zugzwang Posted August 19, 2014 Share Posted August 19, 2014 There's no consumer price inflation because there's no consumer demand. There's no consumer demand because there's no wage inflation. There's no wage inflation because there's no recovery. Quote Link to comment Share on other sites More sharing options...
pathfinder Posted August 19, 2014 Share Posted August 19, 2014 So I take it these charts don’t take into account of quality of goods/services and volume per unit? The size of the bottles of spirits look ridiculous. As a matter of principle I refuse to commute (working locally) on trains anymore, inflation is eye popping. I hope the powers that be are not expecting a nice controlled percentile drop in consumption. Quote Link to comment Share on other sites More sharing options...
GloomMonger Posted August 19, 2014 Share Posted August 19, 2014 There's no consumer price inflation because there's no consumer demand. There's no consumer demand because there's no wage inflation. There's no wage inflation because there's no recovery. Quote Link to comment Share on other sites More sharing options...
bankstersparadise Posted August 19, 2014 Share Posted August 19, 2014 There's no consumer price inflation because there's no consumer demand. There's no consumer demand because there's no wage inflation. There's no wage inflation because there's no recovery. Disagree with most but agree that wage inflation is a headwind. However, here is no wage inflation because marginal demand for labour gets satisfied by immigration, so the labour market is not getting tighter, which means low wage inflation which is deflationary. However, the main reason CPI is falling is because there are many items which are deliberately excluded or reduced in the CPI in order to massage the figures to hide the UK's structural inflation problem.* These are the items which are inflating very quickly and destroying demand for the other items which are included in the CPI. So in fact deliberately hidden runaway inflation in housing, energy, fuel and food is deflationary for the official CPI print. Magic. Quick give Carney some more housing expenses and a nice bonus. * The reason why they hide the structural inflation problem is two fold: 1) so the sheeple don't realise how quickly their purchasing power is getting eroded. 2) so the bond market thinks we have things under control and doesn't lose faith in the pound/gilts. Quote Link to comment Share on other sites More sharing options...
winkie Posted August 19, 2014 Share Posted August 19, 2014 I take it everyone is waiting for a house price recovery....the only thing that can save us. Quote Link to comment Share on other sites More sharing options...
bankstersparadise Posted August 19, 2014 Share Posted August 19, 2014 I take it everyone is waiting for a house price recovery....the only thing that can save us. Yes then we have more collateral to get more debt so we can buy more crap. That is the UK PLC business model, thanks for shopping. Quote Link to comment Share on other sites More sharing options...
katchytitle Posted August 19, 2014 Share Posted August 19, 2014 What about the "shrinkage inflation"? They only seem to measure 1 unit as a bottle or an item of clothing or packet of coffee etc? Chocolate bars have got tiny (take a look at tracker bars at a supermarket and you have to laugh!). They are replacing Robusta coffee beans with a cheaper variety but keeping prices the same and making clothes with less double stitching and cheaper cloth. Its all a bit of a joke really if you look at shadowstats.com (albeit US focussed) you can see that governments simply change the way that inflation is measured to show what they want to show. They are desperate for demand and it just isn't there. "productivity" is low because we aren't taking out as many loans as we used to not because there aren't people working hard. No one can compete with exponential growth of money supply to create value. That's what the rich need to continue to trickle down wealth to the middle classes. I'm not a socialist by any means, but it seems the mechanism for generating useful products has been hijacked my money suppliers not the marketers and genuine creators of useful production in the world. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted August 19, 2014 Share Posted August 19, 2014 (edited) I do have a VI in low rates however I can't see why rates should go up. The BofE has a target rate of 2% at the moment it's 1.6% wage rises are at 0.6%. So maybe they should raise rate because people are borrowing too much? Each adult has borrowed £78.93 more than last year. However a 0.6% pay rise will mean that they have an extra £140 in pay. If you think of Thomas Piketty's r>g with growth said to be 3.5% this year return on interest should be below that figure surely? You may be wishing for your own funeral. I tend to agree with this link that low interest rates embed deflation. How do HPC savers/ skinteratti react to loss of earnings on their savings portfolios..........basically they see their asset's schedule is becalmed and their spending decisions are cut back even further...we are at the suck marrow phase. Becalmed money is not inflation it is deflation. Cataclysmic for holders of debt....look to Japan. http://www.fiercecfo.com/story/can-low-interest-rates-cause-deflation/2014-01-13 Edited August 19, 2014 by crashmonitor Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted August 19, 2014 Share Posted August 19, 2014 Treasury minister David Gauke on BBC News. Asked about the 10.2% house price inflation, Gauke - "......we've put in place Help to Buy which is helping people get onto the housing ladder...." Every day some government joker says something that reinforces my decision to vote UKIP. LOL. HAHAHAHAHAHA Yeah UKIP will be #capitalists. ROFL. No, please, stop! Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted August 19, 2014 Share Posted August 19, 2014 Not surprised the inflationistas are quiet. #turningjapanese Look at Govt bond yields. Yet many on HPC still can't see the light at the end of the tunnel. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 19, 2014 Share Posted August 19, 2014 (edited) LOL. HAHAHAHAHAHA Yeah UKIP will be #capitalists. ROFL. No, please, stop! Did I say they would be? Voting UKIP is the surest way I know of kicking LibLabCon in the nuts! Edited August 19, 2014 by Bruce Banner Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted August 19, 2014 Share Posted August 19, 2014 (edited) Clothing and footwear category was the largest contributor to the fall. Sterling immediately gapped down by half a cent against the dollar. http://www.ons.gov.uk/ons/dcp171778_374190.pdf Thanks. Comments last month was that the clothing retailers discounted later holding that cpi month up. Now has the effect unwound ? Interesting if it has because suggests that many are looking at the headline number only? Edited August 19, 2014 by Ash4781 Quote Link to comment Share on other sites More sharing options...
