Curbing inflation

essex man · Sep 2, 2023

Clive said:
as i say, interest rate rises never work, and certainly never will in a global economy build upon and dependent upon debt , why this mistake is made over and over historically i have no idea

our government needs to get farm more creative to dig out of this hole

Interest rate rises always work and have always worked in reducing inflation.
There are numerous examples.
Assuming supply side doesn't vary extraordinarily then raising interest rates will decrease the amount of money in circulation and therefore increase its value..thereby reducing inflation.
We have increased the amount of money in circulation creating inflation.
Supply side shocks have exasperated this.

Clive · Sep 3, 2023

essexpete said:
You have increased your capital base but you have not really made money until you sell that land?

of course i have - i just choose to store that money in land not cash

if i wanted / needed cash i could sell land to realise that cash or i could borrow cash against my now more valuable asset

any quantity of cash in excess to your immediate need is not a smart asset to hold

essexpete · Sep 3, 2023

Clive said:
of course i have - i just choose to store that money in land not cash

if i wanted cash i could sell land to realise that cash or i could borrow cash against my now more valuable asset

any quantity of cash in excess to your immediate need is not a smart asset to hold

You are very right there, losing real value hand over fist.

Clive · Sep 3, 2023

essex man said:
Interest rate rises always work and have always worked in reducing inflation.
There are numerous examples.
Assuming supply side doesn't vary extraordinarily then raising interest rates will decrease the amount of money in circulation and therefore increase its value..thereby reducing inflation.
We have increased the amount of money in circulation creating inflation.
Supply side shocks have exasperated this.

history disagrees if you look back at previous recessions

midlandslad · Sep 3, 2023

Investing in land is great if you know it is going to increase year on year.

Recent increases have been exponential and linked to tax policy rather than earning capacity.

What will a Labour government change in uk tax policy?

Clive · Sep 3, 2023

midlandslad said:
Investing in land is great if you know it is going to increase year on year.

Recent increases have been exponential and linked to tax policy rather than earning capacity.

What will a Labour government change in uk tax policy?

we have had labour governments before - they didn’t change land taxation then

land value is not just about tax (although it clearly helps !) , it’s a finite commodity in the uk

teslacoils · Sep 3, 2023

midlandslad said:
Investing in land is great if you know it is going to increase year on year.

Recent increases have been exponential and linked to tax policy rather than earning capacity.

What will a Labour government change in uk tax policy?

Labour rules out wealth tax if party wins next election

Shadow chancellor Rachel Reeves says extra money for public services must come from economic growth.

www.bbc.com

Admittedly, it's unlikely they were going to say they would put up taxes. But reality is UK politics is now so similar your vote really is for the blues (thinly veiled public school sexual deviants) or the reds (sob story paupers now on the gravy train mixed with chameleon toffs and the occasional career civil servant who did a protest march in the 70s).

Policywise, you'd be hard to tell as the peddle the popularist twang to get / keep power.

essexpete · Sep 3, 2023

teslacoils said:
Labour rules out wealth tax if party wins next election

Shadow chancellor Rachel Reeves says extra money for public services must come from economic growth.

www.bbc.com

Admittedly, it's unlikely they were going to say they would put up taxes. But reality is UK politics is now so similar your vote really is for the blues (thinly veiled public school sexual deviants) or the reds (sob story paupers now on the gravy train mixed with chameleon toffs and the occasional career civil servant who did a protest march in the 70s).

Policywise, you'd be hard to tell as the peddle the popularist twang to get / keep power.

Does that not sum up quite a few politicians of the last 100 years?

essexpete · Sep 3, 2023

Clive said:
history disagrees if you look back at previous recessions

I think money supply control does work but often the decision makers are lagging behind coupled with a natural lag with changes. This contributes to cycles, peaks and troughs, as it were.

Y Fan Wen · Sep 3, 2023

essexpete said:
I think money supply control does work but often the decision makers are lagging behind coupled with a natural lag with changes. This contributes to cycles, peaks and troughs, as it were.

I remember one ex chancellor saying that managing the uk economy was like driving a car while looking out of the back window. He could see where he had been but not where the road was going to be.

essex man · Sep 3, 2023

Clive said:
history disagrees if you look back at previous recessions

No it doesn't, high interest rates reduce inflation, generally reduce activity and often cause recessions.
Money is the same as wheat, if supply falls then the value increases

Clive · Sep 3, 2023

essex man said:
No it doesn't, high interest rates reduce inflation, generally reduce activity and often cause recessions.
Money is the same as wheat, if supply falls then the value increases

can’t find it just now but i watched a good economics history youtube a few weeks ago that went though each recession of the last 100years and inflation / interest rates and in ever case ultimately rate rises failed to fix things

pellow · Sep 4, 2023

The 1st priority of the central banks is not to keep all domestic businesses running smoothly, its to keep the system alive, if interest rates were not used to stiffle spending, hyper inflation would be a real possibility and the system is would be knackered then

essexpete · Sep 4, 2023

Clive said:
can’t find it just now but i watched a good economics history youtube a few weeks ago that went though each recession of the last 100years and inflation / interest rates and in ever case ultimately rate rises failed to fix things

The period post interest rate rises would need to be looked at regarding public sector borrowing and govt debt?

Clive · Sep 4, 2023

pellow said:
The 1st priority of the central banks is not to keep all domestic businesses running smoothly, its to keep the system alive, if interest rates were not used to stiffle spending, hyper inflation would be a real possibility and the system is would be knackered then

if they slow down spending and kill borrowing an economy built on debt very quickly enters a spiral of doom, negative growth and recession . - property prices fall as people no longer borrow, business fail as spending drops, borrowers default as they loose their jobs or can’t afford credit needed to buy ……….. and banks security is now not worth enough

2008 subprime repeat anyone ?

there is then only one magic trick solution available to restore confidence, the magic that is QE used over and over again in various forms ………… and the cycle begins again, just with higher numbers than last time

Nitrams · Sep 4, 2023

Clive said:
if they slow down spending and kill borrowing an economy built on debt very quickly enters a spiral of doom, negative growth and recession . - property prices fall as people no longer borrow, business fail as spending drops, borrowers default as they loose their jobs or can’t afford credit needed to buy ……….. and banks security is now not worth enough

2008 subprime repeat anyone ?

there is then only one magic trick solution available to restore confidence, the magic that is QE used over and over again in various forms ………… and the cycle begins again, just with highef numbers than last time

If BRICS gets any headway the western debt model would be under.serious threat. If foreign investment shifts away from western currency we are all buggered.

Clive · Sep 4, 2023

cash is seriously over rated !

Nitrams · Sep 4, 2023

As a producer of tangible goods I wonder if brics would be a good thing, the way ag is going in this country we.will be living like peasants anyway...

essex man · Sep 5, 2023

Clive said:
can’t find it just now but i watched a good economics history youtube a few weeks ago that went though each recession of the last 100years and inflation / interest rates and in ever case ultimately rate rises failed to fix things

I fear we are talking about different things, i am talking about inflation and the need to curb and prevent it, interest rates are raised to do this.
Raising interest raises will slso slow economies that is part of the necessary effect in order to get inflation down.
The interest rate rise is necessitated by the inflation so not really the cause of recession

SilliamWhale · Sep 5, 2023

Clive said:
cash is seriously over rated !

You say that but to the vast majority of people it's simply what they live off.

Curbing inflation

Member

Staff Member

Member

Staff Member

Member

Staff Member

Member

Member

Member

Member

Member

Staff Member

Member

Member

Staff Member

Member

Staff Member

Member

Member

Member

0 %

Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

Share this page