Chief snake oil salesman speaks out on inflation...

[Pindar]

 

I generally agree with this, the one exception is bounce back loans, they have been poring money into god knows what - mostly property I suspect which explains this years rise.

On the other hand lots of people have been made redundant, salary reduction and furlough so this would be deflationary, no?

Maybe an upcoming supply shock will do it (Covid container crisis and China power shutdown from lack of Australian coal).

It's a precarious situation and I have considered deflation as a possibility . Could be turning Japanese?

[24gray24]

 

No one gets Haldane. He has a tenuous connection to reality but clearly has connections and office skills.

Is that a way of saying nepotism? 

I woke up and thought of the answer: he doesn't mean inflation in wages or anything like that... he means large inflation in the cost of living coming down the pipe. 

Food,water, electricity, housing: the essential monopolies have all decided to double their prices in a smoke filled room; And he's promising to put up interest rates as an extra reward if they do? 

[jiltedjen]

Deflation won’t happen, it’s always going to inflation, any sign of any slight deflation and they will open the money gaps again for the millionth time 

deflation is just a dim distant hope for those left with increasingly worthless cash piles hoping to buy assets cheap, it’s just wishful thinking 

cash is only ever good during incredibly short term shocks, and you have to be the person stood there right on time.

but that normally means only the very wealthy who already have huge assets can afford to lose value on a cash pile as that cash pile is only a tiny % of their wealth.

it’s a fools game for the average individual normal average joe to keep large cash piles, trying to scoop assets up cheap in distress 

by the time the distress comes, the assets have more than inflated away from their cash pile which has lost most of its purchasing power 

that’s why the rich get richer over and over again 

the average joe needs to have assets to shelter from the constant inflation 

 

[Biggus]

 

When you've got 50 million Americans beginning to starve, and only a cheque for a thousand bucks to cover them for a year's lost wages, what happens then is inflation? 

Inflation? 

Cascade of unpaid debts,evictions,  foreclosures, bankruptcies. .. 

He must have been talking to a different demographic. Not main St. 

Who suffers inflation then? The super rich luxury goods sector?

I don't get it.

It only takes a few rich people to bid up the price of wheat, oil, lean hogs or whatever. Ordinary people don't have to make more money. Their living costs just increase. Similar to what's been happened with housing.

[Si1]

From notayesmaneconomicsblog:

 

" our “loose cannon on the decks” has spoken and it seems he is as detached from reality as ever. For example the issues with inflation are two-fold. The first is that the Bank of England has given the economy quite a monetary push with the annual rate of broad money ( M4) growth at 13.1%. So there is an element of a “laser focus” on something it has created"

[Si1]

 

Is that a way of saying nepotism? 

I guess so, but that's also common or garden office politics.

 

I woke up and thought of the answer: he doesn't mean inflation in wages or anything like that... he means large inflation in the cost of living coming down the pipe. 

Food,water, electricity, housing: the essential monopolies have all decided to double their prices in a smoke filled room; And he's promising to put up interest rates as an extra reward if they do? 

A much touted opinion is that inflation is sentiment based. So if people lose faith in the central bank's commitment to control it then it happens. So I think Haldane is clunkilly making threatening noises to raise IR without any intention of going through with it.

[24gray24]

 

I guess so, but that's also common or garden office politics.

A much touted opinion is that inflation is sentiment based. So if people lose faith in the central bank's commitment to control it then it happens. So I think Haldane is clunkilly making threatening noises to raise IR without any intention of going through with it.

Alternatively, he's got wind of cartels intending to Jack up prices on essentialsale,  and is warning them to keep it to the normal level of,say, 5% pay when the regulator doesn't take action. 

[NobodyInParticular]

 

People should be very worried about this.  it's the last roll of the dice.

They're basically going to ignore the inflation that they themselves are trying to cause and keep IRs at 0 ( -ve ) so their own asset prices dont fall and the government can keep serving the magicked up debt that they themselves have generated.

holy ****, this man should be arrested just for admitting this.

Evidence? Deflation is the current biggest concern, not inflation, in terms of what is currently happening. In 5 years, it might be different as debt will still be large.

Edited December 27, 2020 by NobodyInParticular

[NobodyInParticular]

 

Britain is now extremely vulnerable to a rise in inflation as national debt rises over 100 per cent of GDP to its highest level since the early 1960s.

