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Recovery Is Not Inflationary - Bank's Posen

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http://uk.reuters.com/article/idUKTRE69Q17N20101027

Britain's fledgling economic recovery is not fuelling a surge in inflation, Bank of England policymaker Adam Posen said in a newspaper interview published on Wednesday.

"If there was going to be a recovery that either was inflationary or otherwise meaningfully different from that established pattern, it should have been evident by now," Posen told the Irish News.

"We've fended off a financial crisis, currency and interest rates are stable and there is price stability because, while we overshot a bit on our inflation target, let's be realistic, 3.5 percent is a far cry from double-digit inflation."

Posen, who was the sole voice on the nine-strong Monetary Policy Committee calling for a 50 billion pound expansion of the Bank's quantitative easing scheme this month, also said the financial sector was not "fixed yet."

Well lets be honest 3.5% inflation could be a bit of a problem if you are already over leveraged and over extended. Numerically it may not be double digit but if money is tight 3.5% inflation could be a killer and send many over the edge. Certainly 3.5% inflation and savings rate below that certainly doesn't help savers.

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3.5% is a far cray from the double digit inflation that made debt go away for those who stayed solvent last time.

Crucifixtion? One cross each, the line on the left...

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So if we take the last two quarters growth 1.2% and 0.8% and add them up and times by two to get yearly growth of 4%, then subtract the RPI of about 5% we can actually see there is no growth and in fact our economy is shrinking by 1%. So the 'growth' is entirely inflationary.

Remember these figures aren't real. Growth in reality will be lower and inflation higher, so the situation is actually worse. Not that I care, I love it, keep it up.

P.S. Posen, please convince the rest of the MPC to QE again soon! :ph34r:

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http://uk.reuters.com/article/idUKTRE69Q17N20101027

Well lets be honest 3.5% inflation could be a bit of a problem if you are already over leveraged and over extended. Numerically it may not be double digit but if money is tight 3.5% inflation could be a killer and send many over the edge. Certainly 3.5% inflation and savings rate below that certainly doesn't help savers.

Delink his pension and salary from inflation and make it a fixed 2% pa (the inflation target) increase.

I am still puzzled by the fact that we have an American sitting on MPC setting UK monetary policy??

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So if we take the last two quarters growth 1.2% and 0.8% and add them up and times by two to get yearly growth of 4%, then subtract the RPI of about 5% we can actually see there is no growth and in fact our economy is shrinking by 1%. So the 'growth' is entirely inflationary.

Remember these figures aren't real. Growth in reality will be lower and inflation higher, so the situation is actually worse. Not that I care, I love it, keep it up.

P.S. Posen, please convince the rest of the MPC to QE again soon! :ph34r:

GDP growth figures are quoted in constant prices. Don't let facts get in the way of your opinion.

from the ONS

Notes

Unless otherwise specified:

Growth refers to a comparison of output in the latest quarter compared with the previous quarter. This is referred to as quarterly growth.

Annual growth refers to a comparison of output in the latest calendar year in comparison with the previous year.

Figures are in chained volume or real terms, that is, they have been adjusted to remove the effects of price change.

Figures are seasonally adjusted.

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Why was i paying 80p a litre for petrol in early 2009 and 120p a litre by early 2010 then you fat ugly ape.

adam-posen-1.jpg

You weren't, you were paying about 90p, of which 70% (63p) was tax, and 27p actual fuel

Now you're paying 120p, of which 65% (78p) is tax, and 42p actual fuel

Yes the fuel price has soared by 50% from 27p to 42p

But the tax take has risen 25% too, and represents half of the nominal increase in prices, the rest is crude prices/exchange rate

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Delink his pension and salary from inflation and make it a fixed 2% pa (the inflation target) increase.

I am still puzzled by the fact that we have an American sitting on MPC setting UK monetary policy??

Gordon Brown let in 5,000 CIA 'specialists' supposedly to fight UK terrorists just before he was ousted!

