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From the BBC:

Bank has 'failed' over inflation

My favourite part:

"The MPC's remit is clearly to achieve the 2% inflation target: it remains totally committed to that target and sets interest rates solely in order to achieve it," a spokesman for the Bank of England said.

On money box today on R4 they had a fund manager who described the bank of Englands forecasts as consistently wrong over the last two years and said that the banks purpose is to control inflation then they have failed in their job. Obvious really but good to hear from someone on national radio.

They also said that in May last year the bank forecasts today's inflation rate to be 1.4%!!

Edit: it was the same guy in the article!

Edited by Pent Up

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From the BBC:

Bank has 'failed' over inflation

My favourite part:

"The MPC's remit is clearly to achieve the 2% inflation target: it remains totally committed to that target and sets interest rates solely in order to achieve it," a spokesman for the Bank of England said.

I go along with Roger Bootle on this

http://www.telegraph.co.uk/finance/financevideo/yourmoneytheirhands/8316194/Roger-Bootle-Rates-could-rise-in-May.html

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They keep saying that there is no sigh yet of a wage price spiral. Yet say for example next months pay figures come in higher than expected it will already be too late to bring inflation down. Raising rates takes months to have effect. The spiral would be well and truly under way before the first months rise even had an impact. It seems to me that they are taking a massive gamble on a huge commodity crash within the next few months.

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basically they have no idea what they are doing.

my anti-inflation recipe - set interest rates at 4% forever, better yet, get rid of the central bank and let the market set rates.

prevent the government from borrowing new money - if they want to "invest" they have to save up for it first.

Edited by LJAR

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Since GB handed over the setting or rates to the Wa-k of England with the remit to keep inflation at 2% , they have never kept the inflation rate at 2% ever , the inflation figures have been a lie for years and years.

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prevent the government from borrowing new money - if they want to "invest" they have to save up for it first.

This is practically impossible with a debt based monetray system as we have.

Without debt there is no money as all money is created as debt.

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They keep saying that there is no sigh yet of a wage price spiral. Yet say for example next months pay figures come in higher than expected it will already be too late to bring inflation down. Raising rates takes months to have effect. The spiral would be well and truly under way before the first months rise even had an impact. It seems to me that they are taking a massive gamble on a huge commodity crash within the next few months.

But we desperately need wage rises inflating the debt away is the only answer. I do feel sorry for the savers but it's the big corporations that hold most of the money and inflation seems the only way of taxing them.

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They keep saying that there is no sigh yet of a wage price spiral. Yet say for example next months pay figures come in higher than expected it will already be too late to bring inflation down. Raising rates takes months to have effect. The spiral would be well and truly under way before the first months rise even had an impact. It seems to me that they are taking a massive gamble on a huge commodity crash within the next few months.

That's the argument of the hawks on the panel. But they are either hoping and gambling as you say, or engineering a spiral. If you see wages rising and still limited action from the BOE, then it's time to load up on debt with fixed rates.

There views are looking rather isolated on the world stage given the movement from other central banks though.

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But we desperately need wage rises inflating the debt away is the only answer. I do feel sorry for the savers but it's the big corporations that hold most of the money and inflation seems the only way of taxing them.

He is talking about a global spiral. The UK couldn't do it alone without consequence.

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_53938506_inflation_predictions_464.gif

basically the policy is to just keep saying inflation will fall back to 2% in a few years time...

Nice work by the bbc for generating this chart. I've been quite interested for while to see how the BoEs previous predictions compare to the reality and I suspected that the chart would look like this. Economists are an odd bunch they like to mince up their words so no one understands what they are doing and can come back at them. The reality is that if you need to control how an economy contracts in a fair way you need to make sure the people who have borrowed don't get burnt too much and to do this you need to steal from the savers. The things that need to be compared are inflation compared to interest rates and pay rises. People aren't prepared to take a pay cut but give them a pay rise that's less than inflation or no pay rise at all and they probably won't complain, it's human nature. If there is enough inflation and low pay rises and low interest rates the government monetises its debt and the debt from mortgages is reduced. They can't admit to this because it would cause panic and also cause people to invest their money abroad and in the things that are inflating like commodities, which would just add positive feedback and inflate things even more. The thing you kids need to understand is that this is the unwritten scheme of the Bank of England, and it seems to be going to plan. ;)

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Without debt there is no money as all money is created as debt.

Clearly nonsense. In order to create new money, existing money has to be deposited and re-lent (QE not withstanding).

ergo there must be a certain amount of "base money".