Vulnerable to. It doesn't mean there is going to be one.

 

If the Bank increases interest rates to keep inflation down the cost of servicing that debt will rocket, threatening the UK's recovery. 

Indeed, this is a concern. 

If interest rates go up and the recovery falters then the cost of debt for everyone (relative to earnings) will also increase, except for a few who are independently wealthy.

 

Haldane said the Bank would be prepared to allow inflation to overshoot its 2 per cent target temporarily,especially if it was as a result of temporary effects such as changes to VAT, oil prices or the exchange rate.

This makes sense as long as it's temporary and not by a huge amount. E.g. 3% wouldn't be ideal since the government has announced public sector workers are at fault for COVID-19, but it's not hyperinflation.

 

[winkie]

 

Evidence? Deflation is the current biggest concern, not inflation, in terms of what is currently happening. In 5 years, it might be different as debt will still be large.

Agree.....there will still be deflation as well as inflation running together......inflation of needs not wants......if earnings/income fall and debt is hard to come by, cheap for those that don't need it but prefer to use it, and expensive for those that need it but can't get hold of it........those that don't earn enough or borrow enough and the state does not give them enough, where will they get the money to spend on anything other than needs? 

[Pindar]

Ironically, those heavily "invested" in bitcoin and gold spout about it being inflation proof but have they considered that if there is real hyperinflation or economic disruption that their assets will buy proportionately less in the real world as real prices escalate. There's also the threat of cyber attacks, loss of Internet and inability to swap assets for useable currency. 

On the economy in general, isn't it true that anything of any value has already been effectively price fixed to maintain its real world value - in other words, the confluence of wage levels, interest rates and selective availability of credit all conspire to ensure that the average punter has no escape from lifelong serfdom? Whoever controls the credit taps has total control over house "values". 

What really matters is your time and the amount of it you can say is yours , not how big your house or car is or how exotic your next holiday

[jiltedjen]

 

Ironically, those heavily "invested" in bitcoin and gold spout about it being inflation proof but have they considered that if there is real hyperinflation or economic disruption that their assets will buy proportionately less in the real world as real prices escalate. There's also the threat of cyber attacks, loss of Internet and inability to swap assets for useable currency. 

On the economy in general, isn't it true that anything of any value has already been effectively price fixed to maintain its real world value - in other words, the confluence of wage levels, interest rates and selective availability of credit all conspire to ensure that the average punter has no escape from lifelong serfdom? Whoever controls the credit taps has total control over house "values". 

What really matters is your time and the amount of it you can say is yours , not how big your house or car is or how exotic your next holiday

Society and the economy is set up to keep everyone working until 68

It’s that way they can support the old in retirement and pay loads of taxes to keep the real wrong-uns off the streets with benefits etc 

and they can be kept off the streets, kept from rioting, kept in control basically. 

you also don’t want a population educated in economics, and the truth that most people day to day life is all that they are allowed and can ever have. 

it’s also why soo many morons love football it’s just bread and circuses. 

we live in a world with so much technology that only a small % of humans actually need to work, we could all have houses at the cost of construction etc, have huge leisure time etc. 

high house prices is just a mechanism of control over the populace. if it were not high house prices it would be something else, but houses are pretty perfect for control as shelter is a basic human need. 

the thing with economics is that once people understand it they no longer accept that all they can have in life is death at your desk at 68, that’s why relatively easy jobs in finance is worth so much. 

If you can sit and talk to your boss about the slides you have just done on the real rate of inflation instead of the reported rate of inflation, you are not going to sit there and accept a slightly above the reported rate of inflation pay rise, your just going to slide the printed off slides over the table showing the real rate and say ‘let’s be honest Pete, I will take the real rate of inflation plus 0.5% for my good work’ 

while the average mug inn factory has no idea that inflation is running at closer to 10% and they walk away happy with their effective -5% pay cut for the year, goes home and they have a beer over the rise, then get a huge shock at the big electric bill and shout at the kids as it must be their fault, and wonder why they can never win

meanwhile mr banker has found that Porsche have crashed in price vrs their wages and tootle by me factory workers house thinking ‘what a shithole’ 

 

[Pindar]

 