cool_hand Posted August 19, 2014 Share Posted August 19, 2014 1.6% is BS IMO. Quote Link to comment Share on other sites More sharing options...
renting til I die Posted August 19, 2014 Share Posted August 19, 2014 I'm thinking no interest rate rises, no house price crash. But a sudden dawning on those holding richly prices assets that it doesn't work as we go Japanese.........no asset appreciation, no mortgage shrinkage, just ball crunching stagnation and a life sentence for those who filled their boots with debt. Suddenly cash looks bloody attractive at 2%. A definite possibility. Although nothing is set in stone. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted August 19, 2014 Share Posted August 19, 2014 As Killer Bunny suggests, I can see the light, and it is not nice. A right cluster-uck. The public should be outraged the current dross are so very bad. I too, like Bruce, will be voting UKIP, like many, many others. I "just" want our current crop of scum to realise Joe Public decide. Quote Link to comment Share on other sites More sharing options...
frederico Posted August 19, 2014 Share Posted August 19, 2014 The numbers for input prices and factory gate prices were deflationary. I have no idea what this means to most people though. Presumably demand for the few things made here is dropping. Quote Link to comment Share on other sites More sharing options...
winkie Posted August 19, 2014 Share Posted August 19, 2014 The numbers for input prices and factory gate prices were deflationary. I have no idea what this means to most people though. Presumably demand for the few things made here is dropping. Not so much demand dropping....more like supply rising........all this stuff, not enough people with the money to buy it....the ones that would buy it have other more important pressures on their money.......one way is for all those with excess unwanted stuff is to give it to those who will appreciate it more......no sale made....that won't boost the economy. Quote Link to comment Share on other sites More sharing options...
onlyme2 Posted August 19, 2014 Share Posted August 19, 2014 Not surprised the inflationistas are quiet. #turningjapanese Look at Govt bond yields. Yet many on HPC still can't see the light at the end of the tunnel. We might be looking down different tunnels. A situation that Japan got away with over 25 odd years, mainly in isolation may not be applicable when most of the world plays the same game. Commodities rose and they have fallen. No doubt the banks, flush with qe money played their part on the way, but I bet they played their part on the way down too. There is a point at which production is no longer profitable and these cycles overshoot, taking investment capital with them. Too far and the world could find itself QE stuffed and commodity short (unprofitable) and that would be a real game changer. Like the norwegian blue, not dead, just resting, maybe. As for the figures themselves, untrustworthy at best. Quote Link to comment Share on other sites More sharing options...
slawek Posted August 19, 2014 Share Posted August 19, 2014 Sales volumes rising with virtually flat prices. It looks like oversupply. Strong GBP may be the reason. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted August 20, 2014 Share Posted August 20, 2014 We might be looking down different tunnels. A situation that Japan got away with over 25 odd years, mainly in isolation may not be applicable when most of the world plays the same game. Commodities rose and they have fallen. No doubt the banks, flush with qe money played their part on the way, but I bet they played their part on the way down too. I'm thinking repeated banking busts due to falling asset prices, more and more QE filling bath tub while banks gush out of hole at bottom, rinse repeat. Nothing policymakers can do avoid IMHO. $ strengthens big time... Govt bond yields go to all time lows and stay for years. On verra Quote Link to comment Share on other sites More sharing options...
onlyme2 Posted August 20, 2014 Share Posted August 20, 2014 I'm thinking repeated banking busts due to falling asset prices, more and more QE filling bath tub while banks gush out of hole at bottom, rinse repeat. Nothing policymakers can do avoid IMHO. $ strengthens big time... Govt bond yields go to all time lows and stay for years. On verra How many times before they lose control completely in regards QE, could have been close this time, it doesn't take much - only for the rest of the world to realise that they are being impoverished by allowing a few countries to print money whilst they produce the goods and their own populations are on the breadline. The $ under those circumstances as welcome as fleas on a dog. Of course yields can go to zero if the government keep printing money to them up, but in the end all you end up with is meaningless bits of paper and no confidence in the currency. Quote Link to comment Share on other sites More sharing options...
bankstersparadise Posted August 20, 2014 Share Posted August 20, 2014 $ strengthens big time... Govt bond yields go to all time lows and stay for years. US are playing the same game and structurally just as screwed. I'd park some money in the yellow shiny stuff rather than the green back. Short term, dollar will be appreciating against the pound for a few months however as people come to terms with the fact we won't be raising rates. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted August 20, 2014 Share Posted August 20, 2014 so many do not look at the reality just the expectation $ index has been on rising trend for getting on for 3 years, big move up may have started last few weeks Quote Link to comment Share on other sites More sharing options...
bankstersparadise Posted August 20, 2014 Share Posted August 20, 2014 so many do not look at the reality just the expectation $ index has been on rising trend for getting on for 3 years, big move up may have started last few weeks Why do you care about the dollar index? This is still 60% Euro with 10% JPY, GBP CAD etc and small CHF and SEK thrown in for good measure. Recent move is the realisation that the Eurozone has to jump on the QE band wagon to remain solvent. Solvent in freshly minted, depreciated Euro terms that is. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted August 20, 2014 Share Posted August 20, 2014 Not much inflation anywhere except Japan... and that's a freakish outlier caused by Abe's consumption tax hike. Note the trend since 2011. Quote Link to comment Share on other sites More sharing options...
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