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Inflation - How On Earth Is This Decreasing?

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Oil is rocketing up.

Houses are rocketing up according to some reports.

Gold is rocketing up.

Gas is going up.

Council tax is going up.

etc

(place just about anything you want in this list!!)

etc

So what is coming down to decrease GB's favourite inflation measure?

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So what is coming down to decrease GB's favourite inflation measure?

DVD players, particularly when bought online rather than retail.

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DVD players, particularly when bought online rather than retail.

Yeah all the essential stuff is coming down. I hear LCD screen tv's are going to halve in price.

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Oil is rocketing up.

Houses are rocketing up according to some reports.

Gold is rocketing up.

Gas is going up.

Council tax is going up.

etc

(place just about anything you want in this list!!)

etc

So what is coming down to decrease GB's favourite inflation measure?

Food, clothes, cars, electronic and electrical equipment.

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So what is coming down to decrease GB's favourite inflation measure?

Hamsters - or other small [hedonically adjusted] pets

Pets are just for Christmas remember!

....and Lubricants :huh:

The largest downward effect on the CPI annual rate came from transport for the second successive month, due to large downward contributions from air travel and fuels and lubricants.

http://www.statistics.gov.uk/cci/nugget.asp?id=19

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Food, clothes, cars, electronic and electrical equipment.

Basically, everything you spend with your MEW money. Food is the aberation. It takes 1 to 2 years for higher oil prices to work into higher food prices via fertilizers and transport. Food is not counted in core inflation figures anyhow as, like housing, it is not a necessity. :rolleyes:

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Oil is rocketing up.

Houses are rocketing up according to some reports.

Gold is rocketing up.

Gas is going up.

Council tax is going up.

etc

(place just about anything you want in this list!!)

etc

So what is coming down to decrease GB's favourite inflation measure?

Tesco mentioned their prices deflating c.2% and costs up c.3%.

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jp1.

Hamsters - or other small [hedonically adjusted] pets

LOL,

Their utility value has risen in the cold weather too, you can perch them on your ears in the imclement weather.

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You have to take into account the proportion of a person's monthly spend spent on each item in the list. It's easy to say that some things are showing very high rises, but whilst others, that may take up a higher proportion of a person's income are falling, the overall balance of inflation may be lower than you expect.

Especially true in this day and age, when the avg 22 Y.O. spend SFA on bills and 90% of their income (topped up with ratcheting up their CC balance <_< ) on travelling with Ryanair, Easyjet and buying eletronics & DVD's.

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You have to take into account the proportion of a person's monthly spend spent on each item in the list. It's easy to say that some things are showing very high rises, but whilst others, that may take up a higher proportion of a person's income are falling, the overall balance of inflation may be lower than you expect.

Especially true in this day and age, when the avg 22 Y.O. spend SFA on bills and 90% of their income (topped up with ratcheting up their CC balance <_< ) on travelling with Ryanair, Easyjet and buying eletronics & DVD's.

We each have our own personal rate of inflation but none of us can escape $66 oil. The average person is not 22. He/she is about 40, drives alot and worries about paying taxes/mortgage.

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Anything that isn't made in China is going up.....

They printed about 9% more pounds ££££ than was needed due to economic growth last year, so I guess it's not that things are going up, it's rather the pound is losing it's purchasing power.

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I guess it's not that things are going up, it's rather the pound is losing it's purchasing power.

Indeed. The simple reality is that inflation is driven by printing money, because that money has to go _somewhere_: the more money you print, the more inflation.

And the central banks of the world have been printing vast amounts of money for the last few years.

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Indeed. The simple reality is that inflation is driven by printing money, because that money has to go _somewhere_: the more money you print, the more inflation.

And the central banks of the world have been printing vast amounts of money for the last few years.

At least, that's the quantity theory of money, which is pretty well established.

I am still trying to get my head round the method by which modern central banks print money. They don't do it by actually creating new crisp tenners. I think it's something like the following:

The BoE offers a "sale and repurchase" or repo service to investment banks. Basically, if you are an investment bank with some assets (perhaps they have to be treasury bonds?), the bank will buy them off you for a short period (say a week). At the end of the week, they will sell them back to you again, for the same price plus interest. The interest you pay over that week is the repo rate, a.k.a. the BoE base rate. Banks use this service coz they can usually make more trading with the money than they pay the BoE in interest.

The trick is this: when the BoE pays you for the assets at the beginning of the week, it does so via new money which it has created out of thin air.

Does anyone know if I have got this right?

If so, what happens to the money which is repaid by the investment bank to the BoE to get the assets back? Is it effectively destroyed / taken out of circulation?

frugalista

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Oil is rocketing up.

Houses are rocketing up according to some reports.

Gold is rocketing up.

Gas is going up.

Council tax is going up.

etc

(place just about anything you want in this list!!)

etc

So what is coming down to decrease GB's favourite inflation measure?

