Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Inflation At The Lowest Level Since The Great Depression

Recommended Posts

The media would alerted us to this, if it was important that is.

Lucky the FED have raised the interest rates and will nip this Depression (just in case it is actually real) in the bud.

This will cause the money supply to contract, further lowering commodity prices.

Fortunately there no upper limit on interest rates. If 0.25% is not enough they can raise and raise again.

Until they squeeze the life out the money supply and kill this depression once and for all.

It worked before in the 1930's and it will work again

Share this post


Link to post
Share on other sites

everything would have been ok in the 1930s if only they had tax credits and houing benefit! :P

,...and help to buy, and help to buy with historically low interest rates at that......why don't they just give it away?

Share this post


Link to post
Share on other sites

Most people didn't know they were living in a depression during the Great Depression.

I suspect most people (average sheep not HPC'ers) will believe we are in 'recovery' until they loose their jobs or find that next door sold for half of what they thought it was worth

not that long to find out the bear market has started, it's just about to start sinking it's teeth into 2016

Share this post


Link to post
Share on other sites

Low oil price and low inflation. It's amazingly good news though. Low house prices would be good as well.

When do the electricity and gas bills come down.

Edited by billybong

Share this post


Link to post
Share on other sites

They call it "negative inflation".

That's the good deflation.

They bad deflation, they call that, HOUSING MARKET COLLAPSES.

Spoke to an Oil man at the weekend, not really worked for 3 months. Income getting hammered. He hopes it will pick up soon.

The negative recovery is locked in.

Share this post


Link to post
Share on other sites

Atleast another year before oil price picks up. In fact there is no end in sight. A second round of lay offs in the main oil service companies has only just started. The Gulf of Mexico has been holding up better than most areas. But I see more rigs shutting down now. It didn't affect me much last year 2015. 2016 looks like it will get worse. In 1984 there was a slump in the oil industry and you could still see the wreckage in 1988 when I started.

Normally every time there is a major change in the Economy people at the top pick up some bonus. Like being told to sell off your gold to your boss before the printing presses are turned on.

I am guessing but the end of a low oil price era would be marked by large oil companies buying out the smaller (oil shale) ones at a low prices. Possibly one giant swallowing another giant. Some how I don't see this returning to normal oil price without some assets being acquired at huge discounts first.

Share this post


Link to post
Share on other sites

In the North it has pretty much been in depression since the early 80s.Hundreds of thousands of decent paid jobs have gone.Replaced by probably a few thousand good jobs and the rest NMW.The benefit payouts (and council none jobs) are all that has stopped complete collapse.Your probably looking at large areas of the north east where 70%+ of the economy comes from welfare and other state spending.

All those industries that went to the wall could of been saved for 1/100th of what the banks got.

Share this post


Link to post
Share on other sites

In the North it has pretty much been in depression since the early 80s.Hundreds of thousands of decent paid jobs have gone.Replaced by probably a few thousand good jobs and the rest NMW.The benefit payouts (and council none jobs) are all that has stopped complete collapse.Your probably looking at large areas of the north east where 70%+ of the economy comes from welfare and other state spending.

All those industries that went to the wall could of been saved for 1/100th of what the banks got.

Just seen a 3.15% savings bond on offer.

Low interest rates really are a thing of the past.

Share this post


Link to post
Share on other sites

The media would alerted us to this, if it was important that is.

Lucky the FED have raised the interest rates and will nip this Depression (just in case it is actually real) in the bud.

This will cause the money supply to contract, further lowering commodity prices.

Fortunately there no upper limit on interest rates. If 0.25% is not enough they can raise and raise again.

Until they squeeze the life out the money supply and kill this depression once and for all.

It worked before in the 1930's and it will work again

So why have commodity prices plummetted whilst global (QE) money supply expanded?

Argument doesnt stack up Im afraid.

Share this post


Link to post
Share on other sites

https://www.bondvigilantes.com/blog/2015/12/23/oil-price-fall-failing-to-pump-deflation/?source=twitter#

Self-limiting impact of falls in oil price on inflation due to fix costs, duty, VAT, transportation etc as well as impact of falling price on CPI weighting

(I havent pasted from blog article as it requires an "acceptance" to content agreement on front page)

Share this post


Link to post
Share on other sites

https://www.bondvigilantes.com/blog/2015/12/23/oil-price-fall-failing-to-pump-deflation/?source=twitter#

Self-limiting impact of falls in oil price on inflation due to fix costs, duty, VAT, transportation etc as well as impact of falling price on CPI weighting

(I havent pasted from blog article as it requires an "acceptance" to content agreement on front page)

Just on the chart in the link. The chart line seems to be shifted quite a bit too high

- UK fuel is about 100p per litre for an oil price currently a bit below $40 per barrel - chart shows it should be about 120p per litre.

- UK fuel was about 135p per litre when the oil price was about $140 per barrel - chart shows it should have been about 230p per litre.

I doubt that the fuel price is/was being subsidised - possibly quite the opposite.

Just saying - it doesn't seem to alter the general message in the article though.

Edited by billybong

Share this post


Link to post
Share on other sites

Just on the chart in the link. The chart line seems to be shifted quite a bit too high

- UK fuel is about 100p per litre for an oil price currently a bit below $40 per barrel - chart shows it should be about 120p per litre.

- UK fuel was about 135p per litre when the oil price was about $140 per barrel - chart shows it should have been about 230p per litre.

I doubt that the fuel price is/was being subsidised - possibly quite the opposite.

Just saying - it doesn't seem to alter the general message in the article though.

I think it is meant to be "illustrative" of the relationship rather than a direct historical representation, also depends on moves in sterling/dollar and changes in duty. But overall message remains that in UK at least % falls in oil price have a progressively lesser impact on inflation (or disinflation/deflation).

I dont know if the fiscal authorities have designed it thus to lean against CPI volatility/deflation or whether they have simply slapped duty on petrol and that is a coincidental outcome. It would be interesting to know............

Edited by R K

Share this post


Link to post
Share on other sites

I think it is meant to be "illustrative" of the relationship rather than a direct historical representation, also depends on moves in sterling/dollar and changes in duty. But overall message remains that in UK at least % falls in oil price have a progressively lesser impact on inflation (or disinflation/deflation).

I dont know if the fiscal authorities have designed it thus to lean against CPI volatility/deflation or whether they have simply slapped duty on petrol and that is a coincidental outcome. It would be interesting to know............

I think one reason (apart from the clear fund raising aspect) might have been to dampen shocks to the economy as a result of oil price volatility like in the 1970s when Opec started to influence the price a lot and the oil price suddenly shot up massively - or at least that would be one of their justifications. That would tie in with leaning against CPI effects.

Edited by billybong

Share this post


Link to post
Share on other sites

Oil (and most commodities) likely to have rip roaring rallies Q1. Largely bcos US$ to correct but also bcos huuuge negative sentiment on them.

Longer term still in bear.

Still #turningjapanese whatever happens to commodities short term.

Deflationary forces overwhelmingly bigger than inflationary ones, long term.

Share this post


Link to post
Share on other sites

Spoke to an Oil man at the weekend, not really worked for 3 months. Income getting hammered. He hopes it will pick up soon.

Unlikely. My 30 year IT career ended just after my 50th birthday, 4 years ago.

Now I have a much better quality of life. No interaction with the State or it's Regime whatsoever. Get by in the black economy, local or on darknet.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • Next General Election   90 members have voted

    1. 1. When do you predict the next general election will be held?


      • 2019
      • 2020
      • 2021
      • 2022

    Please sign in or register to vote in this poll. View topic


×

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.