read the title of this post , many probably will give me the nuts and / or incompetent: both possible, because are only a student of economics (albeit now running out) ... However, I consider this hazard
/ prediction on what I think is the true and only medium-term exit strategy from piles of debt every day that threaten the world's economies, both at the level of individuals, businesses and the level of Member (case-Greece these days docet ): inflation.
The devastating effects (and bad) of inflation are quite well known, less than (at first sight unexpectedly) positive.
Inflation is like a huge devaluation , which relies less money in terms of purchasing power, by virtue of the upward spiral of prices, it is seen as the normally eyewash by the citizens-consumers , because an increase in fast / fast the prices of consumer goods drastically lowers their standard of living, given that salaries usually grow far less inflationary prices during the crisis. This
under "normal" .
Today we are instead of the exceptional situation in which both individuals / families (except a few countries, like Italy, Japan and China), companies and sovereign countries are the monstrous debt: these "boulders "borrowers are now the mortgage on any real economic recovery, which is also far from forthcoming. With the cd
debt service - interest and alias -Repayment of the capital - individuals / families, businesses and governments have a constant flow cash outflows that can not be circumvented, which means A large proportion of personal income / family, corporate and government (aka GDP) is "immobilized" in the reimbursement, making it very thin margins in autonomous consumption expenditure (for individuals and families), investment (for companies) and development / research (state).
as inflation got to do with this? The
meccansimo is more or less the following: today a mobile phone costs (assume) 100 €, my earned income is 50 € and then buy it for me undue 50; if you get a strong inflation - where you intend to strong double-digit, like 20% - my debt is always the face value of 100 €, but in the meantime it is very likely that my employer I have adjusted upward salary (without being able to keep pace with general price increase, which raised the cost avran phone at 120 €), for example at 60 €.
What is the result? That now, instead of having to use my entire salary / income to pay my debt of € 50, now I'm just a portion (albeit large) .
E 'is the only "miracle" of inflation: be a huge eraser debt, by virtue of the fact that vast majority of debts are written in terms of money nominale - i nostri 50 € - e non di potere d'acquisto.
Detto questo รจ facile comprendere quale potrebbe essere il beneficio per famiglie, individui, imprese e Governi indebitati da una "salutare" fiammata inflazionistica: d'un tratto vedrebbero i loro debiti de facto cancellati (o comunque resi "inoffensivi"), senza doversi sottoporre a misure di austerity , tagli di bilancio e tutto il repertorio che si sfoggia in periodi di crisi.
Le altre facce della medaglia? Che chi ha prestato i soldi, alias creditori - ad esempio i detentori di titoli di Stato, come le nostre famiglie -, vedrebbero il loro investment go up in smoke ; also high inflation for too long / off control may be a medicine worse than the disease, since the train of economic instability (read: the collapse of the monetary system) that door.
This will be the road worldwide will be undertaken? I do not know, much will depend on calculations from "lesser evil" and the consensus that such a solution might have: with high inflation would be the most favored or corrupted?
It is not easy to say, since there are many businesses that they would have much to gain as to lose (eg the big banks): conversely some appetite for adventure inflation now seems to be shared by the central banks of leading industrial countries, with the continuing policy of "easy money" (through low interest rates) of these years ...
We'll see!
Lord Tojo
/ prediction on what I think is the true and only medium-term exit strategy from piles of debt every day that threaten the world's economies, both at the level of individuals, businesses and the level of Member (case-Greece these days docet ): inflation.
The devastating effects (and bad) of inflation are quite well known, less than (at first sight unexpectedly) positive.
Inflation is like a huge devaluation , which relies less money in terms of purchasing power, by virtue of the upward spiral of prices, it is seen as the normally eyewash by the citizens-consumers , because an increase in fast / fast the prices of consumer goods drastically lowers their standard of living, given that salaries usually grow far less inflationary prices during the crisis. This
under "normal" .
Today we are instead of the exceptional situation in which both individuals / families (except a few countries, like Italy, Japan and China), companies and sovereign countries are the monstrous debt: these "boulders "borrowers are now the mortgage on any real economic recovery, which is also far from forthcoming. With the cd
debt service - interest and alias -Repayment of the capital - individuals / families, businesses and governments have a constant flow cash outflows that can not be circumvented, which means A large proportion of personal income / family, corporate and government (aka GDP) is "immobilized" in the reimbursement, making it very thin margins in autonomous consumption expenditure (for individuals and families), investment (for companies) and development / research (state).
as inflation got to do with this? The
meccansimo is more or less the following: today a mobile phone costs (assume) 100 €, my earned income is 50 € and then buy it for me undue 50; if you get a strong inflation - where you intend to strong double-digit, like 20% - my debt is always the face value of 100 €, but in the meantime it is very likely that my employer I have adjusted upward salary (without being able to keep pace with general price increase, which raised the cost avran phone at 120 €), for example at 60 €.
What is the result? That now, instead of having to use my entire salary / income to pay my debt of € 50, now I'm just a portion (albeit large) .
E 'is the only "miracle" of inflation: be a huge eraser debt, by virtue of the fact that vast majority of debts are written in terms of money nominale - i nostri 50 € - e non di potere d'acquisto.
Detto questo รจ facile comprendere quale potrebbe essere il beneficio per famiglie, individui, imprese e Governi indebitati da una "salutare" fiammata inflazionistica: d'un tratto vedrebbero i loro debiti de facto cancellati (o comunque resi "inoffensivi"), senza doversi sottoporre a misure di austerity , tagli di bilancio e tutto il repertorio che si sfoggia in periodi di crisi.
Le altre facce della medaglia? Che chi ha prestato i soldi, alias creditori - ad esempio i detentori di titoli di Stato, come le nostre famiglie -, vedrebbero il loro investment go up in smoke ; also high inflation for too long / off control may be a medicine worse than the disease, since the train of economic instability (read: the collapse of the monetary system) that door.
This will be the road worldwide will be undertaken? I do not know, much will depend on calculations from "lesser evil" and the consensus that such a solution might have: with high inflation would be the most favored or corrupted?
It is not easy to say, since there are many businesses that they would have much to gain as to lose (eg the big banks): conversely some appetite for adventure inflation now seems to be shared by the central banks of leading industrial countries, with the continuing policy of "easy money" (through low interest rates) of these years ...
We'll see!
Lord Tojo
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