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dnd

Interest Rates Won't Rise But Prices Will

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House prices CAN continue upwards if the BOE refuses to raise IR

Real inflation will continue to rise and official figures will be continously revised - BOE preffered option to IR rises

Wage inflation will stay surpressed through higher unemployment and immigration

Cheap borrowing due to low interest rates will fill in the gap between wage and price inflation - it'll be cheaper to get into debt with low interest loans/mortgages and buy property/goods/services straight away rather than let high inflation eat away at your cash

Inflation - a way out? - yep, it is a possibility - all the 'flags' for hyperinflation seem to be in place...

http://en.wikipedia.org/wiki/Virtuous_circ..._macroeconomics

http://en.wikipedia.org/wiki/Hyperinflation

Are we are looking at living in a high inflation, low wage, debt laden environment?

Could this happen in the UK?

Edited by dnd

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House prices CAN continue upwards if the BOE refuses to raise IR

Real inflation will continue to rise and official figures will be continously revised - BOE preffered option to IR rises

Wage inflation will stay surpressed through higher unemployment and immigration

Cheap borrowing due to low interest rates will fill in the gap between wage and price inflation - it'll be cheaper to get into debt with low interest loans/mortgages and buy property/goods/services straight away rather than let high inflation eat away at your cash

Inflation - a way out? - yep, it is a possibility - all the 'flags' for hyperinflation seem to be in place...

http://en.wikipedia.org/wiki/Virtuous_circ..._macroeconomics

http://en.wikipedia.org/wiki/Hyperinflation

Are we are looking at living in a high inflation, low wage, debt laden environment?

Could this happen in the UK?

I think the bank might raise rates before this happens?

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Guest donall

We are in a very interesting situation at the minute.

The printing of money after the Dotcom bust and 9/11 by the Fed. reserve and other central banks has increased money supply. That prevented a recession and enables our houses to be worth so much.

HPI give the impression of inflation - since if by anyone's estimation houses are over-valued.

However - Retail Price Inflation has been low and has fallen over the last quarter of a century.

Perhaps the collapse of the Ponzi fiat currency scheme that we are running with now is more of a concern than the HPC.

But, you'll have to do your own research into that.

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This daily reckoning article thinks stagflation, then deflation, then hyperinflation! (in the US, anyway... Will the same happen here - we seem to be in the stagflation stage already? Or are we in the stagflation/deflation transition? - consumers are being forced to cut back)

Thus have producers caught on to the science of modern central banking, which is nothing more than surreptitiously inflating the currency. Now that people know, the magic no longer works. Instead of increasing production in response to greater demand (more dollars), businessmen merely increase prices. Stagflation, it is called. We won't dwell on it here, but yesterday, we gave an interview to a documentary filmmaker who asked us what we thought of it. "What do you most fear - inflation, deflation or stagflation," he asked.

"We fear none of them," we replied. "What's more, we expect them all. The Fed is 'flating up the money supply which means we will have stagflation, with rising prices and little or no real economic growth. Soon, expect general deflation, as consumers are forced to cut back. Then, the Fed will panic. They don't call the Fed chairman 'Helicopter Ben' for nothing. He has already told us what he will do if deflation menaces the economy: he will drop dollars from helicopters. This will cause hyperinflation and the destruction of the dollar."

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Guest mattsta1964

This daily reckoning article thinks stagflation, then deflation, then hyperinflation! (in the US, anyway... Will the same happen here - we seem to be in the stagflation stage already? Or are we in the stagflation/deflation transition? - consumers are being forced to cut back)

Deflation, Hyperinflation...............

It doesn't matter which way it goes, we are facing a 30's style recession the like of which has never been witnessed.

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No they can't, if salaries don't rise as well. They have to stop at some point if people are not earning infinite amounts of money.

Like I said at the start...

"Cheap borrowing due to low interest rates will fill in the gap between wage and price inflation - it'll be cheaper to get into debt with low interest loans/mortgages and buy property/goods/services straight away rather than let high inflation eat away at your cash"

Also people are taking second jobs and some are working in retirement...

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This daily reckoning article thinks stagflation, then deflation, then hyperinflation! (in the US, anyway... Will the same happen here - we seem to be in the stagflation stage already? Or are we in the stagflation/deflation transition? - consumers are being forced to cut back)

Consumer won't cut back like the BOE thinks they will - people have got a taste of the highlife thanks to MEW - they will find it hard to drop all that

If the BOE refuses to cut IR - then people will continue to borrow - real inflation will rise and the BOE will be force to redefine 'inflation' again (watch gold shoot up when this happens)

Edited by dnd

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Deflation, Hyperinflation...............

It doesn't matter which way it goes, we are facing a 30's style recession the like of which has never been witnessed.

Too true.

Compare the past 10 years' consumption to the consumption in the 80s - which has been more excessive? Though I wasn't old enough to remember the era of JR and big shoulders, I'm guessing that this decade of debt eclipses anything since the roaring 20s.

So whether it's deflation or hyper-inflation, the party's over. My guess is inflation then asset deflation.

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  • 302 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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