"inflation Is Dead, It Has Ceased To Be, It Is No More"

[mikthe20]

In every bubble market there seems to be a point or statement where a so-called expert with a lot of qudos says why it is different this time. In the past we've seen some people make complete tools of themselves by making such predictions:

- "DOW 36,000 : The New Strategy for Profiting from the Coming Rise in the Stock Market" by Glassman and Hassett - published just before the stock market crash of 2000

- "The end of history" by Fukuyama who predicted that with the collapse of the Soviet Union western democracy had won and hence there'd be no more wars or other world problems from people battling against the west - how wrong was that?!

Well we seem to have an eminent UK economist who is now saying inflation is gone for ever:

Inflation is dead, it has ceased to be, it is no more

"‘Inflation is dead,’ Minford [professor at Cardiff Business School], told delegates at the annual Sifa conference. ‘Nobody wants it and the central banks have been put in charge of it.’"

When so-called experts make obviously ridiculous statements like that and get proper coverage in the press it's a signal to me that it's all about to go pear-shaped.

[Time to raise the rents.]

By this account Roger Bootles mid 90's book 'The Death of Inflation' should have been a turning point.

[AteMoose]

except in zbw where inflation is over 1000%....

[Bear Goggles]

By this account Roger Bootles mid 90's book 'The Death of Inflation' should have been a turning point.

I suppose you could argue it was a turning point. The mid 90s was when house price inflation suddenly took off and proceeded to price out a generation.

When Roger bootle brings out a book called "The rebirth of inflation" it'll be time to sell all your gold.

[mikthe20]

By this account Roger Bootles mid 90's book 'The Death of Inflation' should have been a turning point.

Fair comment - and I think Bear Goggles comments you could say the market did turn at that point. Perhaps inflation is a zombie and can be killed more than once. It seems to me though that it is prone to resurrection.

[Bear Goggles]

Fair comment - and I think Bear Goggles comments you could say the market did turn at that point. Perhaps inflation is a zombie and can be killed more than once. It seems to me though that it is prone to resurrection.

..Or maybe it's more like a game of 'Whack-a-mole'.

[apom]

By this account Roger Bootles mid 90's book 'The Death of Inflation' should have been a turning point.

but is it not dead...

Think of one thing that has gotten more expensive over the last few years..

Okay.. housing ahem.. (had you not noticed...)

but that is not a gain in value, or cost.. if enything building materials have gotten cheaper and as there is a larger supply then ever before.. can these be considered cheaper...?

what else is more expensive...?

http://business.guardian.co.uk/story/0,3604,843624,00.html

Third, Mr King is nervous that homeowners may not realise that although low interest rates make mortgage repayments affordable, high inflation will not erode the value of their borrowing, as it did in the 1970s - and when they do catch on, house prices will plunge.

perhaps in housing the death of inflation is just taking longer to get picked up on..?

I have a dvd player that cost me £30.

tv for £100..

what is not cheaper...?

(fuel.. and bills and tax... drat.. there were some things.)

[Realistbear]

Inflation is alive and well:

http://business.timesonline.co.uk/article/...2182480,00.html

According to official figures released today by National Statistics, the housing, water, electricity, gas and other fuels component of consumer price inflation posted its largest annual rate of growth since records began in 1997.

That is the largest annual rate since 1997! Gordon's inflation measures are political media fodder.

[LTD]

(fuel.. and bills and tax... drat.. there were some things.)

Beer's gone up by 20p a pint where I live (except places like Cheapyspoons). I reckon that qualifies as more than 2%.

[Bingley Bloke]

"‘Inflation is dead,’ Minford [professor at Cardiff Business School], told delegates at the annual Sifa conference.

Clearly Minford has never had the joy of receiving gas, electricity, water and council tax bills

[spuggy]

I remember reading an interesting article on inflation that was posted here a few weeks ago regarding inflation, noting how inflation had to be split into 2 categories - product inflation had dropped due to massive imports from China to everywhere else, and was being manipulated to be kept artificially low by the Chinese, :angry: but inflation on services was increasing rapidly, as a worldwide phenomenon.

So if you can buy it in a box with Chinese writing on it it's getting cheaper, but if you have to pay someone over here to do something with it, it's gonna cost you.

[Flick]

‘Nobody wants it and the central banks have been put in charge of it.’"

lmao !

Surely a more accurate statement would be "government inflation measurements is fudged to such a degree, that the majority of wage earners now have no idea exactly why they are worse off than 2 years ago"

[bluenun]

Inflation is alive and well:

http://business.timesonline.co.uk/article/...2182480,00.html

According to official figures released today by National Statistics, the housing, water, electricity, gas and other fuels component of consumer price inflation posted its largest annual rate of growth since records began in 1997.

That is the largest annual rate since 1997! Gordon's inflation measures are political media fodder.

But what's the effect of having rampant inflation but no acknowledgement of it? As a saver, or indeed an investor, what can I do to peg my money against something safe?

This is a PATHETIC period in economic history to try and be sensible with money when everyone else is in complete and utter denial.

Inflation isn't dead! So what do we do, just sit here, suffer its effects, watch mounting debt, exponentially increasing bankruptcies and grow gradually poorer year by year?

[OnlyMe]

Got chatting to an electrical wholesaler today.

Price of cable from this distributor is going up 12% tomorrow.

It is going up another 12% on Friday.

It is going up another 12% on Monday.

Lucky there is no inflation eh?

Edited May 16, 2006 by OnlyMe

[Van]

Y'all better hope inflation isn't dead, otherwise all those lovely FTBs will be stuck in their 1br hovels for the next 40 years.

[Rave]

Y'all better hope inflation isn't dead, otherwise all those lovely FTBs will be stuck in their 1br hovels for the next 40 years.

Yeah, like my brother, £140k 25 yr I/O on a £159K one bed craphole. Thank **** both my parents are wealthy and will eventually leave him enought to bail him out.

[vinny]

To be honest the article is at best slipshod.

Some points regarding the article itself?

+Central banks are IMO in control of little most of the time - the market is normally in charge.

+Prices (of anything) are not measures of inflation.

+ It is stated that inflation is "dead" yet it has a 1 - 2% inflation forcast - WTF?

I Know many here fear hyperinflation, and the majority here I suspect do not trust official inflation figures.

I have much sympathy for both these views, especially for those in the "cynical" camp.

But should we consider this line? :

Instead Minford believes that across the developed world the cycle of the 1970s, when rising inflation was inevitably followed by recession-inducing punitive monetary policies, is over.

I certainly do not think that recessionary monetary policies are quite done. But is there something in what is being said? I believe that MOST of the inflation of prices of goods, and in particular asset prices have been do, in the main, to an expanding credit supply - rather than the printing of notes. If we have in effect zero interest rates and prices of goods only moving by 2% (or 4% if you would like an unofficial take on things) then what is actually happening?

More to ther point what will happen when credit tightens as people become fearful?

COULD we be looking at a deflationary scenario playing out?