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Inflation To Go "hyper"


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The deflationists theory is we are not going to have hyperinflation because pay raises are low and getting lower because of eastern Euros willing to work for pennies a day. Of course this is just propaganda as inflation is live and well, and the final shoe is about to drop as we head into a hyperinflationary bust. Even the BBC is finally starting to admit wages are escalating: http://news.bbc.co.uk/1/hi/business/7234389.stm and the amount of council workers earning 50K + a year is soaring: http://www.expressandstar.com/2008/01/31/5...l-workers-soar/

You have been warned.

Edited by Pluto
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What a surprise. . . . . 2 of the merry band of gold rampers start a thread about inflation . .

Yawn. . .

Everything I can see looks the opposite. We have had the inflation the last 10 years with the exponential expansion of credit.

That is now all getting destroyed. How is that inflationary? How is credit tightening that we are all seeing inflationary?

It isn't

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What a surprise. . . . . 2 of the merry band of gold rampers start a thread about inflation . .

Yawn. . .

Everything I can see looks the opposite. We have had the inflation the last 10 years with the exponential expansion of credit.

That is now all getting destroyed. How is that inflationary? How is credit tightening that we are all seeing inflationary?

It isn't

On the contrary, you have had 10 years of deflation (because of china) and a property bubble (isolated inflation caused by monetary expansion).

Watch and learn as the price of food and energy goes through the roof and wages start to follow as credit is withdrawn to supplement poor wages. Those banking on a deflationary bust are going to poorer than they could ever imagine. Deflation is not an option.

Edited by Pluto
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Yep im with you there, mines also confirmed at 1.9 for next 3 yrs..........we have take off. :angry:

EDIT.....ps that was sacarstic on my payrise.

If you believe in deflation you should be happy with a 1.9% increase. Everything is getting cheaper so you should be happy - right?

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On the contrary, you have had 10 years of deflation (because of china) and a property bubble (isolated inflation caused by monetary expansion).

Watch and learn as the price of food and energy goes through the roof and wages start to follow. Those banking on a deflationary bust are going to poorer than they could ever imagine. Deflation is not an option.

I disagree.

What do you mean "inflation is not an option". Seems like you have too much faith in the wizard of oz. Its like saying "death is not an option" when someone is diagnosed with terminal cancer.

What about sentiment and attitudes. I can see them changing rapidly, particularly towards debt. The central banks cannot do anything for that.

Bernanke is a fool IMO. He will meddle and pull as many levers as possible and simply make matters worse and go on for longer.

You cannot hold back the tide.

Do you think the government is going to start paying money directly into peoples accounts to get them to spend??

Edited by BubbleTurbo
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The deflationists theory is we are not going to have hyperinflation because pay raises are low and getting lower because of eastern Euros willing to work for pennies a day. Of course this is just propaganda as inflation is live and well, and the final shoe is about to drop as we head into a hyperinflationary bust. Even the BBC is finally starting to admit wages are escalating: http://news.bbc.co.uk/1/hi/business/7234389.stm and the amount of council workers earning 50K + a year is soaring: http://www.expressandstar.com/2008/01/31/5...l-workers-soar/

You have been warned.

But how are we supposed to continually pay for these wage increases (public sector) ?? Darling is already 8 billion in the hole (and that is assuming the economy doesn't tank).

You say "inflation is live and well", yet (mass - nurses, teachers, police etc...) public sector pay rises are currently 2-3%, hardly "Hyper", in fact I would consider these to be deflationary if you compare them with the quoted RPI. And I notice that a lot of people here consider that to be a great underestimate of true inflation, so we are actually experiencing greater wage deflation!!

If RPI is 4%, do you consider 4% pay rises to be Hyper-Inflationary?

BTW, what would you consider to be a "Hyper-Inflationary" payrise ATM, just so when one comes along, I will know that you were right. Hopefully it will be me getting it!

Oh, what is all this "Warning" stuff all about then?, that you may get a deflationary pay rise, but think that you are better off!?!?

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I disagree.

What do you mean "inflation is not an option". Seems like you have too much faith in the wizard of oz. Its like saying "death is not an option" when someone is diagnosed with terminal cancer.

What about sentiment and attitudes. I can see them changing rapidly, particularly towards debt. The central banks cannot do anything for that.

Bernanke is a fool IMO. He will meddle and pull as many levers as possible and simply make matters worse and go on for longer.

You cannot hold back the tide.

Do you think the government is going to start paying money directly into peoples accounts to get them to spend??

++ Deflation is not an option.

++ Sentiment is changing as people realise they are skint and need more money - borrowing to survive not a option anymore - pay rises are!

++ Bernanke is not a fool he has been dealt a 10 high when everyone else is sitting at the table has flushes and blackjacks - he trying to bluff he way out.

++ Governments will dish cash out - the US has started - Shrub has elected to just post out checks as apposed to dropping money out of helicopters, probably thinking about saving fuel.

Heed the warnings or prepare to live on beans on toast for the rest of your life - if you're lucky.

