Inflation Up To 3.7%, Rpi 5.3%

[davidcameron]

Before you all disappear in a hyperbole frenzy. lets put some context around the numbers.

The average annual inflation (RPI) rate recently has been as follows:

2 years 2.0%

3 years 2.7%

4 years 3.1%

5 years 3.0%

Over the past 13 years, the average inflation rate has been 2.7%. If the BoE had hit its target of 2.0% over that 13 years, the current index would be 202.2 rather than 222.8. That means that retail prices are 10.2% higher over the 13 year period than they should have been if the target had been hit. I don't think we need the tin hats and turnips just yet.

[ken_ichikawa]

But they do have a vested interest in preventing it collapsing completely.

I think that is something many here forget about. Merv and his pals get paid in £. They may be stupid, but they are not completely stupid.

I hope !!

They might be paid in £ but who says they aren't buying gold/silver/platium or shares with it?

It is in their interests for a massive collaspe to occur, massive collaspes have made people incredibly wealthy.

Lee Kar Shing for example bought in 1968 when confidence in HOng Kong was all time low after massive unrest and riots where executions on the streets occured (of police and protestors) he bought up enormous swathes of property.

Roman Abramovich got wealthy in the USSR collaspe.

They will be positioning themselves in such a manner so when not if the collaspe comes they will have a monopoly on necessities and will become exceptionally wealthy when the collaspe and subsequent recovery occurs.

[ken_ichikawa]

Before you all disappear in a hyperbole frenzy. lets put some context around the numbers.

The average annual inflation (RPI) rate recently has been as follows:

2 years 2.0%

3 years 2.7%

4 years 3.1%

5 years 3.0%

Over the past 13 years, the average inflation rate has been 2.7%. If the BoE had hit its target of 2.0% over that 13 years, the current index would be 202.2 rather than 222.8. That means that retail prices are 10.2% higher over the 13 year period than they should have been if the target had been hit. I don't think we need the tin hats and turnips just yet.

Except RPI and even more so CPI are absolute fraud, as Injin says RPI and CPI are merely an index, Inflation is the increase in money supply and money supply figures have been running at 8-14% a year for a very long time. So your low inflation figures are blown out of the water and beyonetted before they can get up.

[bomberbrown]

So, house prices have already halved and continue to fall in almost any major measure you care to mention except the one I am paid and save in. Ten years of hard work and restraint trying to get my first foot on the ladder and now my money's being stolen from me to prop up the very people who have been enjoying homes beyond their means all this while. Thanks a lot you lying thieving scum.

+1

I'm in exactly the same boat as you. I've decided to spend savings before they're made worthless and I intend to do it where the money might not have lost as much value on exotic holidays. I'm also going to treat myself to two new front teeth and a whole heap of veneers as I wanna have a big fat smile when I start collecting my dole money, which should then just leave me with enough under the threshold for claiming benefits.

[ken_ichikawa]

The outlook appears gloomier than at any time since the 70's. Massive government deficit,,,massive levels of individual debt....price inflation...wage deflation....weak pound....growing unemployment...government spending cuts....an economy dependant on finance sector which as we nknow is a liability......banks not lending as their balance sheets are depleted and will get worse as house prices fall...please point out some good news!

Erm in a post apocalyptic society your martial arts skills will come in handy?

[bomberbrown]

I like this, I like this a lot.

[davidcameron]

Except RPI and even more so CPI are absolute fraud, as Injin says RPI and CPI are merely an index, Inflation is the increase in money supply and money supply figures have been running at 8-14% a year for a very long time. So your low inflation figures are blown out of the water and beyonetted before they can get up.

I'm afraid I'd rather deal in figures than in Injin's opinion.

M4 growth was 3.5% in March with the growth rate falling.

edit: spelling

Edited May 18, 2010 by davidcameron

[council dweller]

In the private sector if the economy is still dodgy (and it will be) then those demanding a rise have very little leverage. Especially if they are trapped, paying a big mortgage or with large personal debt commitments. Debt is a great way to keep people under control.