Society and the economy is set up to keep everyone working until 68

It’s that way they can support the old in retirement and pay loads of taxes to keep the real wrong-uns off the streets with benefits etc 

and they can be kept off the streets, kept from rioting, kept in control basically. 

you also don’t want a population educated in economics, and the truth that most people day to day life is all that they are allowed and can ever have. 

it’s also why soo many morons love football it’s just bread and circuses. 

we live in a world with so much technology that only a small % of humans actually need to work, we could all have houses at the cost of construction etc, have huge leisure time etc. 

high house prices is just a mechanism of control over the populace. if it were not high house prices it would be something else, but houses are pretty perfect for control as shelter is a basic human need. 

the thing with economics is that once people understand it they no longer accept that all they can have in life is death at your desk at 68, that’s why relatively easy jobs in finance is worth so much. 

If you can sit and talk to your boss about the slides you have just done on the real rate of inflation instead of the reported rate of inflation, you are not going to sit there and accept a slightly above the reported rate of inflation pay rise, your just going to slide the printed off slides over the table showing the real rate and say ‘let’s be honest Pete, I will take the real rate of inflation plus 0.5% for my good work’ 

while the average mug inn factory has no idea that inflation is running at closer to 10% and they walk away happy with their effective -5% pay cut for the year, goes home and they have a beer over the rise, then get a huge shock at the big electric bill and shout at the kids as it must be their fault, and wonder why they can never win

meanwhile mr banker has found that Porsche have crashed in price vrs their wages and tootle by me factory workers house thinking ‘what a shithole’ 

 

I agree. I also think bitcoin was created as a means of quelling meaningful rebellion among millennials and those who missed the property boat. It's offering a canny few the opportunity of "money for nothing" , similar to the boomers and their bricks and mortar mantra. The almost scripted and unconditional recommendations of "buy buy buy" for crypto has a familiar ring to it and smacks of social engineering where the heroes are Satoshi and Musk instead of Kirsty and Phil, together with the same insane ramping and blatant price manipulation by whales etc. Real investing and financial sense is unfortunately not taught in schools. To coin an Internet cliche, "generating multiple income streams online" is not a zero sum game and any worthwhile investment or business takes effort. 

[satsuma]

 

I agree. I also think bitcoin was created as a means of quelling meaningful rebellion among millennials and those who missed the property boat. It's offering a canny few the opportunity of "money for nothing" , similar to the boomers and their bricks and mortar mantra. The almost scripted and unconditional recommendations of "buy buy buy" for crypto has a familiar ring to it and smacks of social engineering where the heroes are Satoshi and Musk instead of Kirsty and Phil, together with the same insane ramping and blatant price manipulation by whales etc. Real investing and financial sense is unfortunately not taught in schools. To coin an Internet cliche, "generating multiple income streams online" is not a zero sum game and any worthwhile investment or business takes effort. 

While I don’t think bitcoin is intended to be a means of quelling rebellion in Millennials it plays a role in doing so.  I personally think it’s a Casio and see twenty somethings playing the bitcoin slots as day traders.  They are looking a charts but not asking the fundamental questions.  

[Pindar]

 

While I don’t think bitcoin is intended to be a means of quelling rebellion in Millennials it plays a role in doing so.  I personally think it’s a Casio and see twenty somethings playing the bitcoin slots as day traders.  They are looking a charts but not asking the fundamental questions.  

Yes, it's definitely a casino in the purest sense. At least the stock market, with its apparent detachment from reality, is based, in most cases, on real businesses which generate revenue etc. 

[jiltedjen]

 

I agree. I also think bitcoin was created as a means of quelling meaningful rebellion among millennials and those who missed the property boat. It's offering a canny few the opportunity of "money for nothing" , similar to the boomers and their bricks and mortar mantra. The almost scripted and unconditional recommendations of "buy buy buy" for crypto has a familiar ring to it and smacks of social engineering where the heroes are Satoshi and Musk instead of Kirsty and Phil, together with the same insane ramping and blatant price manipulation by whales etc. Real investing and financial sense is unfortunately not taught in schools. To coin an Internet cliche, "generating multiple income streams online" is not a zero sum game and any worthwhile investment or business takes effort. 

I have had the same thought! Very intelligent comment. 
 

it changes the most radical people with the strongest feelings about the unjust economic situation into millionaires. It buys them off. 
 

I have posted something similar before.