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Cpi And Recession

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I don't know if anyone else has had this thought but:

In a recession, spending habits change. A higher proportion of income goes on essentials. Less iPods.

At some point the CPI basket will change to reflect this (I think it's updated annually)

Since it's high-tech luxuries that are falling in price, de-weighting of these in the basket will push the CPI figure upwards.

Bad news with a recession at the door.

Thoughts?

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As CPI is the base for a large proportion of Gov't expenditure (pensions, public sector pay, benefits etc), they will never re balance the basket to reflect reality.

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Don't hold your breath - luxury items (clothes, perfume, gadgets, electronics) are increasing in price at 0.5%pa according to a recent report - essentials (food, etc.) are rising at 4.4% pa.

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Don't hold your breath - luxury items (clothes, perfume, gadgets, electronics) are increasing in price at 0.5%pa according to a recent report - essentials (food, etc.) are rising at 4.4% pa.

I really don't know why anyone even bothers with the CPI - it is not credible or relevant to the cost of living - the opposition should have been shouting from the roof tops about this fraud and spin that CPI really is.

That is what the opposition is for - if we had any real opposition that is.

Soon when people can not feed themselves, pay their taxes (tax does not have to be taxing LOL!) or drive to work then no one will believe this governments fraud - when the masses wake up from their comfortable HPI induced slumber there will be trouble.

HAL

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The Government can and will move goalposts in a recession.

confidence will be shattered in the housing or any other asset market.

All predictions now, of how far property pricess will fall will be way-off

the criteria of how many jobs stay, will dictate the outcome of property

prices.

Hold on to your job !

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As CPI is the base for a large proportion of Gov't expenditure (pensions, public sector pay, benefits etc), they will never re balance the basket to reflect reality.

i'm not 100% certain but I thought the govt used RPI for some increases (pensions?)...

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With hard earning cash saved in B/S it is becoming worth less and less or certainly will be as they cut rates and infation booms. I dont suspect we are now keeping up with the real inflation not that 2. something rubbish.

Where is your cash going anybody brave enough on the Stock market yet!!!!

Bags of Rice ?

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With hard earning cash saved in B/S it is becoming worth less and less or certainly will be as they cut rates and infation booms. I dont suspect we are now keeping up with the real inflation not that 2. something rubbish.

good point and if you beleive that the UK is going to go down the same path that the Us is emabarking on this is what you have to look forward to

Meanwhile, if you're waiting for Washington to stop this rapid erosion of the U.S. dollar ... to halt the destruction of your buying power ... or to end the plundering of your retirement nest egg ...Don't hold your breath!

If Fed Chairman Bernanke has proven anything in recent days, it's this:

He's far too panicked about the damage this credit collapse could inflict on the U.S. economy right now to even think about how much the sinking dollar will cost you tomorrow.

And now ...

After five interest rate cuts ...

After last week's announcement that the Fed is willing to throw another $200 billion at this crisis ...

And after the dare-devil rescue of Bear Stearns announced on Friday ...

Mr. Bernanke is getting ready to slash interest rates yet again at the Open Market Committee meeting on Tuesday.

The great fallacy in their approach: The consequences of the Fed's rate cuts and money-pumping are not far-distant threats. They are a current, painful reality:

The U.S. dollar is now falling more rapidly than at any time in recent memory. It has just plunged to a 13-year low against the Japanese yen ... it has hit another all-time low against the euro, and ... for the first time in recorded history, the U.S. dollar has just plunged to less than a single Swiss franc.

U.S. inflation — rapidly rising prices for food, energy and other products you buy — is already at its worst since the 1980s, and is jumping higher by leaps and bounds. And ...

Washington's bail-outs of distressed debtors — whether millions of small homeowners or a small number of giant Wall Street companies like Bear Stearns — is just making things much, much worse.

The simple truth is, we are being robbed, and inflation is the thief. Every day, it sneaks into your savings account, brokerage account and retirement account, stealing the value of your money. You could scream and holler. You could call 911. But no one is inclined to come to the rescue of your dollar — not the police, certainly not anyone in Washington.

Why? Because it was Washington itself that created this dollar crisis, and Washington is the thief. So how in the heck is the government ever going to rescue us from itself?

The painful truth is that nobody in the White House, at the Fed or in Congress cares as much about your money as you do.

And the bottom-line reality is that only one person alive has both the incentive and the ability to protect your buying power, your quality of life and your financial security: You!

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  • 298 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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