Interest rates and inflation.
Discussion
Saw this quote on another forum.
"So my predictions are rampant inflation, your savings wont be worth a fraction of what they are now, and significant interest rate rises forcing many to sell up their houses"
"Its worth noting that the Bank of England has moved the pension fund for its own employees totally into inflation linked bonds, if this doesnt tell you the way things are likely to pan out nothing will"
Thoughts?
"So my predictions are rampant inflation, your savings wont be worth a fraction of what they are now, and significant interest rate rises forcing many to sell up their houses"
"Its worth noting that the Bank of England has moved the pension fund for its own employees totally into inflation linked bonds, if this doesnt tell you the way things are likely to pan out nothing will"
Thoughts?
Edited by Elroy Blue on Monday 7th December 15:15
Elroy Blue said:
Saw this quote on another forum.
"So my predictions are rampant inflation, your savings wont be worth a fraction of what they are now, and significant interest rate rises forcing many to sell up their houses"
"Its worth noting that the Bank of England has moved the pension fund for its own employees totally into inflation linked bonds, if this doesnt tell you the way things are likely to pan out nothing will"
Thoughts?
Sounds a bit like someone looking at microscopic detail and then working out everything else from it."So my predictions are rampant inflation, your savings wont be worth a fraction of what they are now, and significant interest rate rises forcing many to sell up their houses"
"Its worth noting that the Bank of England has moved the pension fund for its own employees totally into inflation linked bonds, if this doesnt tell you the way things are likely to pan out nothing will"
Thoughts?
Edited by Elroy Blue on Monday 7th December 15:15
Much like someone saying that average engine sizes in cars have increased from 1.6l to 3.0 l in the last 20 years (for example), which obviously means that in 2050 we'll all be driving cars with 12litre engines.
If inflation and interest rates shoot up, then savings won't be worthless because they'll be earning interest at the higher rate
You pay a large risk discount for the inflation linking. On the other hand most commodities will move with inflation, add in cost of resourcing, constrained supply and they should out perform cash & inflation linked bonds etc.
Other asset classes perform differently with inflation, but cash is obviously one of the worst. Especially cash from a failed state like Brit.. I mean Zimbabwe for example.
But sure if you want to be sure you can keep your cash and not lose it, then link it to inflation. Just dont expect it to outperform much.
Other asset classes perform differently with inflation, but cash is obviously one of the worst. Especially cash from a failed state like Brit.. I mean Zimbabwe for example.
But sure if you want to be sure you can keep your cash and not lose it, then link it to inflation. Just dont expect it to outperform much.
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