These are country destroyer takeover/overseer 'specialists' - just like they have in sarf america/africa/asia

Brown boosted Mi5/6 spending by nearly a quarter into the Billions £££'s for the first time too - I have seen no mention that it has been reduced in any way during "we are all in this together" 'austerity'!

To prove this the Govt have announced just last week to bring back the worst of the stasi big brother elements/laws laid down by treacherous labour for last 15yrs in a new clampdown to throttle free speech/block non govt approved websites/track your movements/everything you do for no reason etc.

Govt supposedly work for us, they are not there to put us under this type of surveillance without OUR authority - who are they really working for and answerable to whom?

Just so you know where you are all heading under the 'Cons'!

Edited by erranta

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GDP growth figures are quoted in constant prices. Don't let facts get in the way of your opinion.

from the ONS

Yes, headline GDP rates in the press are real (inflation adjusted) growth rates.

Edited by easybetman

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"We've fended off a financial crisis, currency and interest rates are stable and there is price stability because, while we overshot a bit on our inflation target, let's be realistic, 3.5 percent is a far cry from double-digit inflation."

Translation:

'We printed £200 billion and have gotten away with it - let's do it again'.

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GDP growth figures are quoted in constant prices. Don't let facts get in the way of your opinion.

from the ONS

Yes and seasonal adjustment doesn't allow for data manipulation, just perfect figures we can all believe in....

http://onlinelibrary.wiley.com/doi/10.2307/3315220/abstract

Abstract

Statistics Canada, like most statistical bureaus, is concerned with problems affecting the accuracy, the consistency, and the usefulness of seasonally adjusted series. The most serious problems affecting the accuracy of seasonally adjusted data in the eighties are related to changes in trading-day variations caused by changes in consumers' patterns and to the effect of the early arrival of Easter in March (1986) and the beginning of April (1980, 1983, 1985, 1988). The problems affecting consistency mainly result from the lack of uniform practices for the seasonal adjustment of related series and economic aggregates. This lack of uniformity is present in (1) the seasonal adjustment of current observations, which can be done by applying the X-11-ARIMA program in four different modes; and (2) the seasonal adjustment of key economic and social indicators, which are aggregates and give different results if adjusted directly or indirectly (through the aggregation of each seasonally adjusted component). Finally, the problem of usefulness of seasonally adjusted data manifests itself for series that are largely irregular, posing then the need for further smoothing.

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You weren't, you were paying about 90p, of which 70% (63p) was tax, and 27p actual fuel

Now you're paying 120p, of which 65% (78p) is tax, and 42p actual fuel

Yes the fuel price has soared by 50% from 27p to 42p

But the tax take has risen 25% too, and represents half of the nominal increase in prices, the rest is crude prices/exchange rate

In my book that DEMANDS 50%+ interest rates.

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GDP growth figures are quoted in constant prices. Don't let facts get in the way of your opinion.

from the ONS

how do they adjust the figures tp ignore for price change?

do they pop into Currys and see how much X TV is...then into Dixons and see how much it is there?

How do they do this?

specially with the Government spending bit...

How?

What about transport costs...is it still the miles travelled? or the costs of the miles travelled?

Methinks that one sentence means the figures are entirely...meaningless.

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how do they adjust the figures tp ignore for price change?

do they pop into Currys and see how much X TV is...then into Dixons and see how much it is there?

How do they do this?

specially with the Government spending bit...

How?

What about transport costs...is it still the miles travelled? or the costs of the miles travelled?

Methinks that one sentence means the figures are entirely...meaningless.

Try here

or here

edit for link

Edited by davidcameron

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Try here

or here

edit for link

here is the first fiddle...from wiki

It is the market value of all final goods and services made within the borders of a country in a year.

So all those bankers assets sold....mark to market...no way...marked to model.....they should be writing this lot off every quarter.

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Posen may not have noticed inflation if MPC salaries have risen well ahead of it in recent years.

Anyone know their salary increases in recent times?

Won't they just be playing catch up with the leaders of industry and commerce? Have to attract the best minds you see.

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  • 142 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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