Inflation will save us! (25 Jan, 2022)

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Inflation will save us! (25 Jan, 2022)

Postby aardvark_admin » Tue Jan 25, 2022 5:06 am

This column is archived at: https://aardvark.co.nz/daily/2022/0125.shtml

Will quantative easing be the way that governments effectively wipe much of the debt incurred through financial support handed out during the CV19 pandemic?

Could inflation also (eventually) bring an overheated property market back into line and see a normalisation of prices at last?

If this does happen, what about the losers?

How do all those people who have simply accumulated a large bank balance to see them through their retirement cope when the value of that nest-egg is slashed?

Are there lessons we've learned in similar economic cycles during years-gone-by (the 1980s for instance) that can be applied here?
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Re: Inflation will save us! (25 Jan, 2022)

Postby AnTFax » Tue Jan 25, 2022 7:20 am

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Re: Inflation will save us! (25 Jan, 2022)

Postby hagfish » Tue Jan 25, 2022 7:55 am

If interest rates force lots of over-leveraged speculators into foreclosure, I expect banks will take those properties on and rent them. Meet the new landlord. Even worse than the old one.
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Re: Inflation will save us! (25 Jan, 2022)

Postby aardvark_admin » Tue Jan 25, 2022 8:47 am

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Re: Inflation will save us! (25 Jan, 2022)

Postby AnTFax » Tue Jan 25, 2022 8:59 am

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Where to Start?

Postby Perry » Tue Jan 25, 2022 2:17 pm

Bruce wrote:Here in New Zealand alone that economic support is measured in billions of dollars.

Not quite. It's measured in hundreds. Last figure I had was $220B.

Bruce wrote:The other problem we have is an property/housing market that is totally out of control. When the average Kiwi's house earns more money each year (in tax-free capital gains) than they do as a wage-slave at their day-job, you know something is seriously wrong and unsustainable.

Something is indeed wrong. People are NOT earning money via increases in house prices. Especially when all the others are going up in price by much the same factor. There is no gain, just a change in numbers; not earnings. Earnings are something you 'can pocket' to pay for beer, food, petrol, drones, etc.

Bruce wrote:Skyrocketing house prices are destroying the Kiwi dream and creating generations who will never be able to own the homes in which they live.

There's the other side of that coin.

Escalating inflation (decline in purchasing power of a dollar), rampant bureaucracy and declining wages are destroying the Kiwi dream and creating generations who will never be able to own the homes in which they live.

BTW - for many countries, renting for life is normal.

How many on this forum remember coins in these denominations?
5 cents
2 cents
1 cent

and / or

a ha'penny
a farthing

A Sydney flat (or soldier or barracouta) loaf @ seven pence ha'penny a loaf.
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Re: Inflation will save us! (25 Jan, 2022)

Postby aardvark_admin » Wed Jan 26, 2022 6:42 am

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Re: Inflation will save us! (25 Jan, 2022)

Postby aardvark_admin » Wed Jan 26, 2022 7:04 am

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Re: Inflation will save us! (25 Jan, 2022)

Postby AnTFax » Wed Jan 26, 2022 7:27 am

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Re: Inflation will save us! (25 Jan, 2022)

Postby aardvark_admin » Thu Jan 27, 2022 10:36 am

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