£ 900

[milly]

After decades of deflation.
Japan's inflation rate in April 2023 was 3.5%.
Annualised growth rate after 1st quarter of 2023 was 2.7%.
BOJ base rate : -0.1%
The National Debt is 230% of GDP.
Conclusion: National Debt is not as important to an economy as avoiding deflation.

You don't like things getting cheaper .

Like the great depression in the 1930s?
Not really no.

I would prefer Money that doesn't lose most of it's value over the decades but if you prefer your purchasing power to be eroded then I find that rather peculiar.

[Woody Guthrie]

I would prefer Money that doesn't lose most of it's value over the decades but if you prefer your purchasing power to be eroded then I find that rather peculiar.

It's not really, you just need to be able to see the big picture rather than focus on prices.

Deflation may protect purchasing power but it also increases the real value of debt (which we have record levels of) and stagnates wages and fuels unemployment leaving people worse off.

There's a reason why it was called the Great Depression and why Japan's deflationary spiral was called the Lost Decade.

I suppose those that gain are retirees with little or no debt and a fixed income but that's a little selfish.

[milly]

I would prefer Money that doesn't lose most of it's value over the decades but if you prefer your purchasing power to be eroded then I find that rather peculiar.

It's not really, you just need to be able to see the big picture rather than focus on prices.

Deflation may protect purchasing power but it also increases the real value of debt (which we have record levels of) and stagnates wages and fuels unemployment leaving people worse off.

There's a reason why it was called the Great Depression and why Japan's deflationary spiral was called the Lost Decade.

I suppose those that gain are retirees with little or no debt and a fixed income but that's a little selfish.

Workers saved Labour is retained through deflation, I suppose we differ in that I believe that people who have worked hard all their lives shouldn't have their Labour stolen to reward debtors.
So it's a little selfish for savers to bail out the feckless.

[Woody Guthrie]

You have thrived with and lived off consumer debt.
It is what's driven growth for the last 60 years and paid your wages and added to your pension.
I'm sure even you have at least had a mortgage but now debtors are suddenly feckless and you want to pull up the ladder to protect your savings?

If we had been living in a deflationary spiral for the last 60 years you would have no pension to look forward to and no savings to speak of.

But now you want one?

[milly]

You have thrived with and lived off consumer debt.
It is what's driven growth for the last 60 years and paid your wages and added to your pension.
I'm sure even you have at least had a mortgage but now debtors are suddenly feckless and you want to pull up the ladder to protect your savings?

If we had been living in a deflationary spiral for the last 60 years you would have no pension to look forward to and no savings to speak of.

But now you want one?

Why would you have no savings or pension under deflation?
Also anybody who has saved hard shouldn't have to bail out someone with a massive mortgage, huge credit card debt, personal loan and a Car lease.
I'm afraid this consumer driven economy that produces illusory wealth is about to come crashing down.
People in the UK think that you can become wealthy by selling Houses to each other rather than building productive industries that make things.

[renrag40]

You have thrived with and lived off consumer debt.
It is what's driven growth for the last 60 years and paid your wages and added to your pension.
I'm sure even you have at least had a mortgage but now debtors are suddenly feckless and you want to pull up the ladder to protect your savings?

If we had been living in a deflationary spiral for the last 60 years you would have no pension to look forward to and no savings to speak of.

But now you want one?

Why would you have no savings or pension under deflation?
Also anybody who has saved hard shouldn't have to bail out someone with a massive mortgage, huge credit card debt, personal loan and a Car lease.
I'm afraid this consumer driven economy that produces illusory wealth is about to come crashing down.
People in the UK think that you can become wealthy by selling Houses to each other rather than building productive industries that make things.

I think you will find that a lot of people have made tidy sums of money through buying and selling houses..... have you never watched "Homes Under The Hammer"?
Most modern developed Western economies are service based economies. Would you rather we attempt to compete with 3rd world economies to "make things" ?
How do you propose to do that? Reduce the minimum wage to £1 per hour in an effort to compete?
Your position isn't helped by the fact that you work in a service job. You don't produce anything.
Perhaps you would like to enlighten us into how your personal wealth isn't illusionary?

[milly]

You have thrived with and lived off consumer debt.
It is what's driven growth for the last 60 years and paid your wages and added to your pension.
I'm sure even you have at least had a mortgage but now debtors are suddenly feckless and you want to pull up the ladder to protect your savings?

If we had been living in a deflationary spiral for the last 60 years you would have no pension to look forward to and no savings to speak of.

But now you want one?

Why would you have no savings or pension under deflation?
Also anybody who has saved hard shouldn't have to bail out someone with a massive mortgage, huge credit card debt, personal loan and a Car lease.
I'm afraid this consumer driven economy that produces illusory wealth is about to come crashing down.
People in the UK think that you can become wealthy by selling Houses to each other rather than building productive industries that make things.

I think you will find that a lot of people have made tidy sums of money through buying and selling houses..... have you never watched "Homes Under The Hammer"?
Most modern developed Western economies are service based economies. Would you rather we attempt to compete with 3rd world economies to "make things" ?
How do you propose to do that? Reduce the minimum wage to £1 per hour in an effort to compete?
Your position isn't helped by the fact that you work in a service job. You don't produce anything.
Perhaps you would like to enlighten us into how your personal wealth isn't illusionary?

