Thursday, Jul 16, 2009
Three reasons to worry!
Times Online: Don’t worry about rate rises, fear stagflation
There seem to be three widely-feared threats to the British and world economies that are not worth worrying about and three others that are definitely ominous.
Posted by tim miller @ 12:10 AM (519 views) Add Comment
4 Comments
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1. bidin'matime said...
"Before proceeding, let me issue a health warning. This time last year, I failed to see the global catastrophe about to be triggered by the collapse of Lehman on September 15."
Some refreshing honesty from Anatole...
2. growler said...
Possibly followed by an article next year...
"Before proceeding, let me issue a health warning. This time last year, I failed to see the sterling crisis about to be triggered by the inability of UK Government to sell its debt"
3. uncle tom said...
Kaletsky admitting a mistake! - whatever next..
He then beautifully hedges his bets, by saying that inflation is not a threat, but, well, err, actually, it is..
I see China and India emerging from the doldrums very quickly, and with several times the developed world's population between them, that implies a very big thirst for oil and other commodities, as their economies grow.
It also seems logical for them to take the view that if they are to be paid with IOU's in a depreciating currency, the least they should expect is more of them.
An interesting thought is to consider this - if the prices of all Chinese goods doubled, how much trade would they lose? Quite a lot would be lost to India; but if India and the other sweatshop states also doubled their prices, what then?
Doubling prices of manufactured imports would see very little industry become economic in the UK, so our trade deficits would rocket, and sterling would fall further. The US, on the other hand, would see a manufacturing renaissance sooner, and would be less severely affected.
That is the real inflation threat for us.
4. peeping tom said...
Could the German electorate vote to withdraw from the Euro, re-establish the DM and let the Euro collapse?