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.

We already do have high inflation, in real terms, inflation is 1.5-3x higher than saving rates and wage rise rates. We are living with high inflation here and now.

Back in the 1970s when British headline inflation was very high, savings rates and wage rate rises were even higher than inflation; so in real terms, they had nil/negative inflation. But that isn't going to happen now.

I think you should study some the economic history of the Weimar Republic if you seriously think that very high inflation would be a good thing for the country.

High interest rates, even with zero inflation, would cause problems at the moment though due to people being unable to get a new mortgage deal as they are in negative equity. Even a percentage point rise, could hit some people very hard, as so many people are on tracker rates atm. It does need a steady and small rise, but it can't happen straight away. You would be looking at a significant rise in reposessions. The latest figures for repos, came out today - they are up on last year, and particularly bad in Birmingham and the M62 corridor. It would affect places with highest rates of unemployment hardest - just like inflation would.

We are caught in a place, where there isn't a great deal we can do to improve the situation, unless the economy starts to grow first. Its complete stagnation and mess. We are at the mercy of whats going to happen elsewhere, not what we can do about it.

Interestingly Weimar Germany's hyper-inflation was actually very good for wealthy capitalists. Its a while since I studied it (history degree), but if I recall correctly they were able to pay off their debts with worthless marks and consolidate corporate empires by buying up weaker rivals who had gone bust. It was also extremely good for anyone with supplies of foreign currency (not usually the poor). It was particularly devastating for anyone on moderate fixed incomes and impoverished many of the lower middle classes, making them more suspectible to political extremism (hence the rise of the Nazis).

Yes I can see that. interesting. I remember studying the Weimar republic for o level.

We don't have any debts apart from our mortgage and unfortunately that was fixed about 3 years' ago at not a brilliant rate so we are not benefiting from low interest rates but it would be more costly to come out of it and that was what was on offer at the time and was quite competitive.

I have cut back on what i buy as everything has become very expensive and petrol is a killer.

I really feel for people on very low incomes like pensioners as they cannot work and are at the mercy of these rises.

It's the traditional British Way :)