To think that what we/the economy needs is high inflation?

[lelainapierce]

It would wipe out the 'real' value of the debt and bring wages back into line with house prices.

Inflation hurts the rich, with their savings, and equalises the poor who have none.

What we need is lower house prices. What true society prices-out people from having a home, either rented or bought?

YABU... doesn't just hurt the rich it hurts the poor as well. Pensioners living on fixed income savings and annuities would suffer. The poor would have to pay out more on essentials. And on what planet do wages keep pace with inflation???? Idiotic suggestion....

OldGreyWassailTest

bang on the nail

Wages don't necessarily rise to keep pace with inflation - so lots of people would have the same amount of income and more outgoings. I don't see why my weekly bills should rise just so that someone else who has debts needs to pay less.

Inflation is already wiping out people's savings and debt.

What will be scary is when eventually interest rates become sensible again.

If inflation is too high then overseas inverstor will invest elsewhere and there will be fewer jobs and more poor people.

OGWT - that would help a lot. Surely continuing price rises are just not sustainable???

inflation hurts the poor more than the rich.
It's the extra cost put on groceries.
how is it good for poorer people to have to pay £2 or more for 5kg of potatoes?
when 10 years ago, it was about 50-60p.

It is a bloody stupid idea, and YABU.

higher inflation means that more people will be living below the poverty line, and more people won't be able to afford to feed and clothe their families.
Wages don't rise at the rate of inflation, and never have, so it means less money to buy more expensive items.

Niceguy2 - thanks for saving me the effort of typing that out.

However, as everything keeps getting deleted for being a personal attack - let me edit it slightly ... :)

That's the most stupid idea I've heard in a long time.

Thank fuck people who think we need high inflation are not in charge.

The rich will simply transfer their savings abroad. The middle classes will see their meagre savings vanish in real terms and join the poor in having "none"

Fucking great plan! NOT

High inflation would indeed erode debt.

But unless coupled with high interest rates, it would be extremely damaging to pensioners and anyone else who has to rely on savings and would be detrimental to pension funds (thus affecting the next batch of pensioners too). And whatever the interest rate, it would be damaging to those on fixed incomes (eg pensions based on money purchase annuities which may not be able to keep pace). And as benefits and the state pension are only uplifted once a year, there could be unpleasant squeezes for their recipients too.

I think we probably will see higher inflation for a while. But it's something to be cooed with, not encouraged.

Odds on the OP coming back to defend their suggestion? Not holding mine either.

poor people will tend to have the majority of their savings in cash wheras richer people will hold their capital in shares etc

YABU and stupid.

HTH

What we need is lower house prices. What true society prices-out people from having a home, either rented or bought?

Er that wouldn't work. It would mean that a lot of people who had bought their houses at a higher price would be massively in negative equity, wouldn't be able to sell their homes and would be saddled with an enormous debt. It would freeze up the housing market...

Simple idea that I get, but it utterly fails. We need a gradual slow down in house prices, with them becoming more affordable, rather than cheaper. You can't put the housing market into reverse without it having a devastating effect on the economy which ends up affecting home owners and none home owners alike.

Inflation hurting the rich? Hmm yes, all those pensioners. All the normal people who were wise and started pensions only to see how utterly pointless it is, and how they may as well blow their money on rubbish and then depend on the state later in life as they won't be any better off anyway. Or the fact that inflation is already having a huge affect on businesses, who aren't always able to pass on costs, so instead have to make savings (usually in the form of job cuts or pension cuts etc) or go bust.

Yes. Great move.

Can we have some more amazing ideas like these please?

Shall we close this silly thread by pointing the inflation-loving OP in the direction of the 'Weimar Republic' and 'Zimbabwe'?

And, if you want something more substantive, in "Globalisation and its discontents", Joseph Stiglitz gives a pretty good description of what happened in Russia when there was ridiculously high inflation in the late 1990s.

What most people here have described - capital flight (so the rich transferring all their money overseas), savings, pensions, wages etc. of the middle class and poor being completely wiped out.

Deflation is never going to happen so forget about that. House prices are high, we have to accept that. What we need is to lower their real value.

Why did people think I meant only consumer price inflation and not wage inflation, when I clearly mentioned wages being brought into line with house prices in my OP?

People on fixed incomes would also see their incomes rise, especially if pensions were brought back into line with wage inflation rather than RPI.

One in the eye for VP. Still wholly nonsensical though, OP

because Wage Inflation will never happen.
houses continue to get get higher,and wages stay the same (or get artificially lower - by people having to do shorter shifts, or go part-time, or old-timers getting booted out in favour of someone who will earn less)

Does no one else see that this could effectively wipe out the debt (not just the deficit) without all the pain we are going through?

The link to earnings has been restored for the state pension - one of the (few) good things this administration has done.

But private pensions will have their uplift (if any) written into their T&C's and they cannot therefore be amended. So for most will not keep pace.

And any increase in earnings is not going to be in step with inflation rate, so again it cannot be relied on to have either timely or sufficient effect.

It would wipe out debt, but then it would wipe out people's savings (so punishing sensible savers again) and private pensions. It could also encourage the return of reckless borrowing.

1930's Berlin

Germany even