Tuesday, March 24, 2009

Where I live, the prices are going up……

Deflation risk as prices to fall

'The RPI measure of UK inflation is expected to be negative - a sign of falling prices- when data is released later on Tuesday. Economists expect the Retail Prices Index (RPI), which includes housing costs, to have declined for the first time in 49 years.'

Posted by hpwatcher @ 06:04 AM (1464 views)
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10 thoughts on “Where I live, the prices are going up……

  • I am generally in the deflation camp but I have noticed that bicycle equipment is rocketing in price. Yesterday, I bought a groupset for a new road bike I am building up.
    I usually buy Campagnolo stuff but I occasionally buy Shimano. I was staggered to see that the price of a Shimano groupset had gone up by almost 60% in the space of a few weeks. I assume it is because it is priced in Yen.

    Wiggle (the largest online cycle store) recently launched an own brand road bike to much acclaim. It scored a rare 10 out of 10 in Cycling Weekly and became hugely popular. Unfortunately they have been forced to drop the bike from their range after only two months in production because they can no longer afford to produce it at the price point. I spoke to the production manager and he told me that they needed to double the price so didn’t bother.

    I am starting to wobble a bit on my deflationist stance

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  • wobble Flash? you need some stabilisers! Bought the old Solace dvd yesterday at Tescos for £7 (hows that for deflation?) anyway one reason i got it was because some of it is filmed near lake garda. I was mountain biking there last year. I know your views on the mountain bikers – arises about the same contempt as – dare i say it – Elliott W.

    Talking about your proposed japanese purchases – how much do (or how many) companies hedge in the forex market and what % of their exposure? In commodities you look at Commitment of traders reports to find that out (well sort of) but whats your view re the UK?

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  • hi techie: only joking about mtb. Any cycling is good for the soul, especially cycling near Lake Garda. Heaven!

    If we are talking about smaller retailers hedging then we are talking about almost none of them. Many of the giant retailers have partially moved away from forex hedging and are starting to synthesize their own hedges by making sure their suppliers are based across a wider range of currencies. Makes sense I think.

    Incidentally you asked me about Fibonacci. A few years ago I worked at an outfit in the States who had all their EMA’s and MA’a tuned to 89 bar intervals. 89 tick charts and 89-day charts mostly. I blindly accepted this for a few years and when I was bored one day I asked why. Apparently it was because 89 is a Fib number and it was therefore in tune with the market. I know Fib numbers are usually used for re-tracements and extensions but it was quite interesting nevertheless. It seemed to work pretty well but who knows if 88 tick or 90 ticks would have worked just as well?

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  • Inflation will consume us all. Prices can not fall in general when the money supply is expanding.

    Deflation is a bogeyman.

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  • Thanks Flash – yes retracement at the (there are others but generally) 38.2, 50 (that old favourite) and 61.8.

    Yes 89 is a fib number – 1-1-2-3-5-8-13-21-34-55 [the % you think HPs will fall – coincidence?] and 89. Course it goes on – them rabbits no stopping em!

    I suppose a diiference between us is that I would have asked the first day!

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  • techie: I would love to give you a philosophical sounding reason for me not asking about the 89 ticks but at the time I was far more interested in boozing and being ‘recreational’ if you get my drift. Taking my seat at the ungodly hour they start Stateside was difficult enough without trying to focus on an EMA.

    I once met a guy who made his living selling a Fib program that operated on the TradeStation (my personal broker) platform.

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  • i get your drift flash – as i said “them rabbits no stopping em!” – off to “play” now – have a good one.

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  • deflation – pah!

    I nearly bought a little Beneteau fishing boat last year on special offer at £33000, but Mrs Doff wanted a new conservatory instead. I approached the Yachtbroker again a few weeks ago to find that the same boat has now gone up to £45K due mostly to £ weakness against Euro. The price of used boats has also gone up as they are being snapped up as bargains by the continentals and shipped across the channel. I hear the same principle applies to british produced meat which has gone up in price in UK due to demand/prices achieved in continental Europe.

    I suppose the conservatory would have been cheaper this year though.

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  • Conveinient for the Government that RPI is at 0, as the State Pension and other index linked pensions use this measure to increase pensions. This year no-one gets a rise !

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  • BMW s 735d saloon was about £55,000 last year, now a snip at £70,000. Surely with these rises going on the numbers of sales will drop off alarmingly. Always wanted a Fiat Panda anyway.

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