Why do you go straight to the lowest common denominator?
That industrial manufacturing powerhouse Germany doesn't pay its workers a £1 an hour to complete with the rest of the World.
As for Housing, many people are now finding that their wealth is completely illusory as house prices fall due to higher interest rates caused by the BOE printing illusory wealth.
Many of those people who were influenced by the plethora of property programmes on British TV are in for a World of pain now that interest rates are rising.
BTW how do you think our RM Pensions will be be doing now that Gilt yields keep rising ?

[RobertT]

BTW how do you think our RM Pensions will be be doing now that Gilt yields keep rising ?

You do realise that high gilt yields actually improve the funding position of DB schemes don't you?

You may find the following interesting:

https://www.ftadviser.com/pensions/2023 ... -pensions/
https://www.pensions-expert.com/Special ... n-pensions
https://www.mpafm.co.uk/how-has-the-inc ... -industry/

It's DC schemes that have been negatively affected. Although annuity rates have increased sharply in recent months, which will offset things to some degree for those who want to guarantee their income.

[milly]

BTW how do you think our RM Pensions will be be doing now that Gilt yields keep rising ?

You do realise that high gilt yields actually improve the funding position of DB schemes don't you?

You may find the following interesting:

https://www.ftadviser.com/pensions/2023 ... -pensions/
https://www.pensions-expert.com/Special ... n-pensions
https://www.mpafm.co.uk/how-has-the-inc ... -industry/

It's DC schemes that have been negatively affected. Although annuity rates have increased sharply in recent months, which will offset things to some degree for those who want to guarantee their income.

As the Coupons on Gilts rise the value of Gilts goes down.
With regard to annuity rates they are still well below inflation so you are guaranteed to lose purchasing power.
Austria sold 100 year bonds in 2020 at a yield of 0.88% which have now lost around 60% of their value, only another 97 years to get your money back on that one.
The UK 10 year Gilt is down 14.23% ytd.

[RobertT]

You've stated on numerous occasions on this forum, the RMPP is in a perilous position due to gilt yields rising. The articles I linked to disprove your theory!
I'm inclined to believe the Financial Times, ahead of a postie!

The RMPP trustees recently approved the release of an amount of money held in an escrow account, which I personally disagree with. I'd have preferred that additional safety net, albeit small in comparison to the overall value of the RMPP.
But do you think they would have agreed to that, if the scheme was in the state you portray?

[milly]

You've stated on numerous occasions on this forum, the RMPP is in a perilous position due to gilt yields rising. The articles I linked to disprove your theory!
I'm inclined to believe the Financial Times, ahead of a postie!

The RMPP trustees recently approved the release of an amount of money held in an escrow account, which I personally disagree with. I'd have preferred that additional safety net, albeit small in comparison to the overall value of the RMPP.
But do you think they would have agreed to that, if the scheme was in the state you portray?

So Gilts go up our Pension is safe and if Gilts go down our Pension is safe, in essence perfectly hedged and zero risk, awesome

Before you put your faith in the "experts" remember that the BOE said this week that any gender identity can get pregnant .

[RobertT]

You seem to deal solely in extremes!

Both high and low gilt yields can cause problems to one extent or another, but a middle ground means they work the way they're supposed to.

Inflation was mentioned earlier in this thread, where you seemed to think deflation would be much better than the current high rates we have at the moment.

But again, a middle ground and low but steady rates of inflation mean the economy is ticking over nicely without too many dramas.
Why do you think the BoE has a target inflation rate of 2%?

Obviously, things aren't exactly perfect at the moment. But we've had periods like his before and the world hasn't ended yet!

The gender identity thing is clearly just a badly written, throw away piece of pointless drivel!

[milly]

You seem to deal solely in extremes!

Both high and low gilt yields can cause problems to one extent or another, but a middle ground means they work the way they're supposed to.

Inflation was mentioned earlier in this thread, where you seemed to think deflation would be much better than the current high rates we have at the moment.

But again, a middle ground and low but steady rates of inflation mean the economy is ticking over nicely without too many dramas.
Why do you think the BoE has a target inflation rate of 2%?

Obviously, things aren't exactly perfect at the moment. But we've had periods like his before and the world hasn't ended yet!

The gender identity thing is clearly just a badly written, throw away piece of pointless drivel!

2% inflation compounded over even a short time isn't great either.

E.G, Say you had £100,000 and stuck in under your mattress, with inflation running at 2% a year on average, after 20 years it would be worth just £66,761.

As for your "appeal to authority" fallacy, a humble Postie can be right and those experts at the FT can be wrong and have been wrong just like the BOE.
With regard to the BOE saying that any gender can become pregnant, yes it is drivel but these Bankers are supposed to be serious people, that statement alone shows how clueless they are.

[RobertT]

So you're moaning because inflation is high at the moment and it's eating into your wages, pension, savings, etc. Fair enough – it's probably affecting everyone to one degree or another.
But you're also moaning at the thought of it going back to more normal levels?

I doubt everyone who works for the BoE is a banker, anymore than everyone who works for RM is a postie.

[milly]

So you're moaning because inflation is high at the moment and it's eating into your wages, pension, savings, etc. Fair enough – it's probably affecting everyone to one degree or another.
But you're also moaning at the thought of it going back to more normal levels?

I doubt everyone who works for the BoE is a banker, anymore than everyone who works for RM is a postie.

You seem to be accepting that inflation is normal and that its acceptable for your saved Labour to be lost at 2% per annum.
Unfortunately inflation isn't going away anytime soon.
Our economy doesn't produce enough wealth to pay for demands placed upon it.