tobsw

.... at the end of the day, what is money? Just printed paper....

OverTheHorizon

Nope, that would be "cash"...

"Money" is not quite the same thing ;}

sxc

I have no experience but I would expect a LOI to include clauses that state that the buyer has to firm up the purchase by a certain period or under certain circumstances. Probably a small penalty in there for not proceeding as well.

milkyway88

Sorry I'm slightly confused by this. Are you saying that the central banks aren't just printing money? Or are you saying that we shouldn't believe in the concept of money and that we should all go back to a bartering system?

Raffles

What I’m saying is that, if you go back a few pages, there is a view that printing money to give to BA has no effect on us as taxpayers.

However, if BA started printing unlimited Avios to hand out in a crazy promotion everyone would be up in arms about the devaluation of their existing Avios.

One of these views must be wrong.

Ldnn1

Well in theory but they're not really comparable are they.

In practice, over the past 10 years or so the printing of avios and other airmiles has indeed led to significant inflation/devaluation. The printing of money has - to the bafflement of many economists - still not.

milkyway88

It is slightly different. BA avios don't act like a true marketplace, as supply of reward seats doesn't increase with demand. BA are able increase demand for reward seats (by awarding more avios) but not increase the supply of reward seats, making avios harder to use and in effect less valuable. Added to which BA also set the value of an avios and therefore can devalue.

Whereas the BoE is only controlling the demand side (by increase money supply), then industry will expand supply to meet demand. As long as they increased demand caused by the BoE does not exceed industrial capacity (hence creating a shortage) then you shouldn't see inflationary pressure which de-values the pound in your pocket. Unlike BA with avios, the BoE doesn't directly control exchange rates, therefore can't set the value of £1.

Anyway, that's my A Level economics knowledge exhausted, I'm sure a someone who actually knows what they are talking about will correct me.