Thank you for the detailed reply.

I am holding my opinion under review when I gather more information.

However, realizing that we are moving on to somewhat other issues, one thing that stood out to me in your reply was: "Low inflation is, of course, preferable for the lending class as it keeps the value of the money high".

Now, that, of course, is true. However, when we consider alternatives I think low inflation is valuable for most other people as well.

For example, I am able to save a little money every month against a rainy day or in order to purchase something expensive and avoid taking credit. If there was high inflation, the value of my work would depreciate quickly, and I could only buy things I can afford at the amount of a single paycheck or two.

Likewise, if I save some money in advance to have some security for when I fall ill or for my old age, once again with high inflation my effort becomes progressively more difficult, the longer I try to plan ahead, the more frugal I am.

So, unless you happen to be so poor that you can't have any savings at all (and in this case I think the problem is the level of renumeration rather than inflation or lack of it), you seem to benefit by lower inflation despite hardly being able to be called "lending class". Although, as soon as you keep your savings in a bank and invest them in any deposits or funds, you ARE in fact part of the lending class.

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True of course. One element that is important to bear in mind though is that the lending class can produce inflationary pressures precisely in those areas which they benefit from (housing for example); thereby ensuring a stable, high revenue stream for themselves. Higher inflation can also inflate debt away - sometimes a necessary tactic when the burden of debt is too great to bear.

To briefly summarize my position: if the lending class were not able to create money as debt ex-nihilo, I would probably not be so bothered by this whole affair, and would rather see it as the endless tussle between creditors and borrowers.

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> if the lending class were not able to create money as debt ex-nihilo,

Forgive my ignorance, but isn't this similar to banks under government control being pushed to print more money (raise inflation)?

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Interesting question :) The difference, I think, is the mechanism used and the sector in which inflation is occurring. In the current state we have now, there is no debt-free printing press. Instead the money is created and loaned as debt into one particular area (bank mortgages dwarf other types of bank loans, at least in the UK). This is, possibly, one reason we have the CPI (not including house prices) and the RPI as a measure of inflation. The aim, by the way (IMHO) isn't necessarily to inflate house prices, but keep the prices high (for obvious reasons). If there is inflation in the sector, it can be controlled by the banking sector, and it is not detrimental to their activities as it creates their main revenue stream.

Re govt. collusion, some commentators in the UK have attributed the Conservative party's recent victory down to their role in re-inflating the housing market through their right to buy (or help to buy - I can't remember) schemes. Property owners (or mortgage holders) feel richer when house prices rise.

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