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Like in the title, will it bring cost inflation but not wage inflation??

Salaries are falling, well they are in my industry (manufacturing) 10% salary cuts, JLR well now TaTa, my old contract rate was £28 an hour, rate now if i still worked there, around £22.00 an hour. My permy job at another car company lucky to get £30k a year, down from £36k, 20% cut since 2002. So wages are falling, well in my old sector, this is what they call DEFLATION, but mixed in with a load of cost inflation, so getting poorer.

How will this £200 Billion get into my wage demands, or start to increase my old salaries, how will this £200 Bn get into workers salaries, so to reduce their debt burden, because old Merv wants to get some good old inflation going or does he really is it bullsh!t? I reckon it is bully Sh!tty myself, they want the debt to linger like in Japan, burden the sheep up with debt, and watch them work longer and harder to try and service it? Slaves to the religion of home ownership?

Merv will keep the £200 Bn worth of Gilts until maturity, they will never get sold back to the open market, so they have gifted £200 Bn worth of freshly printed money to the market at the expense of keeping Gilt prices and House price high, so to keep bank balance sheets in the green and out of the red. Until the banks can withstand falls we will see ultra low interest rates, high asset prices, with next to no yield, as it cannot be afforded .

If the BoE keep the Gilts until maturity what effect will this have; also say they issue another £200 Bn buy back scheme, and keep them to maturity what effect will this have?

P

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lots of specific questions but all you need to know is that asset purchases are designed to lower real interest rates below the 0% bound after that as yet immovable barrier is encountered.

even if they didn't do it our day in the sun is over and the people of the east and south will now begin to start to take their fair share of global output which means less for us.

cost push inflation is coming. Money growth inflation is not coming our way. All the asset purchases and printy printy will find its way to where the growth is, which is not in blighty.

UK, US, japan, europe, we're all new carry trade funding for the BRICs. Get used to it because there is nothing can be done about it. Payback for several centuries of colonial abuse, one might say.

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Work longer and harder for less, the money you earn after your pay cut buys less due to wage devaluation due to the BoE letting cost inflation rip, but knowing full well wages are falling. You debt lingers for longer, and taxes rise, what a f00kin f00king the average worker will take in the coming years if he or she is lucky enough to stay in work?

If not then their benefits will be cut, house repo'ed, end game, out of the equation, no work...............................a mess!

P

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Work longer and harder for less, the money you earn after your pay cut buys less due to wage devaluation due to the BoE letting cost inflation rip, but knowing full well wages are falling. You debt lingers for longer, and taxes rise, what a f00kin f00king the average worker will take in the coming years if he or she is lucky enough to stay in work?

If not then their benefits will be cut, house repo'ed, end game, out of the equation, no work...............................a mess!

P

The main problem is the debt overhang and the taxes.

Losing your job and getting a lower wage sucks but it's not financially fatal..unless you are due to pay 11 times your income on the roof over your head for the next 20 years and the state is ramping taxes left right and centre because it can't accept reality.

Which is what is happening, obviously.

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the BoE letting cost inflation rip, but knowing full well wages are falling.

the BoE can't do a damn thing. They can raise interest rates to make sure each pound maintains the same purchasing power, but that just results in more brits having no pounds at all. If they persue that too far then it will collapse the economy and pounds will lose purchasing power anyway.

the inflation that is waiting down the road, assuming BRIC recovers is simply the kind of inflation that happens when a bunch of people who have horaded the worlds wealth for themselves for a very long time indeed start to have to share it with everyone else.

the only way to make that socially bearable is to ensure the pain is fairly distributed. mucking around with rates one way or the other won't solve the issue.

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the BoE can't do a damn thing. They can raise interest rates to make sure each pound maintains the same purchasing power, but that just results in more brits having no pounds at all. If they persue that too far then it will collapse the economy and pounds will lose purchasing power anyway.

the inflation that is waiting down the road, assuming BRIC recovers is simply the kind of inflation that happens when a bunch of people who have horaded the worlds wealth for themselves for a very long time indeed start to have to share it with everyone else.

the only way to make that socially bearable is to ensure the pain is fairly distributed. mucking around with rates one way or the other won't solve the issue.

I couldn't give two figs about the BRICs, what about what an old British person will charge a young British person for his starter home, measured in British wages? The whole 'sharing the world's resources' thing? Sure, that's already happening, and it's going to be felt all the way across British society and will be something we will all have to adapt to like it or not. It's the intergenerational HPI injustice that really gets my goat though, and that absolutely has everything to do with interest rates. Stop conflating two separate issues.

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the BoE can't do a damn thing. They can raise interest rates to make sure each pound maintains the same purchasing power, but that just results in more brits having no pounds at all. If they persue that too far then it will collapse the economy and pounds will lose purchasing power anyway.

the inflation that is waiting down the road, assuming BRIC recovers is simply the kind of inflation that happens when a bunch of people who have horaded the worlds wealth for themselves for a very long time indeed start to have to share it with everyone else.

the only way to make that socially bearable is to ensure the pain is fairly distributed. mucking around with rates one way or the other won't solve the issue.

Credit deflation at work...............I just cannot see where cost pull wage inflation will come from in the near term, 5 years? Falling demand, falling wages, if you are lucky to have a job, and even luckier to get a 3% pay rise which is in effect a pay cut, well you are only losing out a mere 2% to RPI. Unlike the average Joe who either loses his job, or gets no pay rise, or has a job and takes a 10% pay cut?

Cash may not be able to keep up with Cost inflation, true, you are losing purchasing power by the month. But if you are lucky enough to be working, you are in the same boat as cash. You work for cash, you get paid in cash.

You can get a 3 year fix with Nationwide on your cash, fixed at 3% per annum, for three years. So in essence the same return on your cash as those lucky BT workers.

Who are lucky to be in work, lucky to get a pay rise. Which is why i think if you are lucky enough to have no debt, have savings in the bank, and able to get 3% per annum after tax, then yes you are lucky in the current enviroment. Which i percieve will last for more than the three year period.

P

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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