Jump to content
House Price Crash Forum
Realistbear

Shop Inflation Collapses "unexpectedly"

Recommended Posts

http://www.bloomberg.com/news/2011-06-07/u-k-shop-price-inflation-eases-as-stores-cut-prices-to-attract-consumers.html

U.K. shop-price inflation slowed in May to its weakest pace this year as retailers offered more discounts to tempt shoppers, the British Retail Consortium said.

Translated: Due to inability to pay high prices shoppers only buy when sellers drop them. How a deflationary spiral is begun. Simple.

Deflation cometh and it doeth so quicker than wot many thought.

We were told to expect the unexpected and its here.

Share this post


Link to post
Share on other sites

Your deflation spin is a little tiring now. If you read the article it actually says prices have still gone up both YOY and MOM, just not as fast as before. Prices are still increasing, just not as fast as in the previous month. Obviously a good news, but not exactly deflation or falling prices.

Edited by BalancedBear

Share this post


Link to post
Share on other sites

I see another inflation vs. deflation debate evolving...

"You can get a headache thinking about inflation and deflation - but either way you stand to end up broke. Either you'll be rolling in worthless money or you won't have any money. The banana peel of destiny can send you flying in either direction, or first one and then the other." -- James Howard Kunstler

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2011-06-07/u-k-shop-price-inflation-eases-as-stores-cut-prices-to-attract-consumers.html

U.K. shop-price inflation slowed in May to its weakest pace this year as retailers offered more discounts to tempt shoppers, the British Retail Consortium said.

Translated: Due to inability to pay high prices shoppers only buy when sellers drop them. How a deflationary spiral is begun. Simple.

Deflation cometh and it doeth so quicker than wot many thought.

We were told to expect the unexpected and its here.

As soon as it looks likely merv will print like mad - deflation will not be allowed to happen.

Share this post


Link to post
Share on other sites

As soon as it looks likely merv will print like mad - deflation will not be allowed to happen.

Yep, the west decided that in 2000 after the Nasdaq popped, didnt stop it happening in 2008 though, by the time theyd stopped it again asset prices and commodity prices had dropped more than 50%. I dont fancy holding through that sort of decline whilst they try to stop it again.

Very very confident the next inflationary move being bet upon has already happened, the buy time was end of 08 (when everyone was crapping themselves about deflation) huge piling in and certainty has only really come about in 2010, anybody holding out for inflation based performance 11 through 13 looks to me ultimately like getting their ass handed to them on a golden/silver platter, one that will be worth considerably less come 2013. Meanwhile the stockmarkets still cant extend there 2007 highs despite all this imminent/current inflation and have been developing rollover formations for over for almost a year. And the booming BRics that will drive this forward, well funnily enough their stock markets have mostly been unable to take out their highs of last November.

And the UK govt has just reintroduced NSI to help the savers - rightyo.

There are so many signs out there of what might well happen the next 2-3 years, just as there were alarm bells and signs for the deflationists of what might happen the last 2 to 3 years

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

As soon as it looks likely merv will print like mad - deflation will not be allowed to happen.

Very true, they believe they can control inflation, but they know very well they cannot control deflation.

Share this post


Link to post
Share on other sites

Your deflation spin is a little tiring now. If you read the article it actually says prices have still gone up both YOY and MOM, just not as fast as before. Prices are still increasing, just not as fast as in the previous month. Obviously a good news, but not exactly deflation or falling prices.

Its just like the property market. You start with slowly increasing prices and eventualy end with a frenzy as they near a peak. Then they start to slow. Very slow in the begeening. But then the MoM starts to go a bit negative, then Q on Q and bingo! Before you know it prices have reversed and are actually deflating.

It all starts slowly, almost imperceptibly and many get caught out because they are like the proverbial frog in the kettle.

Remember: the economy is cyclical. A cyle needs up and downs.

Share this post


Link to post
Share on other sites

I saw £2.18 for a small pack of caramel digestives in the Co-op, and 4 tins of chopped tomatoes for £2+. These were reduced also! Expensive!

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2011-06-07/u-k-shop-price-inflation-eases-as-stores-cut-prices-to-attract-consumers.html

U.K. shop-price inflation slowed in May to its weakest pace this year as retailers offered more discounts to tempt shoppers, the British Retail Consortium said.

Translated: Due to inability to pay high prices shoppers only buy when sellers drop them. How a deflationary spiral is begun. Simple.

Deflation cometh and it doeth so quicker than wot many thought.

We were told to expect the unexpected and its here.

Deflation in certain electronic gadgets and large-screen TVs, you mean? Specifically where else are you seeing prices fall? All I see are rises - from energy to broadband connections to bread to cereals to pretty much everything a person really needs.

Share this post


Link to post
Share on other sites

The economy is already screwed by high inflation, it was screwed before by hyperinflation in the propoerty/land market. Now, this time they have taken out everyone (bar the too big o fails which they explicitly bailed out).

