Jump to content
House Price Crash Forum
awaytogo

Deflation Fears

Recommended Posts

Deflation fears

Slip ... pay growth is slowing

WAGE growth is slowing - sparking fears of deflation.

Official figures yesterday showed wages were just one per cent higher in July than in the same month last year.

This compared with a 1.9 per cent figure for June and more than three per cent for most of 2008, the Office for National Statistics said.

Economists predict rises will shrink further and could become pay CUTS as employers battle the recession.

Vicky Redwood, of Capital Economics, said: "This slowdown in pay growth highlights clearly why the risk of deflation is alive and well."

The data also showed a pay gap between public and private sector workers.

Those in the public sector are still enjoying decent rises of 2.5 per cent, against 0.6 per cent deals in private firms.

http://www.thesun.co.uk/sol/homepage/news/...iness-news.html

Deflation is still in the news,

Share this post


Link to post
Share on other sites
Deflation fears

Slip ... pay growth is slowing

WAGE growth is slowing - sparking fears of deflation.

Official figures yesterday showed wages were just one per cent higher in July than in the same month last year.

This compared with a 1.9 per cent figure for June and more than three per cent for most of 2008, the Office for National Statistics said.

Economists predict rises will shrink further and could become pay CUTS as employers battle the recession.

Vicky Redwood, of Capital Economics, said: "This slowdown in pay growth highlights clearly why the risk of deflation is alive and well."

The data also showed a pay gap between public and private sector workers.

Those in the public sector are still enjoying decent rises of 2.5 per cent, against 0.6 per cent deals in private firms.

http://www.thesun.co.uk/sol/homepage/news/...iness-news.html

Deflation is still in the news,

Course it is - inflation works best if people hold cash.

Share this post


Link to post
Share on other sites
Deflation is a house price bear's bestest fweind.

Which is why too many are attached to it as an outcome.

The government is going to print and print and steal your savings in order to bail it's various constituencies out.

Share this post


Link to post
Share on other sites
Which is why too many are attached to it as an outcome.

The government is going to print and print and steal your savings in order to bail it's various constituencies out.

THis may be their cunning plan but they will meet market resistance: Sterling, borrowing rates (if our bonds are downgraded) and social upheaval: when people are robbed of the value of their money they rebel. In a deflation scenario all is calm...depressing maybe, but calm.

When a $9.4TR bubble deflates it carries with it a lot of deflationary momentum in the form of job losses, downward spiral in wages and price of goods.

(that freakin go compare is looming large on my screen as I accidentlaly stepped inot its box with my mouse and there is no way to X it out)

Share this post


Link to post
Share on other sites
(that freakin go compare is looming large on my screen as I accidentlaly stepped inot its box with my mouse and there is no way to X it out)

I hate it too..but, top left hand corner of the ad, you can click on "close"..it's very faint, but it's there ;)

Edited by acer

Share this post


Link to post
Share on other sites
Deflation fears

Slip ... pay growth is slowing

WAGE growth is slowing - sparking fears of deflation.

Official figures yesterday showed wages were just one per cent higher in July than in the same month last year.

This compared with a 1.9 per cent figure for June and more than three per cent for most of 2008, the Office for National Statistics said.

Economists predict rises will shrink further and could become pay CUTS as employers battle the recession.

Vicky Redwood, of Capital Economics, said: "This slowdown in pay growth highlights clearly why the risk of deflation is alive and well."

The data also showed a pay gap between public and private sector workers.

Those in the public sector are still enjoying decent rises of 2.5 per cent, against 0.6 per cent deals in private firms.

http://www.thesun.co.uk/sol/homepage/news/...iness-news.html

Deflation is still in the news,

Wages *rises* might be slipping in the UK at, so what we're not the driving force in a world economy. With that in mind we can easily avoid deflation and IMO we will do by oversteering not to hyperinflation, but to annoyingflation ( the level where it starts to annoy people). In isolation a country can deflate if the world prints cash, its going one way and one way only.

Share this post


Link to post
Share on other sites

Cashzilla is coming.

Dollarzilla is coming.

Statistically, history tells us that house prices fare better under a Labour government than a Tory one.

What government do we see coming next year?

hmmmm....

Share this post


Link to post
Share on other sites
Which is why too many are attached to it as an outcome.

The government is going to print and print and steal your savings in order to bail it's various constituencies out.

If they enable Public sector pay freezes and freeze benefits and houseing benefits using falling RPI and CPI as a reason won't the goverment be better off without printing.!

Share this post


Link to post
Share on other sites
If they enable Public sector pay freezes and freeze benefits and houseing benefits using falling RPI and CPI as a reason won't the goverment be better off without printing.!

I don't think they'll find a few trillion quid by nickel and diming school cleaners, somehow.

Share this post


Link to post
Share on other sites
Guest Steve Cook
I don't think they'll find a few trillion quid by nickel and diming school cleaners, somehow.

I am inclined towards the inflationary outcome.

Loads-a-money is printed up/created electronically by the CBs

This will produce monetary-inflationary-driven price rises unless:

1) the money is sucked back out from elsewhere in the economy in the form of higher taxes/cuts in public services and is then "destroyed" by the CBs. This would have the effect of rebalancing the overall money supply.

2) There is sufficient growth in the economy to be able to give all of the new money a new home to go to. This will have the effect of causing the ratio of money to the economic need fro it to come back into balance.

Number (1) is only going to be partially successful. this is because there will be so much that needs to be sucked back out of the economy to bring the money supply back into balance, that if the government were to try and do it over a relatively short time frame there would be civil unrest.

Number (2) is not going to happen because as soon as we try to grow our economies significantly again, we are going to run into the same resource supply constraints (in particular, energy) that is the primary underlying reason for this crisis in the first place.

My guess is that the governments will attempt to hold a middle ground whereby they suck some money back in and hope for some limited growth. The thing is that growth is simply not going to happen.

The only outcome is massive price rises in goods and services. These price rises will be driven from both the supply and demand ends of the equation simultaneously. Firstly, as a result of monetary inflation. Secondly, as a result of actual, real-world deflation of raw resources.

We are between a rock and a hard place.

Share this post


Link to post
Share on other sites

We certainly are Steve. Whilst inflation is the plan, the only plan, the sheer magnitude of the shadow banking system means that we will have deflation for a while to come. Not that the price of commodities is likely to reduce.

Whatever the timescale we are ensured volatility from here on in. I expect that the banking sector will basically suck all the life out of the real economy such that we have trouble feeding ourselves.

Share this post


Link to post
Share on other sites
THis may be their cunning plan but they will meet market resistance: Sterling, borrowing rates (if our bonds are downgraded) and social upheaval: when people are robbed of the value of their money they rebel. In a deflation scenario all is calm...depressing maybe, but calm.

When a $9.4TR bubble deflates it carries with it a lot of deflationary momentum in the form of job losses, downward spiral in wages and price of goods.

(that freakin go compare is looming large on my screen as I accidentlaly stepped inot its box with my mouse and there is no way to X it out)

Use Firefox and install the script blocker.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   288 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.