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gruffydd

Great Article On Inflation

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http://news.independent.co.uk/business/com...icle1219747.ece

ext. - "A new element in policy thinking, highlighted in those minutes, is the growth in broad money supply and lending. There has been especially rapid expansion in recent months in the liquidity of financial institutions. In the year to June, this sector's M4 deposits rose by 31.5 per cent while its borrowing from M4 lenders increased by 29.6 per cent. This expansion in liquidity contributed significantly to the reported 13.7 per cent surge in overall M4 money supply over the period.

The MPC's August minutes noted that the financial institutions' behaviour could "put upward pressure on asset prices, increasing household wealth and potentially pushing up nominal spending". It is a long time since the Bank worried about the money supply, but the numbers are so extreme now that they can no longer be ignored.

Central bankers from Seoul to Frankfurt are worrying about excess liquidity. The Bank of England seems to be joining them in their concern. The problem for the MPC is to change its policy framework to incorporate monetary influences without forfeiting the clarity of the message it sends about its policy actions. The consternation that greeted this month's rate increase shows the MPC has yet to find the solution."

Stephen Lewis is the chief economist at Insinger de Beaufort

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Hence the recent increase of Government savings (NS&I) ads in the media spouting how they will beat inflation (yeah, right!!!)

Savings soak up excess liquidity in the market

If Alan Sugar can't convince the public to save volunterily then forced pensions will mop up the rest...

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

Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

- Outright lying as to official statistics such as money supply, inflation or reserves. (through the CPI)

- Suppression of publication of money supply statistics, or inflation indices.

- Price and wage controls. (wages though immigraton)

- Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or similar. (to be phased in under forced pensions)

- Adjusting the components of the Consumer Price Index, to remove those items whose prices are rising the fastest. (done)

GB/BOE are slowly running out of options....

Edited by dnd

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IIRC forced saving for pensions is coming soon - another method of hiding inflation...

GB/BOE are slowly running out of options....

Given that so many are already struggling with debt, enforced savings will push many housholds over the edge, unless the government classifies mortgage repayments as savings, or in effect those with a mortgage are exempt or at least suffer a reduced level of enforced saving.

Either way, with or without mortgage consideration, enforced savings would have dire implications for HPI/HPC.

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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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