Good in the sense that it drives the real interest rate down – which is nice since we are net debtors.

Don’t get me wrong, global hyperinflation would be a fools game – were everyone loses. But in a situation of insufficient demand lower real interest rates help – and given our position as net debtors it also provides a positive income transfer relative to the counterfactual.

Awesome!!!

No doubt it is going to be an exciting time – will give us plenty to write about 😉

“Steady on, it’s not that bad. In terms of efficiency, consumption tax > tariffs > income tax.”

Bastards is a gentle ribbing term – I use it to describe anything that is mildly irritating, such as a fly that just won’t leave the room.

“And you’re right that it’s a matter of when, not if.”

Hehe – nice twist on my words there.

I have an unjustifiably high level of faith in the ability of our independent central banks to control inflationary pressures – the reason for this is that, when it doesn’t happen, I can immediately just blame them, rather than having to look for some other excuse 😉

Steady on, it’s not that bad. In terms of efficiency, consumption tax > tariffs > income tax.

“it is only when inflation starts kicking in that they get irritated”

Definitely, because they are a nation of savers. And you’re right that it’s a matter of when, not if.

“Remember that until recent history tariffs were seen as a perfectly reasonable way for governments to raise revenue, given the relative difficulty of policing income taxes.”

Those bastards.

“The Chinese government might have a problem with this though. And they don’t really seem like a ‘forgive and forget’ sort of bunch.”

Ahhh, but if they are pegging their currency to everyone elses there currency relatively devalues as well – so it is only when inflation starts kicking in that they get irritated. So they don’t mind the AD businesses – it is just real interest rates.

If we have truly independent central banks we shouldn’t need to worry about this. And if we don’t, this could be a constraining factor on government intervention to devalue their debt. Either way – I’m still happy as long as we don’t end up with a trade or military war.

“And if they it doesn’t, we are pretty much saying that the countries that lent so freely during the past decade will suffer for not taking account of risk – to be honest I have little problem with this.”

The Chinese government might have a problem with this though. And they don’t really seem like a ‘forgive and forget’ sort of bunch.