Reply to: Inflation or default?

[BrilloPad]

No chance you're going to see any inflation for the next 20 years.

I beg to differ. Lets come back in 20 years and see who is right.

I aim to have 300,000 posts by then......

[DodgyAccountant]

If you have savings, what IS traditionally the right thing to do with your money when inflation is high relative to interest rates?

Precious metals.

[petergriffin]

Inflation.

No chance you're going to see any inflation for the next 20 years.

[petergriffin]

They didn't cling onto the gold standard. They left it in 1933 and FDR embarked on a huge Keynesian binge causing a depression and the world is doing the very same thing today.

Yes and no. They left the gold standard for the silver standard, which is probably healthier than the gold standard. Then they introduced the Glass Steagall Act in 1933 which was partially repealed in 1999 and that's where we are now!

[Robinho]

So how did clinging to the Glad Standard work out in the '30s?

They didn't cling onto the gold standard. They left it in 1933 and FDR embarked on a huge Keynesian binge causing a depression and the world is doing the very same thing today.

[SantaClaus]

Who knows?

No-one on here, that's for sure!

[Old Greg]

Well it won't be simple, only because it will reveal what an absolute state the country is in though. There will be no hiding it with inflation or ridiculous interest rates.

So how did clinging to the Glad Standard work out in the '30s?

[Robinho]

That is indeed simple.

Well it won't be simple, only because it will reveal what an absolute state the country is in though. There will be no hiding it with inflation or ridiculous interest rates.

[Old Greg]

It's simple, you go back to the gold standard and let the market decide the interest rates.

Much harder for banks to mess up things when they can't print money with a 0 reserve ratio.

That is indeed simple.

[Robinho]

Quality comment too! ->

This tendency was particularly pronounced in the British economy, where the City of London exercised enormous power over the boardroom strategies of major companies, and which became overly focused on share price and insufficiently focused on long-term R&D and investment.

I see this being the same within Government itself , replace shareprice with GDP .

We need to look at ways to make the UK unique and competitive and invest in a future that's diversified and sustainable.

It's simple, you go back to the gold standard and let the market decide the interest rates.

Much harder for banks to mess up things when they can't print money with a 0 reserve ratio.

[Scoobos]

Quality comment too! ->

This tendency was particularly pronounced in the British economy, where the City of London exercised enormous power over the boardroom strategies of major companies, and which became overly focused on share price and insufficiently focused on long-term R&D and investment.

I see this being the same within Government itself , replace shareprice with GDP .

We need to look at ways to make the UK unique and competitive and invest in a future that's diversified and sustainable.

[d000hg]

If you have savings, what IS traditionally the right thing to do with your money when inflation is high relative to interest rates?

[Old Greg]

So now's the time to get a mortgage???

Who knows?

[Scoobos]

I'm afraid you made the wrong decision and should have moved into debt a while ago so it can be inflated away.

So now's the time to get a mortgage???

[Old Greg]

A good article I thought, especially this paragraph:

"Monetarists blame the ECB and the Fed for keeping money too tight in early to mid 2008, pushing a fragile credit system over the edge. They blame “pro-cyclical” regulators for aborting recovery ever since by forcing banks to raise asset ratios too fast. They are right on both counts.

Yet the `Austrian School’ is surely right as well to argue that a rise in debt ratios across the rich world from 167pc of GDP to 314pc in just thirty years was bound to end badly. There comes a point when extra debt draws down prosperity from the future. The future arrived in 2008."


I'm a bit miffed that, having never operated unethically with my personal finances, and been debt free, that economic policy seems to be to protect those that have taken more than they can afford - and also the companies too.

It seems that everyone who lived beyond their means is being helped out of the mess. I don't agree with this, how else will anyone learn?

Ambrose is my favourite.

I'm afraid you made the wrong decision and should have moved into debt a while ago so it can be inflated away.