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Don't forget, money cannot be removed from the economy (Deflation) unless:

A.) Debt money is paid back

B.) Physical money is physically destroyed

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

As pluto said, we've had 10 years of controlled inflation via a stock market and housing bubble.

The central banks are now flooding the world with paper in an attempt to stave off recession. Have you not been watching the news of liquidity injections, bank bail outs, bond insurance bail outs and fiscal stimulus packages? We're talking hundreds and hundreds of billions of dollars.

Where is this freshly created paper going to go?

You guessed it, commodities.

Edited by narco
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On the contrary, you have had 10 years of deflation (because of china) and a property bubble (isolated inflation caused by monetary expansion).

Watch and learn as the price of food and energy goes through the roof and wages start to follow as credit is withdrawn to supplement poor wages. Those banking on a deflationary bust are going to poorer than they could ever imagine. Deflation is not an option.

Like most inflationists you fail to see the difference between price increases and inflation. Credit is withdrawn? Thats deflation

If you believe in deflation you should be happy with a 1.9% increase. Everything is getting cheaper so you should be happy - right?

Yes we PREDICT DEFLATION. The credit bust has lasted 6 months so far. Japans bust has been 18 years. The great depression, the shortest deflationary depression of such magnitude was over 3 years. So an optomistic assesment is that we are 1/6th of the way into a new deflationary trend. Only enough to collapse the credit markets, collapse consumer mortgage lending and halt house price rises and kill the stock bull. Its only been 6 months and already a good 1/3rd of the people on here have realised the case for inflation is falling apart, when I joined in '06 and started warning of a deflationary depression there were NO THREADS about deflation and NO DISCUSSION of it and NO ONE would take it seriously. Deflation is commencing, of the money supply now, then later your ego. ;)

Edited by domo
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But how are we supposed to continually pay for these wage increases (public sector) ?? Darling is already 8 billion in the hole (and that is assuming the economy doesn't tank).

You say "inflation is live and well", yet (mass - nurses, teachers, police etc...) public sector pay rises are currently 2-3%, hardly "Hyper", in fact I would consider these to be deflationary if you compare them with the quoted RPI. And I notice that a lot of people here consider that to be a great underestimate of true inflation, so we are actually experiencing greater wage deflation!!

If RPI is 4%, do you consider 4% pay rises to be Hyper-Inflationary?

BTW, what would you consider to be a "Hyper-Inflationary" payrise ATM, just so when one comes along, I will know that you were right. Hopefully it will be me getting it!

Oh, what is all this "Warning" stuff all about then?, that you may get a deflationary pay rise, but think that you are better off!?!?

You are looking in the rear view mirror. Wages have been supplemented by mewing and credit cards in recent years. This option has now been removed. Looking ahead the only way to keep up with escalating fuel, food, and taxes is to DEMAND more in wages. This will start the happen in the coming years. Of course there will be strikes etc, which will all lead to a hyperinflationary bust.

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Like most inflationists you fail to see the difference between price increases and inflation. Credit is withdrawn? Thats deflation

Yes we PREDICT DEFLATION. The credit bust has lasted 6 months so far. Japans bust has been 18 years. The great depression, the shortest deflationary depression of such magnitude was over 3 years. So an optomistic assesment is that we are 1/6th of the way into a new deflationary trend. Only enough to collapse the credit markets, collapse consumer mortgage lending and halt house price rises and kill the stock bull. Its only been 6 months and already a good 1/3rd of the people on here have realised the case for inflation is falling apart, when I joined in '06 and started warning of a deflationary depression there were NO THREADS about deflation and NO DISCUSSION of it and NO ONE would take it seriously. Deflation is commencing, of the money supply now, then later your ego. ;)

Credit withdrawn for the leveraged punter, which will cause them to demand more in wages. The banks are having no trouble borrowing BILLIONS from central banks.

As I have said many, many times. DEFLATION is not an OPTION.

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Are you confident pay increases will happen across the population ?

Yes. Wages have been low and the shortfall made up in MEWing, credit cards, and bank loans. As these are withdrawn there is only one other option - pay raises. You will start to read more and more about inflation busting pay raises, especially in the public sector. Nurses, police, fireman etc will only put up with so much.

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Do you think the government is going to start paying money directly into peoples accounts to get them to spend??

People will spend if they expect inflation, refrain from spending if they expect deflation. They will watch the actions of the government(s) to decide which is more likely. So far it's looking inflationary to me.

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Yes. Wages have been low and the shortfall made up in MEWing, credit cards, and bank loans. As these are withdrawn there is only one other option - pay raises. You will start to read more and more about inflation busting pay raises, especially in the public sector. Nurses, police, fireman etc will only put up with so much.

Then surely we will see interest rates rise too.

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Credit withdrawn for the leveraged punter, which will cause them to demand more in wages. The banks are having no trouble borrowing BILLIONS from central banks.

As I have said many, many times. DEFLATION is not an OPTION.

....what if the employers are in a position to do a Branson? ie accept the low wage increase or you will be replaced.

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