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Inflation? Sterling crisis? Bloomberg Article Merged Thread

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I think the link below explains very well how the currency event will come around that ultimately will give us inflation in this country, invest in assets now because inflation is coming very soon !

Everybody keeps saying i dont see house prices rising or assets increasing in value hence we must have deflation. This is not correc,t if the currency devalues , whoosh inflation or even hyperinflation hits us !!

http://www.bloomberg.com/apps/news?pid=206...id=aptnrMueIerQ

“I don’t think the U.K. is going to default,†Ferguson says. Still, debasing the currency has some of the same effects as defaulting on interest payments, he says, because it erodes the value of the money the government uses to repay its creditors.

The current crisis has stirred memories of 1976, when sterling collapsed and the U.K. had to borrow from the IMF. Meghnad Desai, emeritus professor at the London School of Economics and a Labour member of the House of Lords, says the situation is far less perilous this time because many other countries have heavy debts and face similar recessions.

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I think the link below explains very well how the currency event will come around that ultimately will give us inflation in this country, invest in assets now because inflation is coming very soon !

Everybody keeps saying i dont see house prices rising or assets increasing in value hence we must have deflation. This is not correc,t if the currency devalues , whoosh inflation or even hyperinflation hits us !!

http://www.bloomberg.com/apps/news?pid=206...id=aptnrMueIerQ

“I don’t think the U.K. is going to default,†Ferguson says. Still, debasing the currency has some of the same effects as defaulting on interest payments, he says, because it erodes the value of the money the government uses to repay its creditors.

The current crisis has stirred memories of 1976, when sterling collapsed and the U.K. had to borrow from the IMF. Meghnad Desai, emeritus professor at the London School of Economics and a Labour member of the House of Lords, says the situation is far less perilous this time because many other countries have heavy debts and face similar recessions.

I certainly hope Meghnad Desai, Labour member of the House of Lords, is right when he says it's different this time. :o

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I certainly hope Meghnad Desai, Labour member of the House of Lords, is right when he says it's different this time. :o

Sadly, he's just a mentalist.

A total lack of credible others to borrow from when you need more money is much, much worse than having lots of wealthy folk about you can bum cash from.

Picture of a nuke goes here -

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The state of the U.K. economy fills British financial historian Niall Ferguson with foreboding. “The probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,†the Harvard University professor says.

But Brown says spending will rise every year!

How can this be?

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The thread title nails it, inflation is a currency event, it isn't driven by wages but it is coming at some point. If there is a relationship between inflation and wages it's only that inflation exerts upward pressure on nominal prices in general, nominal wages being a price will therefore come under upwards pressure from inflation but that may or may not result in actual nominal wage rises because all other things are decidedly not equal at this point in time.

Real wages are of course going to drop pretty much whatever happens.

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The thread title nails it, inflation is a currency event, it isn't driven by wages but it is coming at some point. If there is a relationship between inflation and wages it's only that inflation exerts upward pressure on nominal prices in general, nominal wages being a price will therefore come under upwards pressure from inflation but that may or may not result in actual nominal wage rises because all other things are decidedly not equal at this point in time.

Real wages are of course going to drop pretty much whatever happens.

Wages already have dropped. Ask those who've a) lost their job B_) work for BA c) are contracting on rates down 40%. Question is, how far will it all go?

Edited by Trampa501

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Contractor rates have halved anywhere outside of London and even then they are 2/3's are 2006 daily rates for just about every skill set with project managers being hit hardest.

Sorry to be dim, but does this basically mean now would be a bad time to move money into sterling ? Am concerned I may need a large sum but it's all we have so if waiting will be beneficial I can wait.

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Wages already have dropped. Ask those who've a) lost their job B_) work for BA c) are contracting on rates down 40%. Question is, how far will it all go?

I know they've dropped, I lost my job myself already. I'm expecting wages drop a lot further but am at least fortunate in having not got caught up in the boom. Heavy debt is going to be a killer for many.

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I think the link below explains very well how the currency event will come around that ultimately will give us inflation in this country, invest in assets now because inflation is coming very soon !

Everybody keeps saying i dont see house prices rising or assets increasing in value hence we must have deflation. This is not correc,t if the currency devalues , whoosh inflation or even hyperinflation hits us !!

http://www.bloomberg.com/apps/news?pid=206...id=aptnrMueIerQ

“I don’t think the U.K. is going to default,†Ferguson says. Still, debasing the currency has some of the same effects as defaulting on interest payments, he says, because it erodes the value of the money the government uses to repay its creditors.

