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Sour Mash

More Evidence Of Deflation

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Used cars gain in value

Second-hand cars are gaining rather than depreciating in value due to a shortage in supply, an industry-wide research company has found.

CAP Motor Research Ltd, which provides valuation data to the car industry, said the usual 15%-a-year depreciation of used car prices has been reversed.

Companies delaying replacing their fleets and the government scrappage scheme has led to a shortage in supply.

This year the average family car has increased in value by about £600.

Clearly the demon of deflation threatens us all - better ramp up the presses some more and increase the 'stimuli'.

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Used cars gain in value

Clearly the demon of deflation threatens us all - better ramp up the presses some more and increase the 'stimuli'.

Not really inflation-related IMO

Gvt market intervention (car scrappage scheme) --> Law of unintended consequences --> Market distortion (reduced supply of used cars = used car prices up)

Edited by RajD

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Not really inflation-related IMO

Gvt market intervention (car scrappage scheme) --> Law of unintended consequences --> Market distortion (reduced supply of used cars = used car prices up)

And what do you think that the debt/housing bubble is that is largely a result of government failure to regulate lenders, fiddling with inflation stats/targets whilst stuffing the BOE with interest rate dropping is?

The price is the price and affects what people have to pay and experience in their inflated costs. It doesn't matter how it got there and the price is not the servicing cost due to fudged interest rate based repayments either.

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Not really inflation-related IMO

Gvt market intervention (car scrappage scheme) --> Law of unintended consequences --> Market distortion (reduced supply of used cars = used car prices up)

Intended consequences surely - keep the poor down, and sell their children to the Chinese.

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And what do you think that the debt/housing bubble is that is largely a result of government failure to regulate lenders, fiddling with inflation stats/targets whilst stuffing the BOE with interest rate dropping is?

The price is the price and affects what people have to pay and experience in their inflated costs. It doesn't matter how it got there and the price is not the servicing cost due to fudged interest rate based repayments either.

It does matter how it got there. My point was that the main factor driving prices up is a reduced supply of used cars due to the stupid scrappage scheme, rather than it being due to an increase in the money supply.

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