With the pressure for public sector cuts I can't see large payrises on the cards for those workers either. And they also have mortgages to pay and credit card debt to service too ....

What with the demise of unionisation, the globalisation effect and generally all-round poor economic prospects, I'd say that the ability of the average worker to attain higher pay has rarely been lower in modern times.

Yep, time for a 'how much of a pay rise did you get'thread?

I'm getting 2.4% and the wife (NHS) about the same. Factor in those going on to JSA and those retiring and not being replaced and we're talking about an average of 0%?

[MinceBalls]

But they do have a vested interest in preventing it collapsing completely.

I think that is something many here forget about. Merv and his pals get paid in £. They may be stupid, but they are not completely stupid.

I hope !!

If I was being paid 250K + per year and had an index linked final salary scheme I would be investing a lot of my wages in precious metals et al. That's what rich people are currently doing - getting out of Stirling and waiting to be the next 'power'. As described above, that is what always happens.

It is ridiculous to wish a collapse and hyperinflation on a country so as certain wealthy people 'get their comeuppance' (as was posted earlier about Mervin King) when the very same wealthy individuals (and those responsible for the collapse) have the power, knowledge, influence and wealth to hedge against it.

The ultimate losers in all of this are the poor and the middle classes. Everyone will be dragged closer to poverty and therefore it doesn't take a rocket scientist to suppose that those already close to poverty will suffer the most.

[bomberbrown]

One of the reassurances I cling to on inflation/deflation debate is that serious inflation will really hurt the more vulnerable people in our society; i.e the elderly and the very low paid. I just don't see how a first world country would let pensioners etc starve and freeze to death in their own homes.

Yes, I'm probably clutching at straws, I know.

[South Lorne]

Don't forget:

- the oil spill

- the troubles in Bangkok

- the upcoming World Cup

- the Lewis Hamilton crash some weeks ago

- weather too cold

- weather soon to be too hot

- not enough snow in the summer

- and many other things that are clearly pushing inflation up.

When house prices start properly crashing later this year, I'm sure the BBC will link it with all of the above.

...yeah ...certainly the cost of the BBC world cup coverage and the waste entailed will add a few more points before the year is out....should take lessons from other broadcasters who are not tax payer funded.....

[bobthe~]

Meaning?

Even if they didn't know what was coming down the pipe, they seem to be better protected than most.

Not exactly Performance Related, is it?

I would make them swap the ILs for ordinary gilts.

Edit to add, actually if they have a Final Salary scheme then it is probably irrelevant what they invest in, so I would move them to a defined contribution scheme and make them buy gilts with the contributions.

Edited May 18, 2010 by bobthe~

[onlybone1]

I cannot believe what is happening with the economy. I have just sent this letter to the Bank of England. I know it won't do anything, but it makes me feel better.

Bank of England

Threadneedle St

London

EC2R 8AH

Spectacular mismanagement

Today I see that RPI has reached the heady heights of 5.3%, Sterling is getting hammered, base rates are 0.5%, 10 year gilts 3.75%, the best savings rates are 3%, UK debts stand at anything from £ 1trillion to £2 trillion depending upon who you talk to (amazingly no one knows) annuity rates are disgracefully low and stock market volatility has gone off the charts. Gold is reaching all time highs. Commercial property prices are wobbling again. What is going on?

Oh and guess what residential property prices are supposedly rising, which is great news for future generations. WAKE UP!! This madness has to stop now.

The gallows are too good for the policymakers responsible for this shambles, why is no one being held accountable for the horrific state of the economy. I see in Iceland they are pursuing rogue bankers and politicians are getting short shrift. An obscene pension, after dinner speaking and/or a non exec role is punishment enough in the UK. What a disgrace.

Base rates have to rise to at least send the message that loose monetary policy is not going to continue ad infinitum. Never has there been such reward for irresponsible borrowing at the expense of the prudent.

Just to add insult to injury why are markets calling the shots on monetary policy around the globe? Any monkey with a screen and keyboard can take advantage of the telegraphed decisions of current governments. The taxpayer is getting completely shafted.

