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Merv: I Am Afraid We Are Deflating

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http://www.bloomberg.com/news/2010-10-19/boe-governor-king-says-some-u-k-inflation-indicators-extremely-subdued-.html

BOE Governor King Says Some U.K. Inflation Indicators `Extremely Subdued'
By Scott Hamilton and Jennifer Ryan - Oct 19, 2010 7:30 PM GMT
Bank of England Governor Mervyn King said that some gauges of U.K. inflation are “extremely subdued,” signaling that he may be open to stepping up bond purchases.
Officials are “conscious that the continuing high level of inflation poses the risk that inflation expectations may move up,” King said in a speech today in Dudley, England.
Still, the danger that slack in the economy will push price-growth below the bank’s target is “at least as large.

Looks like Merv and Ben are both seeing deflation. They should embrace it and not try to avoid it.

Edited by Realistbear

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http://www.bloomberg.com/news/2010-10-19/boe-governor-king-says-some-u-k-inflation-indicators-extremely-subdued-.html

BOE Governor King Says Some U.K. Inflation Indicators `Extremely Subdued'
By Scott Hamilton and Jennifer Ryan - Oct 19, 2010 7:30 PM GMT
Bank of England Governor Mervyn King said that some gauges of U.K. inflation are “extremely subdued,” signaling that he may be open to stepping up bond purchases.
Officials are “conscious that the continuing high level of inflation poses the risk that inflation expectations may move up,” King said in a speech today in Dudley, England. Still, the danger that slack in the economy will push price-growth below the bank’s target is “at least as large.”

Looks like Merv and Ben are both seeing deflation. They should embrace it and not try to avoid it.

Deflation would be good for the environment. Rampant consumerism, forcefully bringing foward demand year after year is unsustainable IMO.

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Once, when I was about ten years old, I fell out of a tree. I scrambled with my hands for a grip on anything but caught nothing. As I fell, I remember thinking that there was little left I could do and instinctively relaxed - electing not to fight the descent.

After lying still for a while, I simply got to my feet with only a sore, bruised leg to show for it, and walked away. I turned around to view my landing area to see a large, protruding root. I reflected then, as I still do now, that had I not accepted the situation - I would have suffered a great deal more, perhaps fatally.

I vowed, in future, to be more considerate of my actions and never again so cavalier.

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Am i being really thick? I thought Merv just wrote some more letters explaining why inflation was higher than the target

I think the Wizards of Oz see inflation/deflation as debt creation/destruction.

We munchkins just see some things costing more, others things costing less.

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Am i being really thick? I thought Merv just wrote some more letters explaining why inflation was higher than the target

I must have missed something too...!

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Once, when I was about ten years old, I fell out of a tree. I scrambled with my hands for a grip on anything but caught nothing. As I fell, I remember thinking that there was little left I could do and instinctively relaxed - electing not to fight the descent.

After lying still for a while, I simply got to my feet with only a sore, bruised leg to show for it, and walked away. I turned around to view my landing area to see a large, protruding root. I reflected then, as I still do now, that had I not accepted the situation - I would have suffered a great deal more, perhaps fatally.

I vowed, in future, to be more considerate of my actions and never again so cavalier.

A beautiful little anecdote that deserves one of our visiting journos to pick up on.

As for the the deflation/inflation 'problem', I do wonder why there is such consternation about the cost of living actually falling, it might make us more competitive globally and force down the costs of doing business. Though I suppose it your imaginary wealth is tied up in imaginatively overpriced assets such as houses, this might pose a problem.

The UK is simply too expensive... do we stop interfering and let the correction happen, or do we keep on interfering and keep on pouring money down that big black hole where those that helped cause the mess reside?

Edited by tinker

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This ***** is still has his eye on "economic output" at the height of the biggest (central bank generated) bubble in history. A debt fuelled period that led to disastrous lending practices and utterly unsustainable debt based expenditure and this is still in his sights.

http://uk.reuters.com/article/idUKTRE69I50L20101019

King said the future path for growth and inflation was likely to be erratic, and reiterated that his focus was on the fact that economic output was 10 percent below its pre-financial crisis peak, rather than quarterly growth.

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(Reuters) - Inflation is at least as likely to undershoot its target because of slack in the economy as it is to overshoot due to high public inflation expectations the BoE never having a clue what its doing, Bank of England Governor Mervyn King said on Tuesday.

Putting in the corrections just seemed the right thing to do :lol:

Edited by billybong

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http://www.bloomberg.com/news/2010-10-19/boe-governor-king-says-some-u-k-inflation-indicators-extremely-subdued-.html

BOE Governor King Says Some U.K. Inflation Indicators `Extremely Subdued'
By Scott Hamilton and Jennifer Ryan - Oct 19, 2010 7:30 PM GMT
Bank of England Governor Mervyn King said that some gauges of U.K. inflation are “extremely subdued,” signaling that he may be open to stepping up bond purchases.
Officials are “conscious that the continuing high level of inflation poses the risk that inflation expectations may move up,” King said in a speech today in Dudley, England.
Still, the danger that slack in the economy will push price-growth below the bank’s target is “at least as large.

