamble that money.

Shut up with your stupid lefty liberal hand wringing moaning etc ideas.

If we save we'll have money set aside for the future, when we should always gamble that money.

Ok sorry, I know you're admin but what you write is totally IGNORANT

First of all : money spent = more profits = inflation raising (low inflation is HEALTHY)
money saved = no money spent = no profits = possible deflation
and why deflation is bad? I recommend this read:
Why is Deflation Bad for the Economy? | Investopedia

One might think that a general decrease in prices is a good thing because it gives consumers greater purchasing power. To some degree, moderate drops in certain products, such as food or energy, do have some positive effect on consumer spending. A general, persistent fall in prices, however, can have severe negative effects on growth and economic stability.

.....

At this point, people's expectations about future inflation are lowered and they begin to hoard money. Why would you spend a dollar today when the expectation is that it could buy effectively more stuff tomorrow? And why spend tomorrow when things may be even cheaper in a week's time? (See also: What impact does inflation and deflation have on a blue-chip stock value?)

Deflation's Vicious Cycle
As production slows down to accommodate the lower demand, companies reduce their workforce, increasing unemployment. These unemployed individuals may have a hard time finding new work during a recession and will may deplete their savings in order to make ends meet, eventually defaulting on various debt obligations such as mortgages, car loans, student loans and credit cards.
The accumulating bad debts ripple through the economy up to the financial sector that must write them off as losses. As banks' balance sheets become shakier, depositors seek to withdraw their funds as cash in case the bank fails.

A bank run may ensue, whereby too many deposits are redeemed and the bank can no longer meet its own obligations. Financial institutions begin to collapse, removing much needed liquidity from the system and also reducing the supply of credit to those seeking new loans.

Central banks often react by enacting a loose, or expansionary, monetary policy. This includes lowering the interest rate target and pumping money into the economy through open market operations – buying treasury securities in the open market in return for newly created money.

Low inflation or deflation constrains this crucial variable. The nominal interest rate cannot fall below zero, because that would mean reducing savers’ bank balances every month, and would prompt them to withdraw their deposits from banks and stash cash under the bed. Together with inflation, this puts a floor on the real interest rate too. If inflation is low and real rates can’t fall far enough to boost demand and perk up prices, demand will weaken still further. This is the dreaded deflation trap. There are other problems, too. Lower-than-expected inflation increases the real burden of debts. Lenders benefit, but because they are more likely to save than borrowers, demand is sapped overall. Deflation also increases rigidity in the labour market. Workers are resistant to wage cuts in cash terms, but inflation lets firms cut real wages by freezing pay in nominal terms. Deflation, by contrast, makes this problem worse.

Long story short, deflation is pretty bad. Also Japan struggles (struggled?) with deflation for few decades and can't get out

[Old Greg]

Ok sorry, I know you're admin but what you write is totally IGNORANT

The OP is a humble mod so just mostly ignorant. Admin will be along later once his mum has dressed him.

[LondonManc]

https://www.theguardian.com/business...er-brexit-vote

Ignore the negative Bremaining tone of the article - we all need to pull together now!



This is actually great news as it means individuals will be paying down debt and saving money, rather than foolishly spending it in the economy. Hurrah for Brexit!

What an irrelevant survey. If they've done it in London it'll be full of bad losers expecting the end of the world.

[Old Greg]

What an irrelevant survey. If they've done it in London it'll be full of bad losers expecting the end of the world.

Exactly the kind of positive attitude we need! Well done!! The survey is all nonsense anyway and even if it isn't it's actually great news.

Dig for victory!

Edit: Some Bremainer has hacked the wiki site on the US version, trying to make out that such survey have significance. The fiends!

Manufacturers, retailers, banks and the government monitor changes in the CCI in order to factor in the data in their decision-making processes. While index changes of less than 5% are often dismissed as inconsequential, moves of 5% or more often indicate a change in the direction of the economy.

A month-on-month decreasing trend suggests consumers have a negative outlook on their ability to secure and retain good jobs. Thus, manufacturers may expect consumers to avoid retail purchases, particularly large-ticket items that require financing. Manufacturers may pare down inventories to reduce overhead and/or delay investing in new projects and facilities. Likewise, banks can anticipate a decrease in lending activity, mortgage applications and credit card use. When faced with a down-trending index, the government has a variety of options, such as issuing a tax rebate or taking other fiscal or monetary action to stimulate the economy.

Conversely, a rising trend in consumer confidence indicates improvements in consumer buying patterns. Manufacturers can increase production and hiring. Banks can expect increased demand for credit. Builders can prepare for a rise in home construction and government can anticipate improved tax revenues based on the increase in consumer spending.

https://en.wikipedia.org/wiki/Consumer_confidence_index

[WTFH]

Ok sorry, I know you're admin but what you write is totally IGNORANT

First of all : money spent = more profits = inflation raising (low inflation is HEALTHY)
money saved = no money spent = no profits = possible deflation
and why deflation is bad? I recommend this read:
Why is Deflation Bad for the Economy? | Investopedia




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Long story short, deflation is pretty bad. Also Japan struggles (struggled?) with deflation for few decades and can't get out

Sorry for being "ignorant", but you seem to confuse personal with country/global.

Explain on a personal level how being massively in debt and having little saving is good for you?

Borrow when it is necessary, save when you can. Show fiscal responsibility not only for yourself but for those who rely on you.