Kunt & Co have no perception of the disastrous nature of their own policies, everybody else though will one way or anohter even if they still don't realize the cause.

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2011-06-07/u-k-shop-price-inflation-eases-as-stores-cut-prices-to-attract-consumers.html

U.K. shop-price inflation slowed in May to its weakest pace this year as retailers offered more discounts to tempt shoppers, the British Retail Consortium said.

Translated: Due to inability to pay high prices shoppers only buy when sellers drop them. How a deflationary spiral is begun. Simple.

Deflation cometh and it doeth so quicker than wot many thought.

We were told to expect the unexpected and its here.

...the key is to change your buying and eating habits.....buy different stuff, stuff people are not buying....I now refuse to buy Danish butter that has gone up to £1.60 a pack I saw the other day.....I will never buy it when there is such a high price differential for what is basically the same product, if it goes back on offer 2 for 2 that will be different.....

If shoppers want lower prices they will have to vote with their pockets..refuse to buy over priced merchandise, but also refuse to buy poor quality processed convenience foods....shop wiser and smarter....sometimes you are only paying for a name. ;)

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2011-06-08/pound-approaches-one-month-low-versus-euro-as-shop-price-inflation-slows.html

Pound Approaches One-Month Low Versus Euro as Shop-Price Inflation Slows
By Paul Dobson - Jun 8, 2011 7:23 AM GMT+0100
The pound traded within half a penny of its weakest level against the euro in a month as a report showed U.K. shop-price inflation decelerated in May to its slowest pace this year.

Chances of Merv hiking now are in the minus percentage levels.

People are bound to reign in spending as fuel bills rocket and eventually the lack of spending willl bring the entire edifice down--including house prices.

Embrace deflation--its what the Doctor has ordered for a very sick bloated economy.

Edit: Strategic buying is a good thing. We are too consumerist as it is and have capacity to cut overall consumption by 50%. If that happens prices will continue to head in the downward direction.

Edited by Realistbear

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2011-06-08/pound-approaches-one-month-low-versus-euro-as-shop-price-inflation-slows.html

Pound Approaches One-Month Low Versus Euro as Shop-Price Inflation Slows
By Paul Dobson - Jun 8, 2011 7:23 AM GMT+0100
The pound traded within half a penny of its weakest level against the euro in a month as a report showed U.K. shop-price inflation decelerated in May to its slowest pace this year.

Chances of Merv hiking now are in the minus percentage levels.

People are bound to reign in spending as fuel bills rocket and eventually the lack of spending willl bring the entire edifice down--including house prices.

Embrace deflation--its what the Doctor has ordered for a very sick bloated economy.

Edit: Strategic buying is a good thing. We are too consumerist as it is and have capacity to cut overall consumption by 50%. If that happens prices will continue to head in the downward direction.

If food is too expensive, people starve to death, prices do not come down.

Share this post


Link to post
Share on other sites

If food is too expensive, people starve to death, prices do not come down.

We are nation of increasingly numerous fatties. I observe the average shopping cart when in Tescos and see half or more is rubbish food: crisps, expensive fizzy drinks and other junk food.

People could halve their shopping bills and live healthier lives by selective and educated buying.

Same goes for our greedy hunger for the latest tattersall. Do people REALLY need a 3d TV or could they not buy and settle with their outdated 2 year old Neoplasma TV? Do people really need to constantly upgrade? I have a Canon 450d digital SLr that the magazines describe as outdated and surpassed by the latest 600d. Well, I ain't buying and if enough people just said no prices would have to tumble and I don't notice any deterioration in my life.

Share this post


Link to post
Share on other sites

http://www.bloomberg.com/news/2011-06-07/u-k-shop-price-inflation-eases-as-stores-cut-prices-to-attract-consumers.html

U.K. shop-price inflation slowed in May to its weakest pace this year as retailers offered more discounts to tempt shoppers, the British Retail Consortium said.

Translated: Due to inability to pay high prices shoppers only buy when sellers drop them. How a deflationary spiral is begun. Simple.

Deflation cometh and it doeth so quicker than wot many thought.

We were told to expect the unexpected and its here.

nonsense

Share this post


Link to post
Share on other sites

We are nation of increasingly numerous fatties. I observe the average shopping cart when in Tescos and see half or more is rubbish food: crisps, expensive fizzy drinks and other junk food.

People could halve their shopping bills and live healthier lives by selective and educated buying.

Same goes for our greedy hunger for the latest tattersall. Do people REALLY need a 3d TV or could they not buy and settle with their outdated 2 year old Neoplasma TV? Do people really need to constantly upgrade? I have a Canon 450d digital SLr that the magazines describe as outdated and surpassed by the latest 600d. Well, I ain't buying and if enough people just said no prices would have to tumble and I don't notice any deterioration in my life.

Irrelevent pathetic distraction tactic cobblers.

If prices go up, people can't afford what they used to. Prices do not have to come back down, people can remain priced out.

