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Balloon Goes Up Over Inflation

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This article goes on to say how Bernanke is a follower of the story of the great depression. The uncomfortable truth which cannot be mentioned by these people is that the cause was the bankers themselves with their own bubble inducing money printing policies, not the action that was required to prevent an even bigger bust at a later stage.

http://www.telegraph.co.uk/money/main.jhtm.../ixcitytop.html

Balloon goes up over inflation

(Filed: 20/05/2006)

As world markets reel from the impact of shock price rises, fears are growing that the monetary screws will have to be turned tighter, writes Ambrose Evans-Pritchard

Like blocked ketchup bursting out of a bottle, pent-up inflation is suddenly splattering across the global economy and setting off the worst investor fright in four years.

The scare hit sleepy Germany yesterday where producer prices vaulted 6.1pc in the year to end April, the worst in almost a quarter of a century.

The statistics office cited rises of 37pc in non-ferrous metals, 26pc in natural gas, 7.2pc in tobacco and 6.4pc in meat, a breadth of range suggesting systemic pressures.

Axel Weber, the Bundesbank chief, said the European Central Bank could no longer acquiesce in fast-mounting inflation if it wished to retain its credibility.

"A stability-oriented monetary policy can't afford to treat oil price shocks with benign neglect," he said.

Edited by OnlyMe

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Things go in cycles. For the past two years, the government and some commentators have been saying that we are in a new landscape where interest rate cycles are a thing of the past. What a load of tosh.

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Shares in the Indian Stock Exchange are tanking, ever downward, what effect would this have on the Global Economy and what muppet staked his life on India and China developing to a state whereby the world would depend on their success.

Looking at the situation,the world now appears wholly dependent on both India and China continuing to produce cheap goods and services, in order to keep Global Inflation down. If and when that situation ceases the rest of the world are completely screwed, transfer of skills cannot be recovered, it was a one way trip and if it fails there is no going back.

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Nice artical OnlyMe. I particularly liked this succinct bit in the last two paras:

But even if Mr Bernanke wishes to pause on rates, he may be forced to act against his better judgment.

The markets are demanding action on inflation. If he fails to deliver, the bond vigilantes will do the dirty work for him by driving up long-term rates.

A simple highlight of how limited are the CB's powers

Looking at the situation,the world now appears wholly dependent on both India and China continuing to produce cheap goods and services, in order to keep Global Inflation down.

Yup! And the party is coming to an end.

The Chinese Yuan is steadily, month on month apreciating against the world currencies, driving up the cost of those once cheap imports.

http://www.x-rates.com/d/CNY/USD/hist2006.html

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http://www.dailyreckoning.co.uk/article/190520061.html

Adrian Ash, the Daily Reckoning:

Inflation's a b*****d disowned by its parents. And like any good kid from a bad home, it risks going off- the-rails without warning. Ask government wonks or central bank pooh-bahs if they sired the poor child, and they simply look at their shoes and mutter about a "moment of madness". When nobody's watching, of course, they're still hard at it with the printers, trying to pump more money into all assets, all sectors. But now it's investors that are getting screwed.

:lol::lol::lol:

Edited by nimmmm

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Fantastic article

The brown stuff is going to hit the fan very shortly.

But get this:

Credit folly is ubiquitous, from a $1,000bn building spree in the Persian Gulf to debt-driven spending in the US reaching 107pc of GDP to bond spreads in Indonesia and Brazil compressed to risk-free levels.

Talk of a housing bubble and bust in the States, which we know is now well under way.

Yet nothing mentioned about the UK housing bubble.

It's almost as if prices over here are quite reasonable, and it's the American's who have the problem.

Why this mass denial?

Edited by BandWagon

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The statistics office cited rises of 37pc in non-ferrous metals, 26pc in natural gas, 7.2pc in tobacco and 6.4pc in meat, a breadth of range suggesting systemic pressures.

All soon to be dropped from the relevant consumer price indices no doubt. Watch out for those articles about the UK turning into a nation of non-smoking vegans.

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And the Germans took action that will dampen irrational spending and a possible HPI:

http://story.irishsun.com/p.x/ct/9/id/a259...8a80d6f705f8cc/

Germany plans biggest tax hike in 60 years

Irish Sun

Saturday 20th May, 2006

Germany's lower house of Parliament voted Friday to raise the value-added tax to 19 percent, the biggest such tax hike in 60 years.

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I particularly liked this paragraph.

Markets across the world are facing up to the ugly possibility that this four-year boom may end as most booms end - and soon - caused by an abrupt step-change in prices that forces central banks to jam on the breaks. Anybody not wearing a seatbelt may go straight through the windscreen.

Nice crash analogy. Fasten your seatbelts!

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Guest Bart of Darkness

I particularly liked this paragraph.

Nice crash analogy. Fasten your seatbelts!

Preferably a golden one.

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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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