Is it better to have one depression that fixes a lot of issues than several recessions that fix none of them, though?

Recessions are a natural part of the business cycle. Yeah, some are caused by malfunctions in the system, like this past one. But most are relatively mild, and their effects go away after a year or two. The Great Depression took over a decade to recover from. I wouldn't say that it fixed any problems in the economy either.

"their effects go away after a year or two."

Except that the last few recoveries have taken longer than they have historically.

Likely just due to the globalization of the economy. Once the major developing countries start approaching parity with developed nations, I have a feeling things will return to normal.

What would your depression fix, HR? Genuine question.

On a different note, any bets on what's going to happen to the excange rates between pounds and euro's?
At the moment I basically have the choice to exchange pounds for euro's now or later, or perhaps not at all if, for instance, I close the deals in England and spend the cash in a casino or some other not too wise way of working around exchange rates, or I might decide to move to England later which is still a consideration..

Invest in gold, bury in yard, watch out for magnets.

Personally, I think a lot of banks should have been allowed to fail, with the governments merely covering current accounts up to a certain level per person (say, 100k). I think that's the only way they'd be taught to not make the same mistakes again, which I'm certain they will 10, 20 years down the line. And as each time they do it seems to be getting bigger than the last, I suspect a depression is an inevitability.

Greece got a Depression regardless.

The Greece situation shows how the Austrian school is the best.

Indeed, it seems quite elitist to me to just save banks like that. In the Netherlands, you get your money back for up to €100k per person per bank. It might just be my skewed view, but it seems to me that protecting banks is essentially protecting the rich (more rich than a few hundred k that is, although I wouldn't exactly call that poor). They don't need protection. If they screw up, it's pretty much always because they took needless risks.

Anyone having a clue what will happen to the value of the euro though? Will euro's follow the current trend of becoming cheaper compared to pounds, or is the value of euro's going back up now?

oh yeah

That could be a reaction to a number of things..

the value of the euro will decrease against foreign currencies as long as they are in QE

I've got a different question about that now, actually. The inflation in the Eurozone is quite low, correct? Based on that fact, it seems counterintuitive to me that the value of the Euro is decreasing compared to other currencies.. The value of the Euro is inflating but the prices of European products aren't? Am I simply misinterpreting?

What am I missing?

Tell me if I'm going off-topic, but it seems quite related to me.

QE will start prices inflating in the Eurozone. It's essentially being put into production to stave off the threat of Deflation in the eurozone, and in doing so, passing it on to country which export to the Eurozone.

So now, the UK has a problem of potential deflation, and it's already done a lot of QE to very little effect.

"QE will start prices inflating in the Eurozone..."

It may keep them from deflating, but that's not quite the same as inflation. If the QE policies of the United States offer any lessons, the inflation rate won't be worrisome.

http://www.usinflationcalculator.com/inflation/current-inflation-rates/

hard asset prices will inflate in the eurozone when the QE start

So what you're saying is that the right time to start investing in hard assets is right about now?
And for someone like me who doesn't really invest but technically exports to non-Eurozone countries, the situation couldn't really be better right now?

QE caused inflation in the UK, Jeff. So it's inconclusive either way. The intention is that they WANT inflation in the eurozone, though, so they hope QE will provide it.

As large an economy as the UK is, I'd suggest that the Eurozone is much larger and more diverse and therefore able to handle QE properly. Clearly though, if the ECB goes there, they are admitting Austria-sterity was foolish.

Am I right to not want inflation personally, since I'm mostly saving money, apart from some services in both my country and abroad, but no serious investments?

Just checking if my understanding of economics matches the consensus..

If your assets (savings) aren't growing as fast as the rate of inflation, you're losing out in the long run.

These are not markets where savings accounts and fixed income do well. You need to take on risk. Equity prices as well as realestate will out preform. Fixed income people as in the elderly will suffer in the search for yield.

I know that. As such, intuitively, I'd say I would want inflation to stay low, but what I'm asking is if that intuition works in practice, since interest on savings will probably increase as well if there's more inflation for example. On top of that, inflation and conjuncture may be linked, leading to more profit for companies and an easier climate for banks as well which may cause the banks to increase interest even more.

Both views have some reasonable arguments to them, but only one of them can be best for me, my savings and my income. Just wondering which. Purely out of curiosity, since I won't invest either way and I've got no influence on European monetary policies, obviously.

That was to Jeff Kuta.

Inflation is a good thing as long it isn't too high. You want your inflation between 2-3% really. Above 3% and it's just too fast, and below 2% and there's no urgency to get people to spend (especially if you drop into deflation which is awful).

Cash is NOT a hard asset

I know this is true for the country as a whole, but what about me? That's my question. For example, you're right that low inflation theoretically means there's no urgency to spend, but at the same time ssorenn says this is a bad time for saving and I think he has a point although I can't quite figure out why that is so.

Cash (savings in this case) is an asset.

However, your (cash) savings interest should really never be greater than the rate of inflation. Banks would be losing money on you in that case. Cash is a bad place for your money when there are inflationary pressures. (But beware the gold bugs!)

If you want to have your money work for you, figure out a handful of *different* asset classes (stocks, bonds, mutual funds, metals, commodities, real estate, foreign currencies, and yes, even cash) that you'd be interested in and follow them. As things change, adjust your mix to take advantage of what you believe is the future trend within your risk tolerance.