Looks like Merv and Ben are both seeing deflation. They should embrace it and not try to avoid it.

Oh noes! We're deflating (according to TPTB)!!!!!!!

Well, nothing for it but to print, print, print in order to 'fight the deflationary death spiral'. After all, it's just to fight deflation and not at all because we are broke and we desperately want to inflate our debt away.... oh no, not at all :lol::lol::lol:

Still waiting to see some actual deflation manifesting in my day to day living. :rolleyes: I'd dearly love to see it as my salary and savings ain't going up much but there's no sign whatsoever of it happening.

Higher Order Capital Goods will of course have to get cheaper relative to Lower Order Consumer Goods but it's pretty damned obvious that the authorities will inflate consumer goods to support assets prices.

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...

Officials are "conscious that the continuing high level of inflation poses the risk that inflation expectations may move up," King said in a speech today in Dudley, England.
Still, the danger that slack in the economy will push price-growth below the bank's target is "at least as large.
"

Looks like Merv and Ben are both seeing deflation...

Rubbish. The quotes you have posted don't look like that at all.

Don't get me wrong, I still think that [deleveraging and default] deflation is the threat and that [base money] inflation is the selected response.

But what Merv is saying above is that the risks are still balanced.

.

Edited by Timm

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Am i being really thick? I thought Merv just wrote some more letters explaining why inflation was higher than the target

No he wrote why the CPI is higher than the target. But CPI is not inflation.

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No he wrote why the CPI is higher than the target. But CPI is not inflation.

How much has the base money supply increased by in the last few years?

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Am i being really thick? I thought Merv just wrote some more letters explaining why inflation was higher than the target

We are deflating at a rate of minus 5% per year. Very worrying.

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Mervyn King's speech in full:

http://www.bankofeng...0/speech454.pdf

Good point. That is a very, very interesting speech.

(Idiot commentary follows).

King (appears to be) saying that he is willing to prevent deflation, but that the priority is a structural (and global) rebalancing.

For now, strategy seems to be to hold fire. Barring devaluation by China etc, that would imply no QE2 for now. Not what I expected.

Which could be why he said it (yes)today of all days...

Edited by Timm

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Am i being really thick? I thought Merv just wrote some more letters explaining why inflation was higher than the target

Nope. That inflation, although it is their official remit, doesn't count. Only house prices matter.

I'm only being slightly facetious. As expected we are in biflation. Commodities and consumables going up in price as the currency weakens, whilst the assets that were all bid up on easy credit over the past decade or so are coming down. Inflation that punishes savers is of no interest to them, as by definition, they have some money left to spend. Deflation that hits creditors is what they are worried about as they must keep the game going. The whole thing just disgusts me to the core.

Edited by Tiger Woods?

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Nope. That inflation, although it is their official remit, doesn't count. Only house prices matter.

I'm only being slightly facetious. As expected we are in biflation. Commodities and consumables going up in price as the currency weakens, whilst the assets that were all bid up on easy credit over the past decade or so are coming down. Inflation that punishers savers is of no interest to them, as by definition, they have some money left to spend. Deflation that hits creditors is what they are worried about as they must keep the game going. The whole thing just disgusts me to the core.

Spot on.

On the one hand, this is what I thought would happen. So that might mean that I'm cleverer at economics than he is.

On the other hand, and infinitely more likely, this is entirely deliberate and as planned.

When petrol hits £2 a litre and the "cuts" kick in things will get interesting.

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This year my car insurance rose 20%, my house insurance 10% (both of which I shopped around for), my gas and electric have had 2 separate increases totalling around 17% each.

Oh yes, this deflation is scaring the f**k out of me...... C**ts!

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This year my car insurance rose 20%, my house insurance 10% (both of which I shopped around for), my gas and electric have had 2 separate increases totalling around 17% each.

Oh yes, this deflation is scaring the f**k out of me...... C**ts!

Indeed. Maybe people need to borrow more money to be able to afford their day to day living expenses as well as borrowing obscene amounts of money for a roof over their head (or more accurately for a tiny slice of massively inflated land).

There will be absolutely no recovery in the economy, no rebalancing in trade, if anything carrying on the same pig thick policies of the last ten years will make offshoring and outsourcing even more attractive to get away from such screwbal economics, from economists that have never made a productive penny in their lives.

http://www.dailymail.co.uk/news/article-1321908/Petrol-prices-hit-1-25-litre-threat-worse-come.html

£1.25 a litre: Price of petrol to hit a record high in weeks, followed by threat of even worse to come

By Ray Massey

Last updated at 5:08 AM on 20th October 2010

A ‘perfect storm’ of soaring oil costs, higher fuel duty and blockades in France is pushing petrol prices to new heights.

Read more: http://www.dailymail.co.uk/news/article-1321908/Petrol-prices-hit-1-25-litre-threat-worse-come.html#ixzz12sTe5aeK

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Imagine you could re-write the dictionary. Free your mind for a second as an independent free thinker.

Here are the new entries:

Deflation - the movement of prices of the essentials up (makes poorer people richer), and asset prices down (makes business men poorer)

Inflation - The opposite of deflation.

Under the new definitions, the threat is deflation.

Edited by Money Spinner

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  • 261 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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