Originally posted by AtW
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Originally posted by Old Greg View PostLook. If tomorrow, the price of bread falls by 90% and your income falls by 90% (assuming it's not already zero) and everything else stay the same, has bread got cheaper?
I can't see how your example is relevant anyway: price of bread gone up just like most of the food, petrol/diesel also, electricity, water supply ain't cheap (doubled in last 10 years).Comment
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Originally posted by AtW View PostNope, because bread is small part of my costs and loss of 90% income will make everything else not just more expensive but probably unaffordable.
I can't see how your example is relevant anyway: price of bread gone up just like most of the food, petrol/diesel also, electricity, water supply ain't cheap (doubled in last 10 years).Comment
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Originally posted by Old Greg View PostSo the price of bread has gone down 90% but it isn't cheaper?
You aren't going to win the argument by confusing yourself you know.While you're waiting, read the free novel we sent you. It's a Spanish story about a guy named 'Manual.'Comment
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Originally posted by Old Greg View PostSo the price of bread has gone down 90% but it isn't cheaper?Comment
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Originally posted by AtW View PostHow is this related to current situation when price of bread gone up by like 100%?
You see, bread has got cheaper but the ability to buy bread has not improved. Are you with me so far?Comment
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Actually, I just had an interesting thought. Let's say I have a £1000 debt over 1 year with a 15% APR. I'll need to pay £1150 to clear the debt yet the market value of that debt if sold would be substantially less than that because any valuation would take into account the "risk free" interest rate and risk of default. If the risk of default were judged to be particularly high the market value of the debt might even be less than the original principal.
Surely people ought to be able to buy their own debt at market prices?While you're waiting, read the free novel we sent you. It's a Spanish story about a guy named 'Manual.'Comment
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Originally posted by doodab View PostActually, I just had an interesting thought. Let's say I have a £1000 debt over 1 year with a 15% APR. I'll need to pay £1150 to clear the debt yet the market value of that debt if sold would be substantially less than that because any valuation would take into account the "risk free" interest rate and risk of default. If the risk of default were judged to be particularly high the market value of the debt might even be less than the original principal.
Surely people ought to be able to buy their own debt at market prices?Comment
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Originally posted by Old Greg View PostIt's an illustration of a concept. If you play along, we'll get there.
You see, bread has got cheaper but the ability to buy bread has not improved. Are you with me so far?
To put this into terms you can understand, if the price of bread remains the same and your wages have fallen 90%, has bread got cheaper?While you're waiting, read the free novel we sent you. It's a Spanish story about a guy named 'Manual.'Comment
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Originally posted by doodab View PostI get it. But I fail to see what that has to do with the relative cost of something that HASN'T actually gotten cheaper. The face value of debt remains unchanged, it doesn't fall.
To put this into terms you can understand, if the price of bread remains the same and your wages have fallen 90%, has bread got cheaper?
If everything except bread goes up 10 fold in price, and your wages remain the same:
1. Has bread got cheaper?
2. Has bread eroded in value?Comment
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