Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

That Suggestion That Gordon May Move C P I Goalposts

Recommended Posts

http://www.thestreet.com/_tsclsii/markets/...s/10300381.html

The Street

What a Week: Landing Gear

By Liz Rappaport

Markets Columnist

7/28/2006 5:08 PM EDT

Happiness that the economy slowed more than expected seems oxymoronic, which is why Friday's rally is suspect.
That's not to mention the lingering possibility of another rate hike due to inflation data that continue to creep upward. The core price index for personal consumption expenditures, excluding food and energy price fluctuations, grew 2.9% year over year in the second quarter, up from a 2.1% increase in the first quarter.
The markets may be relatively unconcerned about the inflation levels after Bernanke's testimony last week indicated that the upper limit of the Fed's 1% to 2% inflation "comfort zone" is "soft," writes Ethan Harris, chief economist at Lehman Brothers.
Bernanke suggested in his testimony that the Fed is comfortable with a forecast of inflation growth between 2% and 2.5%
through this year and even beyond. The Fed's beige book this week emphasized the body's sanguine outlook on inflation, and the markets cheered the news.

What are the chances that Gordon will move our goalposts in alignment with the apparent new targets at the Fed? NuLabour are in a U-Turn frenzy at present so another one will probably go unnoticed--more or less.

It will let him off the hook IR-wise and allow more inflation to build and keep HPI-MEW growing for a few more months.

Share this post


Link to post
Share on other sites
Guest Bart of Darkness

That Suggestion That Gordon May Move C P I Goalposts, Fed making 2-2.5% the new target -will Gordon now follow?

Is the Pope Catholic?

Share this post


Link to post
Share on other sites

I think has been a possibility for some time now. You can see it in a statement, can't you?

"Because of the high oil prices and that we see this as temporary I have relaxed the BoE's target for inflation."

Share this post


Link to post
Share on other sites

I think has been a possibility for some time now. You can see it in a statement, can't you?

"...high oil prices and that we see this as temporary..."

:lol::lol:

<_<

Share this post


Link to post
Share on other sites

Coming from an era of 25% annual inflation, I find the idea of 2.5% equalling hyperinflation as being amusing!

The idea that the true figure of inflation is 2.5% is also amusing.

Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects.

Share this post


Link to post
Share on other sites

Coming from an era of 25% annual inflation, I find the idea of 2.5% equalling hyperinflation as being amusing!

If this is a view of the general population then GB has truely worked his PR magic....

Share this post


Link to post
Share on other sites

If this is a view of the general population then GB has truely worked his PR magic....

If you think you are living in hyper inflation then you are too young to have lived through it or understand the meaning of it.

If we were in hyperinflation (25% ish) with wages rising at 3-4%, you would not be in employment.

Share this post


Link to post
Share on other sites

If you think you are living in hyper inflation then you are too young to have lived through it or understand the meaning of it.

If we were in hyperinflation (25% ish) with wages rising at 3-4%, you would not be in employment.

Never said we were in a hyper-inflationary environment - yet....

As for the current, but growing, gap between prices and wages - borrowing is fueling inflation and borrowing keeping me in employment...

Share this post


Link to post
Share on other sites

While the Germans have experienced deflation for over a decade they have remained the most successful trading nation in the world. The Anglo Saxon economies which have lost much of their manufacturing capacity (the most productive part of any economy) only have monetary tools with which to fight recessionary deflation. The problem is that they have nothing much left to inflate ( housing bubbles apart). It would be better if governments were more open about the challenges facing us in the coming decades.

The fight against deflation

Share this post


Link to post
Share on other sites

While the Germans have experienced deflation for over a decade they have remained the most successful trading nation in the world. The Anglo Saxon economies which have lost much of their manufacturing capacity (the most productive part of any economy) only have monetary tools with which to fight recessionary deflation. The problem is that they have nothing much left to inflate ( housing bubbles apart). It would be better if governments were more open about the challenges facing us in the coming decades.

The fight against deflation

What is it about our leaders that makes them SOOOO STUPID!

In a world that can easily turn hostile, it makes sense to be self sufficient - to make everything you need yourself.

The loss of a million jobs in manufacturing and their replacement by a million jobs in the public services will be a millstone around our necks for the next 50 years.

When times get tight, if you have manufactured goods you can still export and get money flowing into the economy. Wonder if anyone else in the world needs the services of Nottingham council's official street namer?

Share this post


Link to post
Share on other sites

If you think you are living in hyper inflation then you are too young to have lived through it or understand the meaning of it.

If we were in hyperinflation (25% ish) with wages rising at 3-4%, you would not be in employment.

Err, core materials - energy, metals and some core services and housing have been or are rising at nearly 10x the official rate of inflation (with wages pegged to some degree to the rate of inflation).

Don;t you smell a whiff of hyperinflation already?

Share this post


Link to post
Share on other sites

What is it about our leaders that makes them SOOOO STUPID!

In a world that can easily turn hostile, it makes sense to be self sufficient - to make everything you need yourself.

The loss of a million jobs in manufacturing and their replacement by a million jobs in the public services will be a millstone around our necks for the next 50 years.

When times get tight, if you have manufactured goods you can still export and get money flowing into the economy.

Well then you have to convince our leaders that we are capable of manufacturing goods competitively.

We have the savvy to design them, but not the managerial/worker discipline to manufacture them at a decent profit.

You either need workers willing to work long, loyal hours in return for peanut wages or the organisation to produce a quality product that is better than anyone elses (like the Germans).

At the moment we don't stand a chance... (although there are some success stories in UK manufacturing)

Share this post


Link to post
Share on other sites

Err, core materials - energy, metals and some core services and housing have been or are rising at nearly 10x the official rate of inflation (with wages pegged to some degree to the rate of inflation).

Don;t you smell a whiff of hyperinflation already?

Err, no.

Not many people rubbish the make up of RPI and RPI is only at 3.3%. At best I might accept that inflation is about 4-5%, probably in line with the annual increase in average incomes.

If wages underperformed real inflation as much as you suggest, the economy would have been wrecked some time ago. People would simply not be able to spend. And before you say it's all on credit, the ratio of saving to borrowing started to increase last year

Share this post


Link to post
Share on other sites

...the ratio of saving to borrowing started to increase last year

From what to what?

Can we put as much faith in these figures as the inflation ones?

Edited by dnd

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.