So what are you going to do Mervyn? Write another letter saying RPI is a temporary blip, perhaps print a bit more cash because the cupboard is bare, keep base rates low to maintain the illusion of property wealth, talk about a global problem that needs a global response and that we are only a ‘iddy widdy little cog’ in the hugely powerful global engine. I am only the governor of the Bank of England what can I do?

Shall we try and be truthful just for a change, let’s at least admit we have spent far too much both privately and publicly. Get all the figures on the table for everyone to see. The root cause of the problem has been base rates too low for too long. The irresponsible borrowers and lenders have not been penalised they are laughing at the taxpayers expense. Get base rates up, people will save more and banks will have real savers cash to lend, this will take a long time. There will be many individuals exposed on the road back to equilibrium but these charlatans and speculators know who they are and should never have been lent all this money in the first place at the expense of the majority. Some people will always be a bad risk.

Please get round to Downing street at your earliest convenience and provide some hard facts to Dave, Nick and George to at least give them a chance of saving what little we have left of this dysfunctional economy. You have many late nights ahead of you and remember being good at your job doesn’t necessarily mean you will be popular, a point sadly lost on those individuals in the positions of power that could have prevented this mess if they took their jobs and responsibilities seriously.

Get it sorted, please.

[piece of paper]

One of the reassurances I cling to on inflation/deflation debate is that serious inflation will really hurt the more vulnerable people in our society; i.e the elderly and the very low paid. I just don't see how a first world country would let pensioners etc starve and freeze to death in their own homes.

Yes, I'm probably clutching at straws, I know.

It probably wouldn't but what has that got to do with this country's circumstances?

p-o-p

[R K]

Where are the letters or is Merv just sending a "Hope you are very happy in your new house" card?

p-o-p

Dear Osborne,

There's no money left

Yours,

Penfold

[ken_ichikawa]

One of the reassurances I cling to on inflation/deflation debate is that serious inflation will really hurt the more vulnerable people in our society; i.e the elderly and the very low paid. I just don't see how a first world country would let pensioners etc starve and freeze to death in their own homes.

Yes, I'm probably clutching at straws, I know.

Japan does, so does Korea and Taiwan. Although some people married to Koreans and Japanese will disagree there are massive shanties in Korea Japan and Taiwan (China too but China ain't a 1st world country)

[South Lorne]

Mervyn King's latest letter just released on Wiki-leaks...

Dear Mr Osbourne,

Liam Byrne was right.

Yours Merv.

...wrong ...he didn't mention the debt ....probably didn't have the figures or understand it....

[THE BALD MAN]

If I was being paid 250K + per year and had an index linked final salary scheme I would be investing a lot of my wages in precious metals et al. That's what rich people are currently doing - getting out of Stirling and waiting to be the next 'power'. As described above, that is what always happens.

It is ridiculous to wish a collapse and hyperinflation on a country so as certain wealthy people 'get their comeuppance' (as was posted earlier about Mervin King) when the very same wealthy individuals (and those responsible for the collapse) have the power, knowledge, influence and wealth to hedge against it.

The ultimate losers in all of this are the poor and the middle classes. Everyone will be dragged closer to poverty and therefore it doesn't take a rocket scientist to suppose that those already close to poverty will suffer the most.

Many of the people earning large salaries are civil servants/local authority workers or bankers supported by the tax payer..Easy solution is to cut these people adrift into the real world to see how clever they are

[Toto deVeer]

I cannot believe what is happening with the economy. I have just sent this letter to the Bank of England. I know it won't do anything, but it makes me feel better.

Bank of England

Threadneedle St

London

EC2R 8AH

Spectacular mismanagement

Today I see that RPI has reached the heady heights of 5.3%, Sterling is getting hammered, base rates are 0.5%, 10 year gilts 3.75%, the best savings rates are 3%, UK debts stand at anything from £ 1trillion to £2 trillion depending upon who you talk to (amazingly no one knows) annuity rates are disgracefully low and stock market volatility has gone off the charts. Gold is reaching all time highs. Commercial property prices are wobbling again. What is going on?

