Coronavirus

[jfman]

Originally Posted by OLD BOY

You tell me. You are the economist.

Spoiler alert: there isn't one.

Countries get by making interest payments and borrowing more to pay off the capital amounts down the road.

[papa smurf]

Originally Posted by jfman

What's the current repayment plan on the £2 trillion of debt we've got so far?

You're the economist,i'll leave it you to work out just keep your mitts of pensioners.


and beer.

[nomadking]

Originally Posted by jfman

Spoiler alert: there isn't one.

Countries get by making interest payments and borrowing more to pay off the capital amounts down the road.

Until they get to the point like Greece, Ireland, Spain, Portugal, Cyprus did, and you can't borrow any more.

[jfman]

This is where a Central Bank comes in handy.

[papa smurf]

Originally Posted by jfman

This is where a Central Bank comes in handy.

We're shut.

[Mad Max]

Originally Posted by papa smurf

You're the economist,i'll leave it you to work out just keep your mitts of pensioners.


and beer.

A huge for that one.

[OLD BOY]

Originally Posted by jfman

Spoiler alert: there isn't one.

Countries get by making interest payments and borrowing more to pay off the capital amounts down the road.

We can just forget what we need to pay back then.

[jfman]

Originally Posted by OLD BOY

We can just forget what we need to pay back then.

You've clearly misunderstood the post if that is your reply. Try again.

[nomadking]

Originally Posted by jfman

This is where a Central Bank comes in handy.

The governments of Ireland etc, COULDN'T borrow. They ran out of money.
Link

Ireland had already exhausted all other avenues of funding: “We had already raided the pension fund and borrowings on the sovereign bond markets – which we were priced out of – in 2010,” Namawinelake explains so the option considered to be the best in the circumstances was to issue a promissory note.

The repayment works like this: The government pays the money to IBRC, which gives it to the Central Bank of Ireland, which then destroys this money. This is done electronically in case you were thinking they were burning a huge wad of €100 notes on Dame Street.

[jfman]

Originally Posted by nomadking

The governments of Ireland etc, COULDN'T borrow. They ran out of money.
Link

Countries in the Eurozone don't have the same luxury

Originally Posted by OLD BOY

I think we are, Steph. But we haven’t been called upon to serve.

Dunning-Kruger Effect in action...

[jfman]

Originally Posted by OLD BOY

We can just forget what we need to pay back then.

I'll explain it simply.

I borrow £100 from Mick for 10 years. Interest is £1 a year (which I pay each year), however inflation reduces the real terms value of my debt by £2 a year.

In 2030 I borrow £100 (which is only worth £80 in 2020 prices) to repay Mick from Paul and carry out the same wheeze.

Rinse and repeat until by 2070 I'm looking around for the 2020 equivalent of about £25 to repay Maggy., Who I borrowed from in 2060. The debt has cost me £10 each decade to maintain. Total cost less than total borrowed in real terms.

Obviously interest rates and inflation are percentages but the principle applies where inflation exceeds interest rates - which is pretty much going to be forever now because we can't afford the house price crash bringing the whole pozni scheme down.

[Mad Max]

Originally Posted by Hugh

Dunning-Kruger Effect in action...

[nomadking]

Originally Posted by jfman

Countries in the Eurozone don't have the same luxury

Those countries WERE in the Eurozone and they still had problems.

[jfman]

Originally Posted by nomadking

Those countries WERE in the Eurozone and they still had problems.

No that's my point they don't have the same range of freedoms in controlling monetary policy for their needs.