The Inflation will keep growing?

Dave wrote in news: snipped-for-privacy@h9g2000yqi.googlegroups.com:

Reagan and Thatcher defeated inflation after 8 years of it (at 10+% per year) in the post-Vietnam years. 2 Arab embargoes jacked it up hugely in the 1970's as the lobsided "friendship" between the U.S. and Israel began to tell...Meanwhile, give socialists any time in office (Obama) and back comes inflation. They are a plague.

Started in the 1980s when your Bitch Goddess wanted to hide the real unemployment figures. By 1986 the government statisticians were threatening strike action over the debasement of their prfession

Very true.

I'm not sure exactly what you mean there. Are you referring to the prices than can be affected by policy decisions and those that can't?

At least moderate inflation over a very long period and/or large-scale sharp devaluation is the *only* way the UK government will ever have any chance of 'paying off' the debt that is *still* increasing by ~150 billion a year. So, large haircuts for the lenders, but keep it as quiet as possible for as long as possible.

Dave knows that just as well as Gordon did.

Of course, it does also require a lot of *real* growth in the economy, so that large quantities of the less-valuable money will be available to do the paying. Growth in the public sector *consumes* tax revenue, it doesn't generate it, and I cannot see why Gordon ever thought otherwise.

Devaluation of the currency is necessary but not sufficient. A large, sustained excess of tax revenue over government spending (as if!) is also necessary. Otherwise a substantial portion of tax revenue will disappear in interest payments forever.

just so

he's thick...the one thing no-one seems to consider, understand or realise he really is seriously thick

how will you define growth, real or otherwise?

that depends! the 'interest' is paid in continually devaluing coin...

and inflation produces tax revenue on a homeric scale

regards

Which would not help as the lenders would just keep increasing the interest rates, so the repayments would keep up with (or even overtake) the rate of inflation.

Spending taxpayer's money *can* generate growth. A subsidy to mining in the 80s to keep the price of deep mined coal on a par with that of state subsidised imported coal would have kept loads of people in work in the private sector. With a stable core business they could compete for other work. Even some of the present day tories are admitting their bitch goddess was an economic illiterate on that score.

The classic example is the USA subsidy to military suppliers. Very rarely does a non US company get a toehold in the bread and butter supply chain.

Not much good when the paper it is printed on finally becomes more valuable than the currency itself. That's when it is cheaper to burn your salary to keep warm rather than pay a fuel bill

The problem is that such a subsidy is in breach of EU rules so the colour of the UK government is irrelevant

tim

It wasn't in the 1980s

at present no....market pressure makes interest rates very low.... the far east is saving far more than they spend... presently the banks won't lend on anything but safe bets... in the meanwhile the government is forcing banks to hold more capital(that also is squeezing lending)

just add zeros to the face number

meanwhile we are not even close to your assertion... even in zimbabwe they weren't burning the paper...even in hungary and germany it was myth making...

in britain, first one small coin disappears...then another... in a decade or three we get 'new' pounds

regards