December 28, 2008
How might each of these get affected by inflation in the 1990s?
someone e…. asked:
a. a techno freak who loves everything- from cars to hi-fi gadgets
b. a homeowner with a £70,000 mortgage
…and what about…never mind..thank you for yer time innit?
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Comments on How might each of these get affected by inflation in the 1990s?
Well A. is potentially going to spend money, and B. could potentially earn money. You figure it out from there.
a – not much, because technological improvement reduces the real price of technical gadgets. Computers, microwaves, ipods etc are cheaper now than when they were new gadgets.
b — inflation erodes the real value of debt so it helps the mortgagee. But there wasn’t much inflation in the 90s compared with the 70s so not that much of a help in the 90s.