Friday, May 18, 2007
While the rich get richer!
Independent: Falling pay awards help Bank in inflation battle
The Bank of England was handed some much-needed good news on inflation today as figures revealed that pay settlements are falling.
The average pay award in the three months to the end of April was 3 per cent, down from the eight-year high of 3.5 per cent recorded in the first quarter of the year, according to the pay experts Industrial Relations Services.
Posted by tyrellcorporation @ 11:00 AM (327 views) Add Comment
12 Comments
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1. tyrellcorporation said...
It's official then. People (especially those who traditionally vote Labour) are getting poorer by the day. With surging costs of living - by all accounts at around 7% per annum - falling wages, reduced pensions, working longer hours and more years, the picture is pretty bloody bleak for most people. This is one of the main reasons why house prices are engineered to always go up. If people are making money (theoretical or otherwise) from their houses they might not actually notice how their real incomes are falling.
IMHO the main effect of globalisation will be that poorer countries will get richer but rich countries workers will get poorer (in an effort to compete) - ultimately reaching something broadly in equilibrium. The ruling classes and financial elite will however be in an incredible position to profit from this process.
Do these figures really mean inflationary pressures will ease? I don't think so because most people's spending power is now, more than ever, detached from their actual income. The massive increase in the availablilty of cheap credit will keep prices rising for the foreseeable future (especially with the Japs stuck at 0.5% IRs).
2. Rickyb said...
Assuming M4 money supply continues to grow at 12% with no corresponding increase in the UK's energy consumption, I predict that RPI inflation of 10% within the next 2-3 years is a distinct possibility.
3. Andy said...
tyrellcorp.
Easy on the smooth transferal to equilibrium - this will be " the richer countries workers will realise that they and there children will not afford what there parents and grandparents could " as opposed to - "the poorer countries will realise that they and there children will be able to afford what there parents and grandparents could not"
When you consider this the equilibrium will not exist - the richer countries will become more violent and unstable sucked into a downward spiral of despair and the poorer countries will become pacifated and stable on a upward thrust of renewal and hope.
4. waitingfor hpc said...
wait and see.... how can people dictate wages with unemployment going up? I have foreign workers knocking at my door.
inflation is not contained .... money supply is the root cause and that is now on the radar and will dry up. IR's are now 5.5% , still low but getting better.
let the meat cook properly we don't want any food poisoning when we feast on cheap houses later.
5. shipbuilder said...
I agree, Tyrrellcorporation, except for one wee bit - now that the world is effectively governed by corporate interests, when predicting the future one should simply ask - 'what scenario will maximise the corporations growth, monopolisation and profits?' The answer to your globalisation question in this case, depressingly, would be more likely to be poor countries workers staying poor and rich countries workers getting poorer. Dissent is simply quashed by keeping the workers in debt with the illusion of wealth - most effectively done by promotion of house ownership. Does this scenario look familiar?
6. dohousescrashinthewoods said...
Hope this isn't too off-topic, but on the theme of the rich getting richer, just seen a shocking post at http://oftwominds.com/blog.html - "The Moon's a Balloon--And About to Pop"
A while ago, it was noted in a posing here that US insiders are selling shares at an astonishing rate and that the media is hyping the stock market to make this possible. For anyone who doesn't believe that something is about to happen, this is a sobering read. He lists 11 industry sectors where people are selling and only one where people are buying - "consumer durables" at 2-1 (buy-sell).
The least-sold sector is Finance at 1-2 and the highest are Media at 1-1000 and business services at 1-800. On average, across all 12 sectors, for every one share bought, insiders are selling 250. (my calculations based on his numbers)
Them that know are getting out as fast as their brokers' legs will carry them - 250 times as fast, on average. I think I will liquidate my stocks and shares ISA and see what happens next.
7. sold 2 rent 1 said...
DoHouses,
Firstly, don't be afraid to post any topic you think relevant.
This HPC will be lead by international events - whether it is Eastern European currency crises, China stocks crash, or a US recession.
Secondly, great posting.
You should have posted this article in its own thread.
I remember that previous article you mentioned (‘cos I posted it in Dec 2006)
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/07/cnshares07.xml
The key quote here was “the balance of sellers to buyers was the highest since at least January 1987”
It looks like the lead time from bosses selling to the crash was 9 months.
This sets the most likely month for a crash to be September and with a broader range of August to November.
8. sold 2 rent 1 said...
DoHouses,
Regarding your ISA shares....
How about transfering them to a UK Gilts and Fixed income unit trust.
Then after the crash into a gold unit trust. This is my plan to keep any profits from gold tax-free.
9. dohousescrashinthewoods said...
Gilts to gold sounds good, I'll see if I can do that. I want to move from Standard Life to a different provider.
Interesting time-frame - it fits with the sense of things starting to fall appart in the second half of this year.
I tried posting it in its own thread, but I have posted that blog before and it flagged it as a duplicate, so I thought I would mention it here.
I checked my calculations and consumer durables are not in fact being bought, they are being sold at 1-5 and finance is actually being sold at 1-50. No sector is registering a net buy from insiders. The average ratio is 1-276.
10. sold 2 rent 1 said...
DoHouses,
I use Fidelity through the broker BestInvest.co.uk to hold my ISAs.
They have hundreds of funds that you can switch in and out of easily and all online.
11. dohousescrashinthewoods said...
Thanks, I'll give them a go.
12. Weycresto said...
The rich are only getting richer through the smoke and mirrors of massive asset inflation. It might as well be monopoly money.