Scrapping non dom status

[Oliver Hardy]

ATM said:

I've not been living under a rock, thanks. I have however been educating myself as to the how the effects of money printing show up in an economy. You have clearly been busy believing any and all garbage pumped your way. So now you can tell me we have had no inflation, yes I know that's the story you have been told and you clearly believe it. You don't need to tell me that's the only possible truth here. Sometimes you need to think for yourself. Europe had negative interest rates. Do you think this didn't cause inflation because that's what you were told.

We import lots of stuff from China right. The prices of these items has been trending down for years and years. Yet the government says we have had no inflation. They have managed to save us from the dangers of deflation by printing more and more money. So if China makes stuff cheaper the government protects us by printing lots and lots of money, maintaining super low interest rates, getting the BoE to buy up lots of our government debt and telling us the economy is fine. And you believe all this. Perfect.

Now consider a scenario where China decides to no longer support us by maintaining cheap prices. They decide to let their currency strengthen. They stop buying lots and lots of debt from Us which was previously weakening their currency. This means all the stuff we import from China now gets more and more expensive. How will the government react to this? They could protect us from the dangers of deflation by printing money. But actual inflation in goods we buy from oversees they have no answer for. They could try to strengthen our currency as China strengthens theirs but that would mean increasing interest rates while we already have a debt to GDP ratio over 100% and we can't afford to pay the interest on this debt with higher and higher rates.

I will give you another possible scenario to consider. Let's imagine AI is amazing and helps all businesses globally save 10% per year for the next 5 years. Would we see falling prices as a result? You would expect us to right. Wrong. The government thinks Deflation or falling prices is very very bad. They want us to see nice and steady inflation of 2%. Therefore if prices do starts to fall they will come swooping in to save us from this potentially destructive situation by printing money and flooding the economy with more and more cheap debt. Because Deflation is bad.

What a load of garbage nonsense. But this is what they expect you to believe. Do you believe it?

Would falling prices really be that bad?

Do you really think the supply shocks of Covid caused the inflation we are now seeing?

Negative interest rates throughout Europe for years didn't cause any inflation?

Do you really think our government has any control of global prices?

I believe inflation is just getting started. I believe prices will rise and rise and rise for the next 10 to 15 years minimum. And as countries like China realise they have a market for their goods at home and in lots and lots of other countries around the world who are starting to get stronger and consume more stuff we will be less and less important to them. Our debt will become less attractive to the rest of the world and therefore the GBP will fall and as the price people are willing to pay for our debt falls this will means interest rates go up.

Soft landing - no chance.

All we produce is debt. If we can't export our debt what happens?

The ship is already sinking. Can you see that yet?

Isn't China failing, it is facing debt itself and there seems to be a lot of unemployment, people in China don't have the money to buy the things it makes and there are other countries with cheap labour?

Isn't the USA reindustrializing and it has Mexico for cheap labour, so China will have to find markets that the USA previously filled?

Also deflation is bad because people hold off buying goods and so create recession?