And at the same time the USD is being subjecting to huge amounts of QE

All which means that the prices of everything will go up while wages stagnate

Slap my hand, I just saw the headline

The OECD and IMF recommends that the ECB start QE.

The ECB already has been QEing. They did it through buying lots of debt from Southern Europe with new money

None of this is good news for anybody. It simply means that everyone will have to work harder for much less

I know that should happen in theory but the BOE have been QE'ing massively for years now and inflation is still remaining low.

Inflation is still running at a much higher rate (3%) than any savings account will give, and at six times the rate of the Bank of England's interest rate (0.5%).

In 1 year that doesnt matter much, but over a course of 5 or 10 years then peoples savings (and wages) could have lost 20-30% in real terms

True. I'm old enough to remember the bad old days of the '70s, anything up to 25%. Now that's what I call inflation...

You're obviously too young to remember 24% inflation in the mid-seventies or paying 15% on a mortgage in the eighties.

I know which time period I prefer.

It actually doesnt matter if inflation is at 24% as long as wage inflation is also at 24% - and if you can get a 24% back from your savings and investments

I dont know if this was the case in the 70s or not. The point is that it is the relative inflation and interest rates that matter, not the absolute ones

I don't recall what savings rates were in those days, but I do remember getting 25% pay rises for a couple of years. To be honest at that time I never noticed any difference as we had no kids until later, so we had plenty of cash.

I also remember the 80's when Lawson scrapped double taxation relief for new mortgages, but with about 2 months notice, so prices rocketed. Then base rate went up 2% to 15%, that was painful, because at that time mortgages were generally linked to base rate.

This was the top of the housing boom at that time. Houses were literally sold the same day. I remember buying a house for £110k. Five months later they were £140k. Then base rate went up, and 7 years later I sold it for £85k. Ooh that sounds familiar.

+1

It's a hobsons choice but give me QE anyday over the mid seventies cr@p we had to go through.

Hmmmm

Inflation is only low if you do as the BoE does

i.e. not count things that increase in price and "adjust" the prices of those that you do count.

Basically they reduce the price increase you pay for an Iphone to adjust for the extra functions on that phone compared to your old Nokia. (Functions that 99 per cent do not want, and 95 per cent do not use).

Oh hang on, those numbers are too high. Lots of teenagers want them, so make that 69 percent and 65 percent.

See how it works?

Well my savings are at 5% and I might just add to them again next month

Oh the joys of living in Gib.

Little wonder the Spaniards are green with envy.

Just wait till you put a team together to stuff them at football.
I'm sure money is no object.

Bank deposit rates then were about 11-12%, so the relative inflation was horrific, which makes todays figures, while lamentable, piddling in comparison. The erosion in savings you forecast in your earlier post in 5 to 10 years time happened in one then.

At the time Margaret Thatcher(GBYM) suggested using savings to buy a full cupboard of tins of food and other non-perishable items as a hedge against inflation. This horrified the Socialist-Communist alliance in power at the time, who regarded it as hoarding, but struck a chord with housewives who voted her into power at the next election.

But you try telling the young people of today that, and will they believe you ?