Yes, the BoE is relying on this slack in peoples habits to get away with hyperinflating the currency to pay the bankers debts off via money printing.

Share this post


Link to post
Share on other sites

If prices go up, people can't afford what they used to. Prices do not have to come back down, people can remain priced out.

It's not quite as straightforward as that though is it?

When prices rise or incomes fall spending habits change. Discretionary spending is the first to go. Trips to the cinema, meals out, buying the latest fashions, the latest electronic toy/gadget are the first to fall. Retailers have to respond by cutting prices.

Essentials like food have to be purchased. But if you look at what's on sale in the supermarket there are lots of ways the weekly food bill can be reduced. Cut out ready meals, soft drinks, confectionery. There are lots of things that are bought that are comfort eating rather than essential nourishment. If things get really bad you can even cut out staples like a bag of sugar.

You're right people can't afford what they used to but they can become used to less. And less can be more.

Share this post


Link to post
Share on other sites

We are nation of increasingly numerous fatties. I observe the average shopping cart when in Tescos and see half or more is rubbish food: crisps, expensive fizzy drinks and other junk food.

People could halve their shopping bills and live healthier lives by selective and educated buying.

Same goes for our greedy hunger for the latest tattersall. Do people REALLY need a 3d TV or could they not buy and settle with their outdated 2 year old Neoplasma TV? Do people really need to constantly upgrade? I have a Canon 450d digital SLr that the magazines describe as outdated and surpassed by the latest 600d. Well, I ain't buying and if enough people just said no prices would have to tumble and I don't notice any deterioration in my life.

I'm sorry but this doesn't make any sense to me - why would prices have to fall?

Take food, for example. If the costs of fertilizers are growing, and the sort of products shoppers are interested in are starting to interest consumers in the second world (just check out diabetes rates in India), agricultural land is at a premium and being used to grow crops for fuel etc. why would prices "have" to fall just because British shoppers are broke?

You can make a similar case for all sorts of other products. We'll just have to get used to making do with less, but that doesn't mean prices will fall - on the contrary. As you point out the pound is low at the minute, fuel prices are rising again as are commodities generally. Global demand is increasing - only Western demand is collapsing.

Share this post


Link to post
Share on other sites

It's not quite as straightforward as that though is it?

When prices rise or incomes fall spending habits change. Discretionary spending is the first to go. Trips to the cinema, meals out, buying the latest fashions, the latest electronic toy/gadget are the first to fall. Retailers have to respond by cutting prices.

Where they can, yes they do. Selling less stuff to fewer people because they can't afford it is inflation in action.

Essentials like food have to be purchased. But if you look at what's on sale in the supermarket there are lots of ways the weekly food bill can be reduced. Cut out ready meals, soft drinks, confectionery. There are lots of things that are bought that are comfort eating rather than essential nourishment. If things get really bad you can even cut out staples like a bag of sugar.

You're right people can't afford what they used to but they can become used to less. And less can be more.

Which is just saying that inflation can lead to better food choices.

Right.

And?

Share this post


Link to post
Share on other sites

I'm sorry but this doesn't make any sense to me - why would prices have to fall?

Take food, for example. If the costs of fertilizers are growing, and the sort of products shoppers are interested in are starting to interest consumers in the second world (just check out diabetes rates in India), agricultural land is at a premium and being used to grow crops for fuel etc. why would prices "have" to fall just because British shoppers are broke?

You can make a similar case for all sorts of other products. We'll just have to get used to making do with less, but that doesn't mean prices will fall - on the contrary. As you point out the pound is low at the minute, fuel prices are rising again as are commodities generally. Global demand is increasing - only Western demand is collapsing.

Price is driven by supply + demand.

In an oversupplied world with shrinking demand prices might drop.

We live in a world of overcapacity for most consumer goods. The insatiable demand for Chinese tattersall is slowing which in turn is slowing China's economy. When they slow they buy less commodities and when that happens supply will increase as demand decreases and prices then have only one way to go.

You cannot beat the market. Price, supply and demand are interwined and the one affects the other. Never been any different.

Edited by Realistbear

Share this post


Link to post
Share on other sites

I'm sorry but this doesn't make any sense to me - why would prices have to fall?

Take food, for example. If the costs of fertilizers are growing, and the sort of products shoppers are interested in are starting to interest consumers in the second world (just check out diabetes rates in India), agricultural land is at a premium and being used to grow crops for fuel etc. why would prices "have" to fall just because British shoppers are broke?

You can make a similar case for all sorts of other products. We'll just have to get used to making do with less, but that doesn't mean prices will fall - on the contrary. As you point out the pound is low at the minute, fuel prices are rising again as are commodities generally. Global demand is increasing - only Western demand is collapsing.

Realistbear is relying on peoples ego "well I can't go short" and the expectation set most folks have that tomorrow will be like today to make his case for deflation. It's quite clever behavioural economics/persuasion and also complete bilge. All you get that way is some very boiled frogs and some very rich bankers.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 311 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.