Monday, Aug 27, 2007
Houseprices caught in pincer movement on two economic fronts
Finance Markets: Inflation set to surge on food prices
Two good quotes in this article sum up the downward pressure's mounting on UK house prices this autumn.
“The combination of falling supply with rising demand means the inevitable increase in food prices. As these form a core basis of the CPI in the UK for measuring inflation, we can be assured that this will encourage inflationary pressures."
“With Britain already experiencing record levels of debt, and a collapsing lending market worldwide, there is no more redundancy left in the economy to help bolster consumer spending."
Posted by enuii @ 11:43 PM (809 views) Add Comment
14 Comments
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1. Talking Rot said...
How often is the CPI review? Can we expect a lowering in the importance of food within the CPI measurement? Or is it possible that inflation figures will be allowed to rapidly increase. The cynic within me can not believe there will be a step change upwards of the same size as the drop to 1.9%
Interest rates to rise to 6% and no more with drops in the new year. Watch the engineering of the figures.
Still no decline in house prices in the UK I see. Maybe "next year" will be the "interesting year?"
2. paul said...
Assured? Nothing is assured with current statistical shenanigans! You wait - the surge in demand for popcorn following the annual Leonid shower will offset the rise in wheat ...
3. Cristiano Barbaro said...
This rubbish about rising world food demand is pure propaganda designed for the masses. Firstly world population has been increasing, but I find it very strange that it is only on the last three months (since the sock market problems began) that the media have been pushing out the rising demand in world food, as an excuse to cover the inflationary push. The reality is quite simply that as has been well documented, various hedge funds, and wall St bankers are piling money into food commodities, because they seek a safe place for their looted money when the stock market will go pear shaped. Also the biofuels bubble is contributing massively and most immorally to this too. It should be stopped, especially since the net energy balance from using corn and other food sources to make fuel is a net negative. It is no wonder that the fuel majors are behind the biofuels agri-transformation processes, they know that the process will not affect their oil related revenues in any way whatsoever, plus they get the bonus of looking green.
The future for energy is nuclear, the only feasible and truly green energy source on the planet , whether the greens and the media like it or not.
4. planning4acrash said...
Cristiano, nuclear is rediculous. We've spent over £50bn on it already and it powers only 20% of our needs (and will fall now because the current generation is at the end of its lifecycle), the cleanup of the current reactors going out of service will be over £80bn. Spend that much money on subsidising energy efficiency and you will find that it is far more economically efficient. The same is true for spending it on renewable energy. A Severn barage for example could generate about 10% of our energy needs and provide a new rail/road crossing to Wales from Somerset and apparently would cost about £10-15bn and would have a relatively low maintenance life of over 100yrs, which basically means that it will last forever, because its easy to depreciate an asset over that period to slowly save away for maintenance, whilst a nuclear power station costs way more and lasts 40yrs max. Focus on nuclear is a red herring because Uranium is starting to run out too, and all those tens of billions starve funding for renewables and, most importantly, energy efficiency. The nuclear debate is an attempt by the big energy companies to hold the British public to ransom (to control our energy supply in a centralised system and to hold the government to ransom, i.e. forcing them to fork out public money to subsidise an energy form that requires far more subsidy than any other form of energy generation. The figures above are the amount our government pays, they only put about 10million a year into solar, so imagine if they put in 50bn, given that one solar heater can cut your gas bill by 1/3 and mass roll out will reduce costs with economies of scale, for example, one for every social housing unit in the country and a massive subsidy for private purchasers (including green mortgages to cover the cost). You are right, it would cost significantly less than 50bn, far less, and they would have heaps of money left over to pay for all the other things we need to become greener, but the big energy companies would be p*ssed, because that cash would have gone to them, rather than us. And who bankrolls politicians? You got it, them, not us.
5. planning4acrash said...
Give you an example of efficiency economics. You ban incadescent light bulbs, ban standby on electronic equipment, drop VAT on A+ rated appliances and phase out those with lower ratings over a sustainable period, force developers to build naturally ventillated rather than air-conditioned buildings (they cost the same to build because the reduced cost of plant equals the extra design costs to make the building naturally ventilating). That would be free. No cost whatsoever to the government or us. And it would probably cut our electricity energy consumption by about 20%, which is funnily enough the amount that nuclear provides.
So, you've saved £50bn on not buying a new set of nuclear power stations, what do you do, you spend maybe £1-5bn on putting solar water heaters on all housing association and council homes in the land. And probably the same on subsidising them for private buyers. All of a sudden, we save 1/3 on our gas bills and electric emersion heaters are rarely used, except on a really cold day. But you have another £40bn left, so, what do you do? Well, you close down a couple of coal fired power stations and install decentralised combined heat and power stations to neighbourhoods, which save 20% on less transmission and better demand side management, and save about 50% on top of that by using waste heat to heat homes and water.
So, you've cut consumption by about 50% by now. Low and behold people have more money to spend, there's a consumer boom, and the chancellor has recieved more in tax than expected, oh, he's just made back the amount already spend, oh, this sustainability thing is a good game! I annoyed Shell and BP, but look, I have money now to finish off the sustainability job and put in a few high speed rail lines and schools, etc.