Oh and guess what residential property prices are supposedly rising, which is great news for future generations. WAKE UP!! This madness has to stop now.

The gallows are too good for the policymakers responsible for this shambles, why is no one being held accountable for the horrific state of the economy. I see in Iceland they are pursuing rogue bankers and politicians are getting short shrift. An obscene pension, after dinner speaking and/or a non exec role is punishment enough in the UK. What a disgrace.

Base rates have to rise to at least send the message that loose monetary policy is not going to continue ad infinitum. Never has there been such reward for irresponsible borrowing at the expense of the prudent.

Just to add insult to injury why are markets calling the shots on monetary policy around the globe? Any monkey with a screen and keyboard can take advantage of the telegraphed decisions of current governments. The taxpayer is getting completely shafted.

So what are you going to do Mervyn? Write another letter saying RPI is a temporary blip, perhaps print a bit more cash because the cupboard is bare, keep base rates low to maintain the illusion of property wealth, talk about a global problem that needs a global response and that we are only a ‘iddy widdy little cog’ in the hugely powerful global engine. I am only the governor of the Bank of England what can I do?

Shall we try and be truthful just for a change, let’s at least admit we have spent far too much both privately and publicly. Get all the figures on the table for everyone to see. The root cause of the problem has been base rates too low for too long. The irresponsible borrowers and lenders have not been penalised they are laughing at the taxpayers expense. Get base rates up, people will save more and banks will have real savers cash to lend, this will take a long time. There will be many individuals exposed on the road back to equilibrium but these charlatans and speculators know who they are and should never have been lent all this money in the first place at the expense of the majority. Some people will always be a bad risk.

Please get round to Downing street at your earliest convenience and provide some hard facts to Dave, Nick and George to at least give them a chance of saving what little we have left of this dysfunctional economy. You have many late nights ahead of you and remember being good at your job doesn’t necessarily mean you will be popular, a point sadly lost on those individuals in the positions of power that could have prevented this mess if they took their jobs and responsibilities seriously.

Get it sorted, please.

As they say, can't have capitalism without capital.

Heard any knocks on the door yet?

[THE BALD MAN]

Erm in a post apocalyptic society your martial arts skills will come in handy?

arigato gozaimasu

[DTMark]

Yep, time for a 'how much of a pay rise did you get'thread?

I'm getting 2.4% and the wife (NHS) about the same. Factor in those going on to JSA and those retiring and not being replaced and we're talking about an average of 0%?

I'll be raising my labour rate by 5% next month in line with inflation.

[Toto deVeer]

Erm in a post apocalyptic society your martial arts skills will come in handy?

Or for those of us who aren't black belts, a sawed off shotgun could be useful too...

[bobthe~]

Many of the people earning large salaries are civil servants/local authority workers or bankers supported by the tax payer..Easy solution is to cut these people adrift into the real world to see how clever they are

Exactly. These are the brightest of the bright, otherwise why are we paying such a large amount of money to get them to work for us? They would do much better out in the private sector because they would then be creating genuine wealth for the country.

And I wonder whether with the state we are in now, they really are that bright,

[R K]

The direction of this thread points to the new investment paradigm; put your wealth where it suffers the least, relative to all other assets. That's the strategy for now, and it doesn't look like it will change any time soon.

1970's : inflation.

1980's : value.

1990's : growth.

2000's : bubblicious real assets.

2010+ : safety.

On that note, gold has been on the decline for the last couple of days...

Ever since you told us Mrs Merkin was about to make an earth shattering announcement to the Volk concerning an imminent withdrawal from the Euro and a gold-backed DM in fact.

[South Lorne]

Exactly. These are the brightest of the bright, otherwise why are we paying such a large amount of money to get them to work for us? They would do much better out in the private sector because they would then be creating genuine wealth for the country.

And I wonder whether with the state we are in now, they really are that bright,

...get them to appear on 'The Apprentice' and we will see if they have any common sense....I'm sure Alan Sugar would enjoy the Series .....