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Realistbear

Deflation Raises Its Ghastly Head Again-factory Prices Plummet

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http://news.bbc.co.uk/1/hi/business/8189337.stm

Friday, 7 August 2009 10:51 UK

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Sharp fall in factory gate prices

A lorry leaving an industrial plant

Factory gate prices suggest consumer inflation is set to ease

The prices of goods leaving UK factories fell at their sharpest annual pace in nearly eight years last month, official figures have shown.

"Factory gate" prices in July were down 1.3% from a year ago, although they were up 0.3% from June.

The multi-trillion pound black hole continues its work.

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here here

the truth is out there - deflation

dont believe the hype - inflation

Or short term - deflation certainly

Longer term - inflationary pressures from QE and a weaker £?

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The BoE are printing money and throwing it at the banks but they cant force people to borrow and spend it.

Not when they are already upto their necks in debt.

It is not certain that QE is actually working to beat deflation.

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Or short term - deflation certainly

Longer term - inflationary pressures from QE and a weaker £?

sorry yes that is exactly my viewpoint.

i do see inflation crisis/£ crisis in the longer term

but expect to buy a house in the medium (deflationary) term with my cash

THEY WANT YOU TO THINK INFLATION IS ROUND THE CORNER SO YOU SPEND YOUR CASH

Edited by getdoon_weebobby

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Guest KingCharles1st

Why cant people see that the two things can happily run side by side.

If money is suddenly WORTH half as much- you would have to pay TWICE as much money for something of THE SAME VALUE (inflation)

BUT- that product will now be sold for LESS retail just to make a sale (deflation)

However- we are getting into an extremely edgy game now regarding factory outputs.

There is going to be a terrible culling of manufacturing about January, when all the Christmas hopefuls go to the wall because Christmas didn't happen for them.

So companies can produce less- because either they are now paying less (so many employees have told me they HAD TO TAKE A PAY CUT) this cannot do much for productivity, and if the cut ethic is introduced at all levels of manufacturing operation, then manufacturers are in a huge downward spiral. Low stock levels, service levels, worse delivery times- you name it- it's NOT GOOD. They may go to a four day week to cut costs. This however means that they can only make 80% of the product they could make - so therefore their profits must take an enormous hit-

I don't see rates and rent going down by 20% to compensate.

Low/no overheads is the name of the game now.

Edited by KingCharles1st

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sorry yes that is exactly my viewpoint.

i do see inflation crisis/£ crisis in the longer term

but expect to buy a house in the medium (deflationary) term with my cash

THEY WANT YOU TO THINK INFLATION IS ROUND THE CORNER SO YOU SPEND YOUR CASH

Thereby avoiding the recession turning into a vicious circle...

and...

ruining their election chances?

Group hug? :lol:

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Whilst on Bloomberg the same news is trumpeted with the headline:

U.K. Producer Prices Unexpectedly Rose in July in Sign Recession is Easing

Is it me or is Bloomberg reporting every single bit of news as a sign the recession is easing?

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Or short term - deflation certainly

Longer term - inflationary pressures from QE and a weaker £?

It is a question about the path as well as the final destination.

Like many, I think that there is a very high probability that deflation will happen along the path.

I am not as certain about our final destination.

Deflation is a death trap and I am not sure that zombie banks, QE and fiscal stimulus will get us out of it. Japan has been in the grips of the death trap for over a decade and we are just copying their solutions ........

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It is a question about the path as well as the final destination.

Like many, I think that there is a very high probability that deflation will happen along the path.

I am not as certain about our final destination.

Deflation is a death trap and I am not sure that zombie banks, QE and fiscal stimulus will get us out of it. Japan has been in the grips of the death trap for over a decade and we are just copying their solutions ........

thats why my longer term view is prepared to assume an inflationary outcome is highly possible

if the deflationary depression gets so bad that it is feared youll never repay the debt then i see the currency collapse/inflation it brings

but this is a long way off

injin and IRS have thought hyprinflation is going to happen tomorrow every day since as long as i can remember

Edited by getdoon_weebobby

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It is a question about the path as well as the final destination.

Like many, I think that there is a very high probability that deflation will happen along the path.

I am not as certain about our final destination.

Deflation is a death trap and I am not sure that zombie banks, QE and fiscal stimulus will get us out of it. Japan has been in the grips of the death trap for over a decade and we are just copying their solutions ........

Deflation is not bad for those who save though? :unsure:

In small doses it only punishes the indebted? :unsure:

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Whilst on Bloomberg the same news is trumpeted with the headline:

U.K. Producer Prices Unexpectedly Rose in July in Sign Recession is Easing

Is it me or is Bloomberg reporting every single bit of news as a sign the recession is easing?

A recession is a state of mind.

Tell every-one that its over, they start spending again, and hence its over.

Pretty simple really.

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A recession is a state of mind.

Tell every-one that its over, they start spending again, and hence its over.

Pretty simple really.

This only works when people are spending earned money, not funny money that the bank gave them.

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Deflation is not bad for those who save though? :unsure:

In small doses it only punishes the indebted? :unsure:

Deflation is a transfer of wealth from borrowers to savers.

Inflation is a transfer of wealth from savers to borrowers.

The largest borrower is the government so no prizes for guessing the outcome that they desire.

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Or short term - deflation certainly

Longer term - inflationary pressures from QE and a weaker £?

pound is strong

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A recession is a state of mind.

Tell every-one that its over, they start spending again, and hence its over.

Pretty simple really.

no, a recession is a statistic, one that is easily manipulated by government spending.

reality is not measurable.

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Deflation is a transfer of wealth from borrowers to savers.

Inflation is a transfer of wealth from savers to borrowers.

The largest borrower is the government so no prizes for guessing the outcome that they desire.

i desire a threesome with Megan Fox and Cheryl Cole

but will i get it?? or will the fact im an ugly barsteward (the bond markets) prevent this from ever happening ?

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i desire a threesome with Megan Fox and Cheryl Cole

but will i get it?? or will the fact im an ugly barsteward (the bond markets) prevent this from ever happening ?

Fair point.

The government have seen the movie "Indecent Proposal" and trying to see if we will follow that script .....

Edited by LuckyOne

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Fair point.

The government have seen the move "Indecent Proposal" and trying to see if we will follow that script .....

i thought it was trainspotting....total drug borrowing induced addiction.

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