Hi doma,
What you are describing is the fact that interest rates are very low, just as inflation is almost nowhere to be seen. The reason gilt values are high is because folks trust the Bank of England and see value in its debt instruments and the income they generate relative to other asset classes.
The opposite of your hyperinflation.
Yes. And pensioners suffer the effects of deflation because interest rates decline as buyers compete to purchase reliable debt instruments.
QE is a response to the financial collapse and not its cause. Without QE, the problems of the collapse would simply have been visited on pensioners in a different form. Pensioners don't do better when the economy suffers a depression and there is no economic activity to support them.
No one is saying a condition in which QE is necessary is all wine and roses. The costs of this economy are simply being shared around. The appearance that workers were capable of supporting pensioners in the style to which they were accustomed turned out to be an illusion created by a mortgage bubble.
But what QE is intended to do, it does. And that is to prevent the problems of deflation taking hold. Which encourages investment and consumption. Which spurs economic activity. Which helps put the economy back on a path to growth. Which eventually reverses us back into a normal scenario in which inflation returns as an issue. And the normal laws apply again. Finally.
No one wishes to hurt pensioners. But no one is immune to the effects of the financial collapse. Everyone becomes poorer as a consequence.
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