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

Will It Be Inflation Or Deflation?

Recommended Posts

I'm going with deflation but that's only because I have savings!

I can't argue any points for or against because I'm clueless on the subject but I really would like to hear them.

I have picked up some views from both sides in other threads but would like a jolly good debate from our resident experts!

Edited by OurDayWillCome

Share this post


Link to post
Share on other sites

Can you clarify on the poll what you mean by low inflation and high inflation?

I have gone for low inflation 8-10% mark.....

Although I think the economy will try to deflate. Hence GB will try and extricate by reflating insofar as he is able, if that makes sense.

Share this post


Link to post
Share on other sites

I'm going with deflation because I think even the government and BoE will recognise the peril of a vicious cycle of hyperinflation:

Rising inflation causes

Falling pound on foreign exchanges causes

More expensive imports causes

Rising inflation causes...

Share this post


Link to post
Share on other sites
Can you clarify on the poll what you mean by low inflation and high inflation?

I have gone for low inflation 8-10% mark.....

Although I think the economy will try to deflate. Hence GB will try and extricate by reflating insofar as he is able, if that makes sense.

Have updated the poll – are these sensible ranges?

Share this post


Link to post
Share on other sites

I think they will try and get away with as much inflation as they can, hiding it as much as they can. Its what they have been doing for the past few years and I think they will continue to try and get away with it.

Share this post


Link to post
Share on other sites
Can you clarify on the poll what you mean by low inflation and high inflation?

I have gone for low inflation 8-10% mark.....

Although I think the economy will try to deflate. Hence GB will try and extricate by reflating insofar as he is able, if that makes sense.

Agreed, a few years of that and debt will be decimated.

Share this post


Link to post
Share on other sites
Agreed, a few years of that and debt will be decimated.

me too. unfortunately. I would prefer deflation and relying on my career path for pay increases rather than meagre contractual rises.

Share this post


Link to post
Share on other sites
Agreed, a few years of that and debt will be decimated.

Do you think that wage inflation would be running at the same levels?

If it didn't then our savings would still have clout as people would not have the ability to borrow more and thus pay more for houses. Especially when they are struggling to pay for everyday items such as food.

Edited by OurDayWillCome

Share this post


Link to post
Share on other sites
I think they will try and get away with as much inflation as they can, hiding it as much as they can. Its what they have been doing for the past few years and I think they will continue to try and get away with it.

Agreed.

They'll fiddle the numbers so that the BoE's remit is only to make sure Ipods don't increase by more than 2% a year on average, claim that everything's just fricking peachy regardless of any evidence and let our debt mountain slowly shrink in real terms.

Share this post


Link to post
Share on other sites

Debt creates money supply, Bankruptcy destroys money supply Paying back debt destroys money supply.

This will create a shortage of money supply and thus money will become more valuable. i.e. deflation.

It's a myth that inflation is good.

Share this post


Link to post
Share on other sites

The money supply in the UK has been increasing by 10 to 15% pa for quite some time now. At some stage this will be seen in the official price increase figures. Remember price increases follow inflation so we have/are having much higher inflation than officially recognised. House price inflation has been ignored for years now and if this does'nt show inflation then what does?

China has had high inflation for quite some time with inflationary pressures building each day so wages, goods and services are in double digit but they have been managing to keep export increases to 0.9% over the last year which has been a massive increase as it had been negative up to that point!

The effect of currency imbalances especially over the last few years has helped lower inflation quite dramatically as was the availability of lower credit costs as it alliviated the need for higher wages to stimulate economic activity.

All of these factors are turning direction; Inflation from housing will move to other measured areas, China is starting to increase prices and this trend will accelerate, Currency strengths will rebalance whilst the economy will need earned money to stimulate activity (wage increases)

20% plus inflation should not be ruled out.

Share this post


Link to post
Share on other sites
Do you think that wage inflation would be running at the same levels?

If it didn't then our savings would still have clout as people would not have the ability to borrow more and thus pay more for houses. Especially when they are struggling to pay for everyday items such as food.

I'd like to see some sort of figures for house buyers wage inflation. Or, if you could somehow show the wage inflation of people in debt compared to the amount of their debts.

I think the whole picture for wage inflation is kept low by immigration of large numbers of people working on minimum wage or thereabouts. Those people dont buy houses and shouldn't have any debts of note though.

Share this post


Link to post
Share on other sites
I'd like to see some sort of figures for house buyers wage inflation. Or, if you could somehow show the wage inflation of people in debt compared to the amount of their debts.

Me too! I just don't see inflation helping people with debt as it will take some hefty inflation before people woke up and wages caught up. I'm (hoping) that if it goes down the high inflation route my savings will still have some real clout when making a home purchase – one thing is for sure is that sales volumes would plummit.

I'm still opting for deflation.

Share this post


Link to post
Share on other sites

The future's inflationary (and 8-10% sustained annual inflation is serious, not mild).

-Oil and gas are getting scarcer and more expensive to extract

-Food acreage is being used to grow energy crops

-China's billions are expecting (and getting) wage increases, the one child policy has produced "Little Emperor Syndrome"

-The money supply surge will feed further down the asset scale

-The productivity benefits that flowed from information technology are drying up

Share this post


Link to post
Share on other sites
Guest Shedfish

i reckon deflation. this subprime mess is just a bit big for central banks to fight.

at the first sign of real hyperinflation i will be buying a castle, and a Skycar to fly from it's ramparts

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.

  • 354 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • 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.