Gordon secretly loves inflation

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wendigo100 replied

23 March 2007, 12:02
Originally posted by NoddY

Only wage inflation erodes debt. The worse case scenario is when the cost of living rises without a comparable rise in wages.

True. The two used to go together in the UK, but now, who knows!
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NoddY replied

23 March 2007, 11:23
Originally posted by wendigo100

Inflation also had the opposite effect (the reverse of a tax) - it used to erode one's mortgage, the biggest purchase of many people's lives.

Only wage inflation erodes debt. The worse case scenario is when the cost of living rises without a comparable rise in wages.
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Bagpuss replied

23 March 2007, 09:41
Money has been too cheap for far too long. Realistically interest rates should be 8-10% by now
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bobhope replied

23 March 2007, 09:18
Originally posted by milanbenes

not a lot of people know what I am about to tell you,

inflation is tax

Milan.

What's the Henry Ford quote? Something like "If people knew how the banking system worked, there would be a revolution by lunchtime"
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wendigo100 replied

23 March 2007, 09:08
Inflation also had the opposite effect (the reverse of a tax) - it used to erode one's mortgage, the biggest purchase of many people's lives.
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Buffoon replied

23 March 2007, 09:05
Originally posted by milanbenes

inflation is tax

Milan.

Look on the bright side, inflation also erodes debt as well as savings.
I leave it as an exercise for the reader to determine which of these are more important for el Gordo.
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milanbenes replied

23 March 2007, 08:48
not a lot of people know what I am about to tell you,

inflation is tax

Milan.
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GreenerGrass started a topic Gordon secretly loves inflation

23 March 2007, 08:37
Gordon secretly loves inflation

"Gordon Brown has given savers the green-light to shelter more of their money from the taxman."

ISA limit up £200 to £7200, an increase of a whopping 2.8% since 1999.
If you use up the full £3600 cash ISA allowance then it means you can only invest £3600 in a stocks and shares ISA rather than £4000 as previously.
What a load of rubbish, it should have been raised to at least £8000 in total with a 4000 limit for cash, if not 9 or 10k in total with 5k in cash.

Its a common theme for all his policies, using inflation, especially house price inflation, to gradually erode peoples tax allowances in real terms.

It seems pointless to save anything much over the limits apart from your "lean times fund", anything else may as well go on mortgage overpayments rather than sitting in a taxed account being eaten away by inflation.
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