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Comment by lifeisstillgood | Hacker News Reader

Never a saver be.

About five years ago, the Greek government tried to slice 6% off every Greek bank account as a once only tax. There were riots and a change of government.

The UK, over a similar period ran inflation "just above" it's target of 2%. And so sliced 11% off everybody's bank accounts anyway, and 11% off what it owed us.

Governments never pay back the capital unless thy have to.

I'm hoping inflation will eat my mortgage capital away.

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The effect of inflation eroding your funds can be eliminated by investing it effectively thought. Serious savers should be earning returns well in excess of 2%; my regular bank account pays more than inflation. Similarly competent lenders would have priced in margin on top of a 2% inflation expectation, so they'd be making a slightly smaller profit on their loan portfolios rather than a loss.

That's not the case when a governments freezes withdrawal of certain assets whilst proposing to give them a 6% haircut.

> Governments never pay back the capital unless thy have to.

Some do. See https://en.wikipedia.org/wiki/List_of_countries_by_public_de... as a starting point.

The list shows that debt is "ok" if creditors believe it'll be repaid eventually(USA,Japan). Some countries just cant afford the "cost of debt"(mostly Africa). Others are in a dire situation when creditors feel they wont get their money back(Greece).

I didn't know Japan was the country with the largest public debt.thanks.

Norway loos to be pretty interesting on that list too. As well as Finland.

Singapore, too. No natural resources, still no net public debt. (http://www.gov.sg/government/web/content/govsg/classic/factu...)

Happy to see someone makes this point. I think people assume I'm a little nuts when I try to explain that inflation is a tax.

Wasn't that Cyprus, not Greece?

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