In uk.finance M Holmes wrote:
>> So if we do get hyper-inflation is this a bad thing for people with 100%
>> mortgages or a bad thing for people such as yourself who rent.
> Both.
As it was 3am and I was terse. To add to that: inflation ain't good for
people with any wealth. Yes, there are inflation plays, but in the end
that merely adds overhead and distorts markets. Hyper-inflation is
massively destructive of wealth. Argentina recently took this route out
of a debt-deflation and it all but destroyed the middle class - some
were looking for food on garbage heaps. Zimbabwe has essentially seen
its economy destroyed by hyper-inflation and teachers are prostituting
themselves to put food on the table.
Of course how bad it gets depends on just how far the authorities are
willing to run with the ball, and to an extent how far the ball keeps
going when the problem runs away from them. Still, I contend that it's
far better to deal with a self-limiting problem than to open that can of
worms just to save dodgy banks and their ilk.
FoFP
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