The left-field threat to Europe ...

[Old Greg]

Look: all other things being equal, inflation erodes debt.

If there are additional factors such as:

- Nobody having a job anymore
- Real-term incomes falling

then the ability to service debt is reduced. But the debt is still eroded by inflation because in real terms it is worth less. It just doesn't help those with debts.

[sasguru]

FFS we're talking macro-economics and fiscal and monetary policy here, not how Mr. Bloggs is going to pay his mortgage.
Personally I think fook Mr. Bloggs for borrowing too much.

You idiots need to do some reading of economic history before exposing your ignorance on here.
Inflation is the UK's official government policy, behind the scenes,, as has happened before.

Go and do your own fooking research and education, I don't have time to drum it into your thick bonces.

[doodab]

I'll try to be succint: since debt is fixed in nominal terms, inflation erodes its real value.

If your measure of inflation is negative then the debt increases in value. For many people this is the case with the value of their debt compared to their wages, which is more relevant to most people than the RPI as credit card companies generally don't accept "baskets of goods" as payment. If they did, we could post them all the left over Christmas food in a hamper.

[AtW]

But the debt is still eroded by inflation

When food prices double in a space of a few years why should that somehow erode credit card debts or mortgages?

Debt is only eroded is there is more money - increased purchasing ability via higher salaries OR drop in currency so local assets become cheaper to foreigners who hold real currencies.

Inflation in UK right now just erodes living standards and makes debt even more expensive because people have to use "payday" companies that advertise 2100% APR on TVs.

[AtW]

Personally I think fook Mr. Bloggs for borrowing too much.

In this case why BoE keeps rates at 0.5%?

[sasguru]

When people like sasguru get to run the countries it is no suprise then run them into the ground..

You want to see a country run into the ground? Go to to Greece, Portugal or Spain.

HTH, BIDI because you're a first rate idiot.

[BigTime]

... I don't have time to drum it into your thick bonces.

Why do you keep posting then?

[sasguru]

In this case why BoE keeps rates at 0.5%?

Now I know for sure you're a moron.


I'm not wasting my time here any more, my 2 year old shows more understanding of logical thought and intelligence than you.

[Mich the Tester]

Countries get run into the ground when politicians pander to their own section of the electorate by spending more money than the taxpayer can raise on projects and schemes that get them re-elected. Things like massive growth of the public sector. Structural government deficit also undermines democracy because it shifts the costs onto a future generation who haven't been able to vote on taking on the costs of borrowing of earlier governments.

[doodab]

When food prices double in a space of a few years why should that somehow erode credit card debts or mortgages?

It erodes the value of the debt when measured in food. So sasguru is right as long as we make sandwiches the fundamental unit of value measurement.