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silver surfer

Andrew Sentence Says Inflation Will Return

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You've got to assume that Andrew Sentance's public statements accord closely with the general view of the Bank of England.

In this article he finds many parallels with the mid to late 1980's.

http://www.telegraph.co.uk/finance/economics/11395845/Inflation-rise-will-be-cost-of-oil-price-fall-as-spending-begins.html

Now what else happened in 1989? Oh, that's it, the beginning of a whopping great HPC!

So maybe a crash is on the cards, albeit five years distant?

Edit: Sorry, my mistake, I was mixing up Andrew Sentance with Andrew Haldane, there's no reason why Sentance's views should be similar to the BofE.

Edited by silver surfer

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You've got to assume that Andrew Sentance's public statements accord closely with the general view of the Bank of England.

In this article he finds many parallels with the mid to late 1980's.

http://www.telegraph.co.uk/finance/economics/11395845/Inflation-rise-will-be-cost-of-oil-price-fall-as-spending-begins.html

Now what else happened in 1989? Oh, that's it, the beginning of a whopping great HPC!

So maybe a crash is on the cards, albeit five years distant?

The crash started 5 years Ago.

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You've got to assume that Andrew Sentance's public statements accord closely with the general view of the Bank of England.

In this article he finds many parallels with the mid to late 1980's.

http://www.telegraph.co.uk/finance/economics/11395845/Inflation-rise-will-be-cost-of-oil-price-fall-as-spending-begins.html

Now what else happened in 1989? Oh, that's it, the beginning of a whopping great HPC!

So maybe a crash is on the cards, albeit five years distant?

hes also been clamouring for rate rises since 1694. Not sure hes aligned with BoE view, rather the Citeh of London rentier view.

Edited by R K

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Just thought. Inflation never went away. It's still about 0 and in nominal terms in the last twelve months we've had massive inflation in buying houses.

Usual banker spin to suit their money printing, thievery, rhetoric.

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You've got to assume that Andrew Sentance's public statements accord closely with the general view of the Bank of England.

In this article he finds many parallels with the mid to late 1980's.

http://www.telegraph.co.uk/finance/economics/11395845/Inflation-rise-will-be-cost-of-oil-price-fall-as-spending-begins.html

Now what else happened in 1989? Oh, that's it, the beginning of a whopping great HPC!

So maybe a crash is on the cards, albeit five years distant?

I think the inflation bit will be spot on when the new CPIH comes into the mix in May?

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Interestingly there's not a single mention of the amount or the affect of lending in the UK when he's discussing the past economy. He mentions interest rates but not the amount of lending.

Yet it's often referred to these days (not enough of it) as a reason for the UK economy not "recovering" fast enough.


Oil analysts are not now expecting the rebound in oil prices we saw after the financial crisis. The recent downward shift to $50-$60 barrel looks like it will prove more persistent. So perhaps it makes more sense to look back at what happened in the mid-1980s — the other large fall in the oil price in recent history and when lower energy prices were sustained for much longer.

How irritating - can't wait until a full tank of petrol costs £15 more again.

Edited by billybong

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He's been saying rate rises for ages, he thinks the economy is going to recover and over heat.

Basically out of touch .

Too much looking into the past. Needs to look at the great unwinding and the effects an ageing population has on demand. Japan's a better indication then the UK a generation ago.

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The parallel is with the 1960/70s, not the 1980s, when the Bretton Woods exchange controls first began to fail. The order of magnitude of dollars held outside the US had become so great that it exceeded the dollar value of the US gold supply eventually forcing the US to default from the gold standard. Today, M3 (M2 + Eurodollar deposits and repo agreements held outside the US) is estimated to be around ~$20 trillion whereas M2 (dollars held inside the US) is more like $12 trillion. M3 > M2. This, however, represents just the regulated forms of money creation. Off balance sheet derivatives CMOs, CDOs etc. created via the shadow banking system have made the volume of dollar-derived money oustide the jurisdiction of the Federal Reserve orders of magnitude greater still. By 2008 this had become completely unsustainable and the US effectively defaulted from the dollar standard (and its role as lender of last resort) just as it had defaulted from the gold standard in 1971. We've been living with the fallout (aka the great unwinding) ever since.

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The crash started 5 years Ago.

Only in your kingdom of Nowhere. :P

There was a correction in prices to most parts of the UK but nowhere near to a mean reversion (in nominal or real prices). Some areas, most notably in the south-east, have more than recovered and increased from the 2008-09 correction. The only area that had anything close to full HPC was Northern Ireland but even here speculators are coming back to pick up a bargain! So, maybe it's not over there yet either!

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Too much looking into the past. Needs to look at the great unwinding and the effects an ageing population has on demand. Japan's a better indication then the UK a generation ago.

I agree, central bankers are always planning for the last crisis!

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Too much looking into the past. Needs to look at the great unwinding and the effects an ageing population has on demand. Japan's a better indication then the UK a generation ago.

Neither the "great unwinding" or an aging population is going to stop inflation returning. The price of oil will go up again, it is just a matter of time. The oil price falls have given a temporary pause to inflation by offsetting increases elsewhere. The world's population is still increasing and living standards for many in developing countries is improving. This will put greater pressure on inflation. You cannot compare deflation in Japan in the past with what is going to happen to prices in future in the UK.

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