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oatbake

Inflation is back

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3 minutes ago, oatbake said:

Print billions...lower interest rates get inflation...or state sponsored theft in this case.

 

 

 

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4 minutes ago, oatbake said:

Interesting line. 

The BoE knows 5% interest rates are the medicine that will kill the patient. 

My view is that the most politically acceptable method of sorting out insane property prices is to inflate everything you to meet them. Far more palatable than a crash in nominal terms, rather a crash in real terms that the majority will not see

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14 minutes ago, TheCountOfNowhere said:

Print billions...lower interest rates get inflation...or state sponsored theft in this case.

 

 

 

I think globally they have printed £14 trillion and we have inflation of sub 3% you'd expect us to be using wheel barrows of cash to buy a loaf of bread.

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They wont be fighting inflation soon they will be fighting a massive debt deflation and probably prices running at -2%.The inflation in the UK is pretty much all because of the pound falling against the dollar and will run through.It is simply helping to crush margins even more because all those extra costs are going direct out of the country hence the trade balance getting worse.We will get very high inflation in a few years,probably well into double figures,maybe even over 15% by 2025 and rates wont be far behind.However before we move into the start of this inflation we have a quick snap end to this dis-inflation cycle to get through.Expect massive intervention into the real economy from government to be the signal its starting.Its ironic that massive government spending is one of the causes of our troubles,yet we are about to get a lot lot more,but this time not into consumption (welfare),but industry investment.

The BOE only has a small role to play,everyone needs to be watching the Fed and inflation in the US,its falling very very close to outright deflation now.

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58 minutes ago, houseface2000 said:

We need inflation, the establishment want inflation. It's either that or completely reform the monetary system which enriches them!

Inflation is a drag consequence of all the money creation......it is not good for economies it is not good for people in general.....good for killing debt so as to create more.....;)

http://www.europac.com/commentaries/governments_need_inflation_economies_dont

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2 hours ago, durhamborn said:

They wont be fighting inflation soon they will be fighting a massive debt deflation and probably prices running at -2%.The inflation in the UK is pretty much all because of the pound falling against the dollar and will run through.It is simply helping to crush margins even more because all those extra costs are going direct out of the country hence the trade balance getting worse.We will get very high inflation in a few years,probably well into double figures,maybe even over 15% by 2025 and rates wont be far behind.However before we move into the start of this inflation we have a quick snap end to this dis-inflation cycle to get through.Expect massive intervention into the real economy from government to be the signal its starting.Its ironic that massive government spending is one of the causes of our troubles,yet we are about to get a lot lot more,but this time not into consumption (welfare),but industry investment.

The BOE only has a small role to play,everyone needs to be watching the Fed and inflation in the US,its falling very very close to outright deflation now.

2 hours ago, winkie said:

Inflation is a drag consequence of all the money creation......it is not good for economies it is not good for people in general.....good for killing debt so as to create more.....;)

http://www.europac.com/commentaries/governments_need_inflation_economies_dont

Every time people talk about inflation they refer to the 70's. Inflation picked up due to a government that targeted employment, a closed economy and strong unions. The wage prices spiral can't happen now, company's just move to where labor is cheaper or use tech to get rid of there job altogether

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2 hours ago, durhamborn said:

They wont be fighting inflation soon they will be fighting a massive debt deflation and probably prices running at -2%.The inflation in the UK is pretty much all because of the pound falling against the dollar and will run through.It is simply helping to crush margins even more because all those extra costs are going direct out of the country hence the trade balance getting worse.We will get very high inflation in a few years,probably well into double figures,maybe even over 15% by 2025 and rates wont be far behind.However before we move into the start of this inflation we have a quick snap end to this dis-inflation cycle to get through.Expect massive intervention into the real economy from government to be the signal its starting.Its ironic that massive government spending is one of the causes of our troubles,yet we are about to get a lot lot more,but this time not into consumption (welfare),but industry investment.

The BOE only has a small role to play,everyone needs to be watching the Fed and inflation in the US,its falling very very close to outright deflation now.

So with this in mind do you think we will see a significant drop in prices across the board, food, fuel, house prices, stocks etc ? then a ramping up where cash is toilet paper ?

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3 hours ago, durhamborn said:

They wont be fighting inflation soon they will be fighting a massive debt deflation and probably prices running at -2%.The inflation in the UK is pretty much all because of the pound falling against the dollar and will run through.It is simply helping to crush margins even more because all those extra costs are going direct out of the country hence the trade balance getting worse.We will get very high inflation in a few years,probably well into double figures,maybe even over 15% by 2025 and rates wont be far behind.However before we move into the start of this inflation we have a quick snap end to this dis-inflation cycle to get through.Expect massive intervention into the real economy from government to be the signal its starting.Its ironic that massive government spending is one of the causes of our troubles,yet we are about to get a lot lot more,but this time not into consumption (welfare),but industry investment.

The BOE only has a small role to play,everyone needs to be watching the Fed and inflation in the US,its falling very very close to outright deflation now.