The word "Inflation" is too ambiguous. I prefer to use:

CPI ("Consumer Price Increases of very selected items that are meaningless to anyone breathing")

PPI ("Producer Price Increases of raw materials and wages")

HOW MUCH ("coughing fit induced by reading that council tax is going up by 10% again")

LIES ("Rapid dilution of existing money whilst claiming prices of anything important to anyone breathing are not increasing")

HPI (House Price Inflation, the way of reducing a countries populations standard of living")

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At least, that's the quantity theory of money, which is pretty well established.

I am still trying to get my head round the method by which modern central banks print money. They don't do it by actually creating new crisp tenners. I think it's something like the following:

The BoE offers a "sale and repurchase" or repo service to investment banks. Basically, if you are an investment bank with some assets (perhaps they have to be treasury bonds?), the bank will buy them off you for a short period (say a week). At the end of the week, they will sell them back to you again, for the same price plus interest. The interest you pay over that week is the repo rate, a.k.a. the BoE base rate. Banks use this service coz they can usually make more trading with the money than they pay the BoE in interest.

The trick is this: when the BoE pays you for the assets at the beginning of the week, it does so via new money which it has created out of thin air.

Does anyone know if I have got this right?

If so, what happens to the money which is repaid by the investment bank to the BoE to get the assets back? Is it effectively destroyed / taken out of circulation?

frugalista

http://www.propagandamatrix.com/multimedia...1_Part1_all.wmv

http://www.propagandamatrix.com/multimedia...pe2_128KBps.wmv

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I have watched them both already! Brilliant stuff. But, I still don't know the answer to my question.

frugalista

Perhaps you're not meant to?

It's a highly sophisiticated system honed over decades by Governments and the Central Bank to ensure that, all things being equal and the G. Soros's of the World keep their noses out, Governments get what they want.

Are we sure that the Masters of the system truly understand it and any consequences of any action of theirs?

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Perhaps you're not meant to?

It's a highly sophisiticated system honed over decades by Governments and the Central Bank to ensure that, all things being equal and the G. Soros's of the World keep their noses out, Governments get what they want.

Are we sure that the Masters of the system truly understand it and any consequences of any action of theirs?

The masters might not understand it but someone on this forum must.

Hint: if you are a 12-foot Annunaki lizard who controls the Gnomes of Zurich who control the Freemasons who control the Bilderberg group who control the Rothschilds who control the Bank of England, do us all a favour and tell us how it works.

frugalista

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This report from Reuters about BoE Deputy Governor is fascinating:

http://today.reuters.co.uk/news/newsArticl...ITAIN-LARGE.xml

from today's HPC newsblog.

Asset markets are too "frothy"

and the immortal line:

"From time to time, in my view 'well, a marginally higher rate [interest rate] at this juncture is a price worth paying, if you like, in order to make sure that you can hold the position [inflation] stable over time, which is what we need to do.'"

[my interpretation in these brackets]

Very hawkish.

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With the vast increase in the money supply via debts from banks etc, we should have seen incredible inflation as everyone wants a piece of the 'pie'?. I would have expected the price of everything to increase from DVD players to bottled water. I don't understand how things like flat screen TV's could be coming down in price.

I thought that inflation was the devaluation of the pound, and if everyone has more money, then the money is worth less. All I can assume is that the money supply in the UK hasn't increased at all, and that all this new money created by debt is flowing out of the country to e.g China?

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With the vast increase in the money supply via debts from banks etc, we should have seen incredible inflation as everyone wants a piece of the 'pie'?

Most of the money went into housing until last year, and now it's going into shares. So long as inflation is occuring in areas where most people think inflation is good, the government can pretend we're living in Happy Fluffy World.... it's only when that money moves to things like oil or other commodities which feed back into inflation of essential items that people realise they're getting screwed.

I thought that inflation was the devaluation of the pound, and if everyone has more money, then the money is worth less.

The pound is worth less than it was five years ago (something like 1/3 - 1/2 against gold, for example). But the dollar is worth even less, and the Chinese currency has risen less relative to the dollar than the dollar has dropped relative to the pound.

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This report from Reuters about BoE Deputy Governor is fascinating:

http://today.reuters.co.uk/news/newsArticl...ITAIN-LARGE.xml

from today's HPC newsblog.

Asset markets are too "frothy"

and the immortal line:

"From time to time, in my view 'well, a marginally higher rate [interest rate] at this juncture is a price worth paying, if you like, in order to make sure that you can hold the position [inflation] stable over time, which is what we need to do.'"

[my interpretation in these brackets]

Very hawkish.

Unfortunately he's retiring from MPC - to be replaced by an Brownite dove-muppet

MPC members

...As a permanent secretary at the Home Office and former Treasury mandarin, some in the City see Gieve as a Gordon Brown “stooge”.

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  • 301 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%



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