Saturday, Dec 19, 2009

2010 financial hangover

Telegraph: Deflationary myth is poor excuse for irresponsible policy excesses

New figures show that UK inflation was 1.9pc during the 12 months to the end of November, up from 1.5pc the month before. That was "above consensus estimates". Having said that, British inflation, to use investment bank parlance, has "surprised on the upside" pretty much every month for the past two years. Ever since this crisis began, economists in the City of London have underestimated UK inflation and warned, instead, that "deflation" looms. As a result of this threat, policymakers have had "no choice" but to take "bold action".

Posted by quiet guy @ 08:49 PM (1118 views)
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1. paul said...

Well, someone in the mainstream media had to call time on the Bank of England's little charade. They are attempting to create inflation artificially by devaluing the currency, in order to bail out reckless speculators at prudent savers' expense.

Time to move assets out of sterling before they confiscate it like what happens in hot country dictatorships.

I'll say it again - printing money and wealth confiscation is turning the UK into Zimbabwe.

Saturday, December 19, 2009 11:23PM Report Comment

2. Jon said...

general inflation != house price crash.

Whats your point?

Saturday, December 19, 2009 11:55PM Report Comment

3. chrisa said...

I've said it on here before and I'll say it again:

The 'threat' of deflation has been BoE and G.Brown propaganda (supported by writers such as Edmund Conway and Ambrose Pritchard Evans in the Daily Telegraph, and many others who know the real score) the sole purpose of which has been to buy Government debt using QE because the usual foreign buyers of UK Government debt don't want to touch it. Halligan gets it, the others know it but are establishment lackeys.

Bearing in mind the Government needs to borrow 200 billion/year for the next three years I fail to see how QE can end next year unless the banks are now going to be expected to buy the gilts with the cash they have been hoarding. Is this money they've got from the BoE in exchange for their dodgy assets, from fleecing savers with low interest rates etc and does this explain partly their current lack of lending to businesses?

IMO Labour will see the currency trashed rather than let house prices fall to acceptable levels and rather than curb their spending and cut jobs in the public sector.

Sunday, December 20, 2009 11:15AM Report Comment

4. tpbeta said...

Much as I really want a HPC, I don't believe any of this. The gvt aren't risking hyper-inflation just to keep HPI in the air. That would be stupid. The Bank of England are self-evidently printing money to avoid deflation. Frankly Liam Halligan, who is a hack from ITN, not an economist, has been banging the inflation drum all year, and it's still a measly 1.9% CPI. Get back to me when it's over 5% and I'll take you seriously.

Sunday, December 20, 2009 09:58PM Report Comment

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