| Topic: | Re:Is Inflation the inevitable result of the Devaluation of the Gordon Brown Pound ? | |
| Posted by: | Michael Daley | |
| Date/Time: | 06/11/09 22:47:00 |
| The answer David is no- provided that the "bad money" is removed from the system when it is no longer "required". The problem is 99% this "manufactured money" has been used to buy NEW government debt. This means "virtual monetary value" has been used to buy debt others won't buy. Reflect on that. I think the implications are clear. Given a disinflation that leads to a deflation most governments (of any political colour) will go for inflation instead. So at some time in the future that is a real issue for the UK (and particularly its pensioners) and the rising gold price perhaps reflects that. The devaluation of the pound is good inasmuch as Europeans can but assets here 15% cheaper. In the case of property that number is (say) 35%, so it supports the illusion that the decline in property values is over. The last line of your post David sums it up rather well. 2010/2011 are going to be the worst years many members of this site have ever experienced. The first phase is over (financial crisis); the second phase is underway (economic crisis) and the final phase (social) will commence after the election. |