The current crisis has stirred memories of 1976, when sterling collapsed and the U.K. had to borrow from the IMF. Meghnad Desai, emeritus professor at the London School of Economics and a Labour member of the House of Lords, says the situation is far less perilous this time because many other countries have heavy debts and face similar recessions.

Strongly disagree.

£ will not collapse.

Back in march, a few punters on HPC were talking about dollar parity, and LONDONBOLLOXMAN was predicting 1 Euro would buy £1.25 by the end of the month - remember that? :rolleyes:

What, we are supposed to start trembling and shivering because Niall Ferguson -a historian- is trying his hands at economics?

“The probability of a real sterling crisis is around one in three", wow that's great Niall, thanks a lot.

Since when does having a PHD in history automatically make you right? oh, wait :ph34r:

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Just because a currency loses strength, it doesn't automatically mean pay rises all around. Many would like a Ferrari to cost a month's wages, but it won't happen.

Sure, you may get poorer as everything you want to buy gets more expensive, but that doesn't mean house prices are going to shoot up. In fact, I would argue the opposite.

It can even be said that easy credit caused high inflation in house prices, so maybe deflation is due? Much depends on how much printing they decide to do as this could well lead to wage inflation. If that happens, however, we could have much bigger problems to worry about (namely, the price of everything else rising even quicker).

Whether Sterling loses strength and what this is against is another question. More pressing in my mind is high fuel prices rippling through to prices of goods across the spectrum, including food and heating.

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Strongly disagree.

£ will not collapse.

Back in march, a few punters on HPC were talking about dollar parity, and LONDONBOLLOXMAN was predicting 1 Euro would buy £1.25 by the end of the month - remember that? :rolleyes:

What, we are supposed to start trembling and shivering because Niall Ferguson -a historian- is trying his hands at economics?

“The probability of a real sterling crisis is around one in three", wow that's great Niall, thanks a lot.

Since when does having a PHD in history automatically make you right? oh, wait :ph34r:

the probability of a currency crisis is about 1 in 1

dont know what history Niall has been studying but he needs to study some more

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the probability of a currency crisis is about 1 in 1

dont know what history Niall has been studying but he needs to study some more

oh please don't try to turn this into another gold ramping thread... :rolleyes:

You make a great joke with Laura on another thread, then come here and spoil it ;)

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Strongly disagree.

£ will not collapse.

Back in march, a few punters on HPC were talking about dollar parity, and LONDONBOLLOXMAN was predicting 1 Euro would buy £1.25 by the end of the month - remember that? :rolleyes:

What, we are supposed to start trembling and shivering because Niall Ferguson -a historian- is trying his hands at economics?

“The probability of a real sterling crisis is around one in three", wow that's great Niall, thanks a lot.

Since when does having a PHD in history automatically make you right? oh, wait :ph34r:

My view on this is that it could go either way. There really is a huge amount of uncertainty over this one.

If you look at interest rates on gilts, according to the BBC website the interest rate on a gilt redeembale in 2055 is a paltry 4.29% Certainly the market isnt expecting a great deal of inflation.

And the market usually knows best. Which is quite humbling for us mortals, as we all know the market is sometimes spectacularly wrong. It is possible that this government might yet engineer us some good old fashioned inflation. Personally I hope they do, that is what we need right now. I personally fancy a bit of wage inflation.

Trouble is with making predictions is that you can get some real egg on your face. Was it Jim Rogers who recently said that the 'pound is finished', nailing the bottom almost to the moment? And wasnt it business week who declared the "Death of Equities" right at the start of the equities boom in the early eighties?

Niall Ferguson might well be right, but if he is I will put it down as a lucky guess.

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My view on this is that it could go either way. There really is a huge amount of uncertainty over this one.

If you look at interest rates on gilts, according to the BBC website the interest rate on a gilt redeembale in 2055 is a paltry 4.29% Certainly the market isnt expecting a great deal of inflation.

And the market usually knows best. Which is quite humbling for us mortals, as we all know the market is sometimes spectacularly wrong. It is possible that this government might yet engineer us some good old fashioned inflation. Personally I hope they do, that is what we need right now. I personally fancy a bit of wage inflation.