Why would the BOE raise rates to that extent when their policies since 2008 seem to be ZIRP or (eventually) NIRP? Also, wouldn't they just sacrifice peoples living standards completely to save their wealth the housing market and wouldn't interest rates that high mean that the UK debt is completely unserviceable? Why would they suddenly drastically reverse policy when so far it hasn't seem to have caused them any adverse problems except Mark Carney looking a bit silly?

Edited by fru-gal

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1 hour ago, houseface2000 said:

Every time people talk about inflation they refer to the 70's. Inflation picked up due to a government that targeted employment, a closed economy and strong unions. The wage prices spiral can't happen now, company's just move to where labor is cheaper or use tech to get rid of there job altogether

Of course.....that is why high immigration helped to fend off low growth and stagflation.....until the people it did affect or thought it did affect them directly said enough is enough....the rest is history.;)

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5 minutes ago, fru-gal said:

Why would the BOE raise rates to that extent when their policies since 2008 seem to be ZIRP or (eventually) NIRP? Also, wouldn't they just sacrifice peoples living standards completely to save their wealth the housing market

I think that is right...ensuring the rich stay rich or get richer is their first priority...this will continue for as long as they can get away with it and folks are so docile that I don't think anything is going to change soon unless the system starts to crack...

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1 minute ago, Wayward said:

I think that is right...ensuring the rich stay rich or get richer is their first priority...this will continue for as long as they can get away with it and folks are so docile that I don't think anything is going to change soon unless the system starts to crack...

I imagine riots and marshall law keeping the plebs in place are more likely than seeing interest rates at +15% in 8 years time.

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7 minutes ago, fru-gal said:

I imagine riots and marshall law keeping the plebs in place are more likely than seeing interest rates at +15% in 8 years time.

The size of many debts and low income growth ensures rates won't go up. Until the debts are purged slow stagnation is the aim.

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15 minutes ago, Wayward said:

I think that is right...ensuring the rich stay rich or get richer is their first priority...this will continue for as long as they can get away with it and folks are so docile that I don't think anything is going to change soon unless the system starts to crack...

Folks are so docile that the Tories went from expecting a 3 figure majority to becoming a minority government in a matter of a few weeks during the 2017 general election campaign. There are currently barely enough comfortable older people to outweigh the angry younger demographic but the older people are dying off and a couple of thousand new young people gain the right to vote every day.

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If rates don't go up then the pound will slide down. Not that they care twin sheets about that, but they cannot stop buying oil and that has to be paid for in someone else's currency. In the unlikely case they decide fine we won't buy any oil then industrial output would plunge and people would freeze to death, so maybe I can see your riots just possibly. 

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5 minutes ago, Funn3r said:

If rates don't go up then the pound will slide down. Not that they care twin sheets about that, but they cannot stop buying oil and that has to be paid for in someone else's currency. In the unlikely case they decide fine we won't buy any oil then industrial output would plunge and people would freeze to death, so maybe I can see your riots just possibly. 

will the plebs understand what they are rioting for ?? or will just join the band wagon :lol:

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7 minutes ago, Funn3r said:

If rates don't go up then the pound will slide down. Not that they care twin sheets about that, but they cannot stop buying oil and that has to be paid for in someone else's currency. In the unlikely case they decide fine we won't buy any oil then industrial output would plunge and people would freeze to death, so maybe I can see your riots just possibly. 

What's a few hundred thousands poor frozen plebs between the political elite... Some people just need to learn to sacrifice themselves for the good of the 1% country.

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5 minutes ago, Funn3r said:

If rates don't go up then the pound will slide down. Not that they care twin sheets about that, but they cannot stop buying oil and that has to be paid for in someone else's currency. In the unlikely case they decide fine we won't buy any oil then industrial output would plunge and people would freeze to death, so maybe I can see your riots just possibly. 

Bingo! The price of oil in dollars therefore acts as a thermo-economic upper bound on inflation, unless your economy is self-sufficient in energy production. Hence the idea that we can smoothly inflate away our debts in a business-as-usual manner is hopelessly misguided.

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5 hours ago, adarmo said:

Interesting line. 

The BoE knows 5% interest rates are the medicine that will kill the patient. 

My view is that the most politically acceptable method of sorting out insane property prices is to inflate everything you to meet them. Far more palatable than a crash in nominal terms, rather a crash in real terms that the majority will not see

How do they inflate wages to meet insane house prices in a global economy? Unprecedented protectionism?

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1 hour ago, fru-gal said:

I imagine riots and marshall law keeping the plebs in place are more likely than seeing interest rates at +15% in 8 years time.

You have X factor & Netflix box sets  problems solved

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1 hour ago, Maynardgravy said:

How do they inflate wages to meet insane house prices in a global economy? Unprecedented protectionism?

They just keep interest rates on the floor and start to increase wages in the public sector whilst slowly clamping down on lending for housing, restricting foreign ownership and BTL and building more so that in real terms prices come down and wages stay flat, but in nominal terms wages increase and prices stay flat. 

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  • 294 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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