Thursday, Dec 13, 2007
Inflation to give bank a headache.
Telegraph: UK inflation expectations soar to a record
UK inflation will be causing the BOE one very big headache as pumping money into the system makes no difference.
Posted by doomberger @ 06:51 PM (170 views) Add Comment
1 Comment
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Fulhamfrankie said...
Pumping money into the system simply sells off ownership of the country or dilutes our existing money.....think about it.....the capitalisation of UK PLC is Y...you have X in your pocket......now the BOE pumps in Z. Option 1 is to borrow Z from "Another Country PLC" in which case we need to pay back Z over time with interest above considered inflation (basic business practice) or Option 2 is that it simply creates Z out of thin air.
The effect of Option 1 is that the money needs to be paid back with interest which in effect shrinks the capitalisation of UK PLC (Remember the country, good or bad is owned by the people in this country)
The effect of Option 2 is that the money in your pocket is now worth X/(Y+Z) ie less than before. ie you lose
Either way you the shareholder in UK PLC get screwed.
Who wins...guess...but, unless you are a self serving mean spirited money grabber, it is not you
The solution.
We should stop printing money, suffer the pains caused by the mean money grabbing people in this world and set in law basic common sense regulation (honestly it is really simple when you cut out the mean spirited money grabbing people). Then we would have a better handle of how big UK PLC is, what the true cost of something is and hence we will all get a better understanding of "value". With a better understanding of the "value" of things (takes a while but it will be worth it).
Inflation is caused by Banks printing money.......it is a bad thing