Trouble is with making predictions is that you can get some real egg on your face. Was it Jim Rogers who recently said that the 'pound is finished', nailing the bottom almost to the moment? And wasnt it business week who declared the "Death of Equities" right at the start of the equities boom in the early eighties?

Niall Ferguson might well be right, but if he is I will put it down as a lucky guess.

:lol:

High inflation leading to hyperinflation is 100% guaranteed. It's the same level of uncertainty as the case for saying the sun will rise tomorrow.

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I put the probability of dunderheads with recent publications out opening their yap whilst on the literary publicity trail and grabbing whatever approximation of Warhol's fifteen seconds they can as at around lim(1/x) x->0 (from the right hand side, obviously).

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I put the probability of dunderheads with recent publications out opening their yap whilst on the literary publicity trail and grabbing whatever approximation of Warhol's fifteen seconds they can as at around lim(1/x) x->0 (from the right hand side, obviously).

:lol::lol::lol:

+1

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Sadly, he's just a mentalist.

A total lack of credible others to borrow from when you need more money is much, much worse than having lots of wealthy folk about you can bum cash from.

Picture of a nuke goes here -

Buy Injin, you said we would have hyperinflation in June. Today is the last day of June and no hyperinflation.

Edited by weebag

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Buy Injin, you said we would have hyperinflation in June. Today is the last day of June and no hyperinflation.

I did indeed say that the US would be in hyperinflation in June.

What's their money supply at?

You also have no credibility.

I never claim any. I'm just some random on the internet.

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Sadly, he's just a mentalist.

A total lack of credible others to borrow from when you need more money is much, much worse than having lots of wealthy folk about you can bum cash from.

Picture of a nuke goes here -

ROFLMAO.

You still the man...

Nick

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Guest Parry

No brain, so no proper title, glad I've got a spell checker. Blah, blah . . .

This looks fun!!

http://www.bloomberg.com/apps/news?pid=206...id=aptnrMueIerQ

�€œThe probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,�€� the Harvard University professor says.

Andrew Bosomworth, a fund manager in Munich at Pacific Investment Management Co., agrees with Ferguson that a weakening of the pound is likely. �€œIn a worst-case scenario, there could be a run on the currency,�€� he says.

The price of credit-default swaps on U.K. sovereign debt has surged as investors try to protect against a deterioration in creditworthiness. The cost of the five-year contract rose to 81 cents per $100 of insured debt on June 26 from 14 cents a year earlier.

�€œThis kind of red ink implies both spending cuts and tax hikes that could make the 1980s look like a teddy bear�€™s picnic.�€�

Edited by Parry

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No brain, so no proper title, glad I've got a spell checker. Blah, blah . . .

This looks fun!!

http://www.thaivisa.com/forum/redirect.php...%3DaptnrMueIerQ

⦣8364;œThe probability of a real sterling crisis is around one in three, and the probability of major tax hikes and cuts in public spending is roughly one in one,⦣8364;? the Harvard University professor says.

Andrew Bosomworth, a fund manager in Munich at Pacific Investment Management Co., agrees with Ferguson that a weakening of the pound is likely. ⦣8364;œIn a worst-case scenario, there could be a run on the currency,⦣8364;? he says.

The price of credit-default swaps on U.K. sovereign debt has surged as investors try to protect against a deterioration in creditworthiness. The cost of the five-year contract rose to 81 cents per $100 of insured debt on June 26 from 14 cents a year earlier.

⦣8364;œThis kind of red ink implies both spending cuts and tax hikes that could make the 1980s look like a teddy bear⦣8364;™s picnic.⦣8364;?

The price of credit-default swaps on U.K. sovereign debt has plummeted as investors get bnored of trying protect against a deterioration in creditworthiness. The cost of the five-year contract fell to 81 cents per $100 of insured debt on June 26 from 170bps at the start of the year

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FAIL

They don't realise debt is wealth.

I don't understand how you can possible take any of these opinions seriously when they fail to grasp the new paradigm.

I can't wait until my house is worth £1.38bn then I can take out all the equity and go on one massive spending spree buying crap that I don't need.

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Guest Parry
The price of credit-default swaps on U.K. sovereign debt has plummeted as investors get bnored of trying protect against a deterioration in creditworthiness. The cost of the five-year contract fell to 81 cents per $100 of insured debt on June 26 from 170bps at the start of the year

So is that good or bad or what, Noel?

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