Sod nuclear, unless you want to be held to ransome by ESSO and the likes.
6. planning4acrash said...
Nuclear is an example of corporations commiting us to a new form of slavery, we have to work to pay taxes for the government to pay them to give us energy that we don't need. To link it to sustainability is the biggest lie ever, particularly given that a serious nuclear disaster in the UK would render most of the country and some of the rest of Europe uninhabitable.
7. wage slave said...
Wasn't nuclear power going to give us all free electricity when it was first pimped to the public ?
8. planning4acrash said...
That could well be the case for nuclear fusion, but nuclear fission is a waste of space, unless if you want nuclear warheads.
9. su said...
Vaguely remember hearing something on radio 4 this morning about the Govt being a bit more sympathetic and encouraging to those who wanted to go down the "green energy" path. More flexible planning permission and grants for solar panels & wind thingies. I was half asleep at the time. And if you have a large garden (plus greenhouse or conservatory) you can grow your own food. Sounds great! Now, all I need is a house....
10. Cristiano Barbaro said...
Dear P4C
I Understand your concerns, and I like your well balanced arguments. However, the argument for nuclear is quite rational and has a great deal of merit to it. TH reason why nuclear is perceived to be non green is because way back in the 1970's the greens forced the Carter administration to forbid the implementation of fast breeder reactors, which, if employed would have enabled the US, and the West by corollary to re-process spent rods and use them again and again back in the electricity producing reactors, with only 3% of effective waste (which could also be re-processed and utilised in some way). Why did the greens (in the Democratic Party) push Carter to sign a bill prohibiting re-processing in the US, with all the negative consequences that would ensue from lost advances in scientific and technical research? They did it simply, because they wanted to create the problem of what to do with the stocking of spent materials. This in order to use it as a scaremongering tactic on the masses, which has worked very well to this day.
One must realise that the philosophy behind the greens is not so much a concern for nature, as a hatred of man. It is a malthusian concept dating back to the 18th century theologist. Today the greens see man not as a sentient being, with a pshychological ability to work with nature constructively and develop ourselves for the benefit of all. They see man as an obstacle and something to be culled.
To see the actual beneifts of large scale use of nuclear technology as it should be used and encouraged, write me an email and I will send you the link.
Having said the above, I am all in favour of Photovoltaics and solar heating, and I am implementing them in my home in order to gain independence and save money. However I am the first to recognize their limits and the fact that they are no substitute for a growing world, and its energetic needs. The sustainability of our civilization depends on our ability to increase the energy use and creation per capita, not rationalising it.
11. mrmickey said...
I always have a laugh when people bang on about growing all our food organically what they fail to realise is that growing food organically is the way we grew food 100 years ago the yields would be that much poorer and we'd all starve as the population is that much greater now. Also we'd have to scrub up all the hedges and woods to increase the available farming land and that would mean bye bye to all the wildlife in this country.
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13. su said...
Organic food doesn't have to be produced on large farms. During WW2 everyone was encouraged to help the war effort by growing veg in their gardens. I gather the combined effort of lots of people making small contributions had quite an effect. Those who lived in the country would have had quite a healthy diet: fresh fruit & veg, limited meat and hardly any e-numbers. I suppose the same theory goes for power. If everyone had solar panels etc and were more careful about their use of electricity we could survive on a lot less power from nuclear power stations.
When I finally buy a house I want solar panels and possibly a wind thingy on my roof, and fruit hedges enclosing a manageable vegetable patch. Of course there's a big difference between dreams and reality, but at the moment I enjoy dreaming!
14. planning4acrash said...
Christiano, are you honestly linking Green thinking with the likes of the Luddites, pre-raphelites and the arts and crafts movement? I'm sure that Pugin and William Morris would abhore nuclear power, yet this is totally irelevant and linking of contemporary concerns about sustainability with 18th Century ideaology appears to be a leap into the dark. To base your argument on the absence of a technology that may or may not have occured appears conjectual at best. To suggest that Green's have created the nuclear waste issue just sounds rediculous.
Uranium is running out and will peak soon, it cannot be rolled out to the extend you've suggested and we only have enough for one or two at most generations of reactor, so it is not the future, fusion may be but fission isn't, and it is just as carbon hungry as natural gas combined heat and poower because of the high imbedded energy in producing and decommissioning a reactor and the massive energy needed to extract uranium. The fact is, spend £5 on an energy saving lightbulb and save £5 of electricity for 10yrs. Spend £5 on fuel/plant to produce electricity and you get £7 worth of electricity once. If £130bn spending on nuclear fuels just 20% of our needs for 50yrs, and 20% of our energy is spent on lighting, then surely it makes sense that we can do the same job with less money by getting rid of incadescent light bulbs and only having flourescent and LED's? No nuclear waste, families spend less money on electricity, and, with lower consumption, renewables can take more of the strain, oh, this is where it stops working, the poor electricity generators stop making so much money if we save energy and produce it ourselves, and they bankroll political parties, and less consumption means less taxes, bummer, lets go for the nuclear option then and somehow pin it on those touchy feely greenies!