El Cid Posted March 25, 2015 Share Posted March 25, 2015 Before it was announced, I would have said that low inflation was good, but negative of zero inflation was bad. The spin seems to be that zero it is good, is that true? No house owners want low inflation, never mind zero. Link to comment Share on other sites More sharing options...
taxman Posted March 25, 2015 Share Posted March 25, 2015 Before it was announced, I would have said that low inflation was good, but negative of zero inflation was bad. The spin seems to be that zero it is good, is that true? No house owners want low inflation, never mind zero. I'm a house owner and I'd rather there be zero inflation. That's because I'm not one of those constantly looking at house prices with a view to selling. I'm happy in my home. On a more general point there is no reason why prices should have to go up year on year on year ad infinitum. Despite the spin they still are though. You'll not be seeing rail prices or bus prices coming down anytime soon. Link to comment Share on other sites More sharing options...
tzijlstra Posted March 25, 2015 Share Posted March 25, 2015 The bigger picture is that a lot of people in this country are already in serious debt, sometimes to the limit, deflation means their incomes are not rising a lot to move them away from that limit whilst in real terms the debt is bigger (so zero is alright, but what happens when it goes below?). In Japan it also had a crippling effect on economic growth for nearly two decades. Standing still in the global economy is basically falling behind even quicker when competing against 5-8% growth economies. Link to comment Share on other sites More sharing options...
taxman Posted March 25, 2015 Share Posted March 25, 2015 The bigger picture is that a lot of people in this country are already in serious debt, sometimes to the limit, deflation means their incomes are not rising a lot to move them away from that limit whilst in real terms the debt is bigger (so zero is alright, but what happens when it goes below?). In Japan it also had a crippling effect on economic growth for nearly two decades. Standing still in the global economy is basically falling behind even quicker when competing against 5-8% growth economies. A lot of people have had wage freezes or lower wages despite positive inflation in the past few years. Inflation and wages don't necessarily go hand in hand despite what we've been told for the last 40 years (i.e inflation is caused by increased wage demands) Link to comment Share on other sites More sharing options...
El Cid Posted May 19, 2015 Author Share Posted May 19, 2015 In Japan it also had a crippling effect on economic growth for nearly two decades. Standing still in the global economy is basically falling behind even quicker when competing against 5-8% growth economies. How come this subject did not come up before the election? We now have deflation, which IS bad, but it hardly seems to be reported that way. http://www.bbc.co.uk/news/business-32793481 Link to comment Share on other sites More sharing options...
Cyclone Posted May 19, 2015 Share Posted May 19, 2015 Before it was announced, I would have said that low inflation was good, but negative of zero inflation was bad. The spin seems to be that zero it is good, is that true? No house owners want low inflation, never mind zero. Zero inflation would suit me just fine with regards to house prices. Why would any house owner (owning a single house) want any inflation to take place... Link to comment Share on other sites More sharing options...
El Cid Posted May 19, 2015 Author Share Posted May 19, 2015 Zero inflation would suit me just fine with regards to house prices. Why would any house owner (owning a single house) want any inflation to take place... I would think that anyone with assets would benefit from inflation, as a general rule. Link to comment Share on other sites More sharing options...
loraward Posted May 19, 2015 Share Posted May 19, 2015 Before it was announced, I would have said that low inflation was good, but negative of zero inflation was bad. The spin seems to be that zero it is good, is that true? No house owners want low inflation, never mind zero. I own an house and I don't mind if it drops in value, if it halves in value I will still own the house, I will still be able to live in it and still be able to sell it and buy another house that will have also fallen in value. Property owners that see their house as an investment and not an home to live in might have a different opinion. Link to comment Share on other sites More sharing options...
Cyclone Posted May 19, 2015 Share Posted May 19, 2015 I would think that anyone with assets would benefit from inflation, as a general rule. A single house is technically an asset, but it isn't really, because you can only liquidate it by becoming homeless. And if you ever intend to move up the housing chain, inflation is most definitely your enemy. There is the argument that anyone with debt benefits from inflation, but more so from wage inflation than house price inflation. Link to comment Share on other sites More sharing options...
loraward Posted May 19, 2015 Share Posted May 19, 2015 I would think that anyone with assets would benefit from inflation, as a general rule. But if my asset (house) goes up in value so does every other house. If my house goes from £200K to £400K The bigger and better house down the road, will go from £400K to £800K, whilst mine was only worth £200K I only need another £200K to buy the better house, after mine as grown in value to £400K I then need another £400K to buy that same bigger house. Link to comment Share on other sites More sharing options...
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