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basically they have no idea what they are doing.

my anti-inflation recipe - set interest rates at 4% forever, better yet, get rid of the central bank and let the market set rates.

prevent the government from borrowing new money - if they want to "invest" they have to save up for it first.

they are doing what they said they would...keeping up asset prices so that the "financial system" remains.

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Clearly nonsense. In order to create new money, existing money has to be deposited and re-lent (QE not withstanding).

ergo there must be a certain amount of "base money".

yes, its called FIAT and is based on the tax take of the UK.

160bn deficit says each and every £ FIAT in your pocket is going south for the KWInter.

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From the BBC:

Bank has 'failed' over inflation

My favourite part:

"The MPC's remit is clearly to achieve the 2% inflation target: it remains totally committed to that target and sets interest rates solely in order to achieve it," a spokesman for the Bank of England said.

That's like Wayne Rooney saying he's totally committed to only ever having sex with Coleen.

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it remains totally committed to that target and sets interest rates solely in order to achieve it," a spokesman for the Bank of England said.

That's OK then. :)

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Clearly nonsense. In order to create new money, existing money has to be deposited and re-lent (QE not withstanding).

ergo there must be a certain amount of "base money".

It's not nonsense, it's fact. You are confusing the debt based monetary system with fractional reserve banking (which we have on top of a debt based monetary system and which adds to problems of the debt based monetary system).

In the UK, with the exception of coins (which are insignificant), all money is created as debt.

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It's not nonsense, it's fact. You are confusing the debt based monetary system with fractional reserve banking (which we have on top of a debt based monetary system and which adds to problems of the debt based monetary system).

In the UK, with the exception of coins (which are insignificant), all money is created as debt.

I'd argue that the act of depositing said bank credit into NS&I or any current account covered by the deposit guarantee scheme, one is converting their holdings into fiat on a de facto basis.

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"But the remit also explicitly allows the MPC some flexibility when the very sharp movements in interest rates, that would be required to keep inflation at 2% at all times, would cause unnecessary damage to the economy, employment, and people's living standards."

Surely they are taking the piss, there haven't been any movements for years now, the bank base rate has flatlined like some patient on a mortuary slab.

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Nice work by the bbc for generating this chart. I've been quite interested for while to see how the BoEs previous predictions compare to the reality and I suspected that the chart would look like this. Economists are an odd bunch they like to mince up their words so no one understands what they are doing and can come back at them. The reality is that if you need to control how an economy contracts in a fair way you need to make sure the people who have borrowed don't get burnt too much and to do this you need to steal from the savers. The things that need to be compared are inflation compared to interest rates and pay rises. People aren't prepared to take a pay cut but give them a pay rise that's less than inflation or no pay rise at all and they probably won't complain, it's human nature. If there is enough inflation and low pay rises and low interest rates the government monetises its debt and the debt from mortgages is reduced. They can't admit to this because it would cause panic and also cause people to invest their money abroad and in the things that are inflating like commodities, which would just add positive feedback and inflate things even more. The thing you kids need to understand is that this is the unwritten scheme of the Bank of England, and it seems to be going to plan. ;)

Well, yeah, and they even tell you they are doing it. They say "the economy is too weak at the moment, there won't be any interest rates rises, but the good news is, inflation will fall back to target by itself".

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On money box today on R4 they had a fund manager who described the bank of Englands forecasts as consistently wrong over the last two years and said that the banks purpose is to control inflation then they have failed in their job. Obvious really but good to hear from someone on national radio.

They also said that in May last year the bank forecasts today's inflation rate to be 1.4%!!

Edit: it was the same guy in the article!

They have not failed to control Inflation - it's EXACTLY where they want it to be...

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They have not failed to control Inflation - it's EXACTLY where they want it to be...

Why would that be ?

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"The MPC's remit is clearly to achieve the 2% inflation target: it remains totally committed to that target and sets interest rates solely in order to achieve it," a spokesman for the Bank of England said.

"But the remit also explicitly allows the MPC some flexibility when the very sharp movements in interest rates, that would be required to keep inflation at 2% at all times, would cause unnecessary damage to the economy, employment, and people's living standards."

Disingenuous to say the least seeing as the 2% target was confirmed.

The BoE retaining credibility as liars and thieves.

disingenuous

adjective

Marked by treachery or deceit: devious, duplicitous, guileful, indirect, lubricious, shifty, sneaky, underhand, underhanded.

Not noble; unbecoming true honor or dignity; mean; unworthy; fake or deceptive.

Not frank or open; uncandid; unworthily or meanly artful.  

Edited by billybong

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  • 312 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
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      • up 5%



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