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Inflation Up To 3.7%, Rpi 5.3%


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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.

Do you have some personal reason for getting so angry every time Germany sticks up for its own perceived interests instead of everybody else's? I'm starting to think Merkel ran over your cat or something.

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Now that the election has been and the Nokia yielding pyscho known as Brown has left number 10, the ONS are no longer scared to publish the true figures.  I think no one here is surprised that inflation is that high.  But the real question is whether or not the BoE have the balls to put interest rates up.  It wouldnt surprise me if now they are pushed upwards.  The pressure is certainly there to

I suspect we'll get a revised inflation target of 4%, there has already been talk of this. Apparently 2% may be too low and lead to the sort of collapses we have just witnesses.

Besides, what it the easy way out from paying all those public sector liabilities?

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muwwaahhaaa

Deflation my ****, said it over 12 months ago. My leveraged strategy continues to be the best bet, in fact the money I have borrowed is virtually free now. Just had a 6% payrise as well happy days.

Look its very simple, the VI's cannot have deflation thus they will make sure we don't. The VI's need to get wage inflation imbedded into the system (in the private sector).................................it's on its way, sterling is trashed employes can and will pay.

Fiat is bs, just a way of keeping score, the scoring system needs a few noughts adding to it now. Thus the noughts will be added.

1975-1985 wages doubled...................you would do well to remember this.................unemployment quadrupled..............go figure..............you would do well to know this.

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I imagine he would be "conflicted" to say the least.

...I'm not a great fan of his but liked when he spoke out against all the aspiring 'business entrepreneurs' complaining the Banks were not lending them money in the recession when they didn't even have realistic business plans....much to Gordo's embarrassment ..... :rolleyes:

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Besides, what it the easy way out from paying all those public sector liabilities?

The liabilities are inflation linked, they will not go away.

The debt pile is not however, some inflation at 5% for 5 years would be most welcome from their point of view.

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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.

i.e. there's a mugging happening in the street outside right this second, but it hasn't happened for a while so no need to do anything about it

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Based on those letters, I'm buying more RPI-linked bonds at the first opportunity.

I read somewhere here a while back that the BoE pension fund piled all their money into index-linked bonds around 2008. Anyone know where that info is available?

...the inference being there may be a conflict of interest in deciding to raise IRs.....?..... :rolleyes:

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Duke,

http://ftalphaville.ft.com/blog/2009/03/31/54240/the-bank-of-englands-gilty-secret-betting-on-inflation/

The Bank of England’s gilty secret: betting on inflation?

Posted by Sam Jones on Mar 31 12:23.

The Bank of England has a rather smart set of pension fund managers. Take the below snippets, from the BoE employees pension fund report, 2008.

Major changes during the Scheme year

2007-08 was a year of major structural change for the Fund:

- at the request of the Bank, and after careful consideration, the Trustee made a fundamental change in investment strategy, as a result of which the Fund’s assets are now predominantly invested in gilt-edged securities;

...

In accordance with the new Statement of Principles the Fund’s former holdings of quoted equities and overseas equities were liquidated during the year and the proceeds reinvested in gilts of appropriate maturities, mostly index-linked in line with the liabilities.

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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.

excellent letter.........too bad a lackey will probably bin it.

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...the inference being there may be a conflict of interest in deciding to raise IRs.....?..... :rolleyes:

Gaming the market to suit their pension fund, which itself doesn't even act independently (or behind chinese walls) becuase they have been instructed by the bank to change their investment strategy (see above).

Yes, if so it is called fraud.

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Duke,

http://ftalphaville.ft.com/blog/2009/03/31/54240/the-bank-of-englands-gilty-secret-betting-on-inflation/

The Bank of England’s gilty secret: betting on inflation?

Posted by Sam Jones on Mar 31 12:23.

The Bank of England has a rather smart set of pension fund managers. Take the below snippets, from the BoE employees pension fund report, 2008.

Major changes during the Scheme year

2007-08 was a year of major structural change for the Fund:

- at the request of the Bank, and after careful consideration, the Trustee made a fundamental change in investment strategy, as a result of which the Fund’s assets are now predominantly invested in gilt-edged securities;

...

In accordance with the new Statement of Principles the Fund’s former holdings of quoted equities and overseas equities were liquidated during the year and the proceeds reinvested in gilts of appropriate maturities, mostly index-linked in line with the liabilities.

Like I said the VI's know where this needs to end..............

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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

Many wouldn't hack it......if they are that good they should justify their running costs, or be prepared to re-apply for their job. ;)

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Gaming the market to suit their pension fund, which itself doesn't even act independently (or behind chinese walls) becuase they have been instructed by the bank to change their investment strategy (see above).

Yes, if so it is called fraud.

.. ...'insider trading call the FSA' as one of the respondents to the article suggested...?..... :rolleyes:

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