Saturday, July 31, 2010

It’s stagflation! The hallmark of true monetary and economic incompetence!

Food inflation 'could go beyond 10pc before next year'

Let's see them try and smooth this jump in inflation.

Posted by paul @ 01:29 PM (2344 views)
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27 thoughts on “It’s stagflation! The hallmark of true monetary and economic incompetence!

  • Yeah yeah dream on guys. Stop whinging a do something about it… or accept it!

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  • Thank you Gordon Brown and Mervyn King.

    It’s absolutely disgusting the way that GB & Labour politicised the public sector – especially the police and BOE – and the way that ambition and greed ensured the attempt succeeded.

    But why do I not yet believe that this cancer has gone away?

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  • general congreve says:

    They can’t put the interest rates up to combat this, because it’ll break the banks when everyone starts defaulting en masse on the record outstanding debt we have in the UK, everyone’s already living on the edge at 0.5%. So stagflation it is, trashed pound and lovely gold shooting to the stars, COME ON!!!

    Recaptcha: Obviously, goodnow 😉 Spot on!

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  • h_Pee @1 said….

    It’s absolutely disgusting……blah bla ……drone drone.

    Change the record, CoCo

    this crispness

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  • Basic food prices oscillate, depending on harvest conditions..

    ..and we get the hellfire and damnation story when they rise, but not a whisper when they fall..

    There was a time when families spent most of their money on food, and food price rises could spark a revolution. In some poor countries it still can..

    ..fortunately, most people in the UK today are not likely to be greatly affected or notice an increase in basic food prices, as so much of what they pay is for the processing of that food (which won’t greatly change); but it may impact the official figures, and put pressure on the BoE to act.

    I’m not sure that our Merv is completely at home with the new Govt., or in tune with their principles and priorities. I have a feeling that our George will be sending him memos saying something like “inflation is over target yet again – WHEN are you going to deal with this..”

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  • 3. braindeed said…
    h_Pee @1 said….

    It’s absolutely disgusting……blah bla ……drone drone.

    Change the record, CoCo

    this crispness

    Perhaps you should try and offer some opinion about this, rather than slagging others off. (Of course, if your not capable….)

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  • clockslinger says:

    Looking forwards, the upper moving average of the building Elliot wave formation in the last quartile is sending out a clear signal that it’s time to go long on poor people starving. Of course, only a fool would want to get a mortgage for somewhere warm and dry to live with such massive profit making oppotunities out there (only for those of us that can see it, of course). Can I have a job in the city now?

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  • “Can I have a job in the city now?”

    clockslinger, see if you can pass this very simple Aptitude test first, *without* doing any Internet searching:

    1) What has been the average price of 1 bushel of wheat for the last 25 years?
    2) Is wheat currently below or above its all time high? By how much?
    3) How many grams are there in 1 bushel of wheat?
    4) What is the current price of 1 bushel of wheat in US$?
    5) What is the average price of Weetabix Cereal per 100g?
    6) How much would 1 bushel of Weetabix cost in US$?

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  • Silverfinger says:

    @ 2 ‘They can’t put the interest rates up to combat this, because it’ll break the banks’ Absolutely spot on – great comment !
    This is the vicious circle, if they put interest rate up – then its mass defaults & mass fire sales of property – which equals lower property prices, which equals mortgages uncovered by assets ie negative equity – then massive losses for the banks and then more printing of money by BofE and another £200bn bail out of the banks – ergo sterling is trashed even more & higher inflation etc etc etc

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  • @TC haha, a flaccid, phallic, fiat fiddler.

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  • paul, we had a little debate about food shortages some time back.

    I’m getting warmer, just a question of time now. How do I know. Yes, well………………….

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  • fallingbuzzard says:

    Dumb Telegraph. There’s no price inflation on food, just margin squeeze. 30% increase in the price of animal feed does not create a 30% increase in output prices when oil prices have been falling.

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  • clockslinger says:

    Estrader, firstly, I am well aware that you have forgotten more of markets and trading than I will ever know and I in no way wish to be dismissive of the skill and judgement, let alone sheer balls, you and anyone else in such occupations employ every day. However, I do think there are certain moral limits to the operation of markets that are wifully ignored and reasoned away and an unhealthy reverence for the city. Hence the posting.
    Now, do I really have to know how many grammes there are in a bushel of wheat to get a job in the city? I really do not think so! I admit that I would be well impressed if you can tell me (without accessing the internet) how many Wheetabix there are produced from a bushel of wheat because I rather suspect that depends on the weather in any given year particularly as a bushel is an unthreshed measure, isn’t it? What about an “exotic” like a Shreddie though? Does Gordon Gekko have that at his fingertips?
    Come on! Seriously, I would stand out if I knew food prices in general, including wheat, had been low for the last fifteen years and are below peak. You personally may have far more specific knowledge (or know where to find it) but I am certain that such is not a prerequisite in order to enter a job in the city, which is what you suggest…(if only!)
    BTW, would that be cost to me as a consumer or to the manufacturer of 100g of Wheetabix at (5). If it’s the former I’ll nip downstairs and have a look (although it will only be indicative of “average” prices in my bit of the south east at a Sainsbury retail outlet, not wholesale) No, of course I don’t have that figure in my head, but neither do your mates in the city, other than if they check it on the internet/ market.

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  • Clockslinger,

    I will repeat once again, I do NOT work in the ‘city’. I am a private, retail investor working hard to stay ahead of the game. That is what you have to do if you want to get anywhere in life. Don’t wait around and expect the government to look after you or for somebody else to make money doing what you think is morally unacceptable. Please don’t tell me you are one of those people who believe that Governments and regulators should set the price of wheat! You have a group of people complaining bitterly about the way this Government has set Interest rates but you would have those same people in charge of setting the price of food!? Lord help us!!

    I did not seek to embarrass you by asking those questions. If you had ignored me and researched those questions you would have discovered that wheat is around 50% below its all time high. Are there 50% fewer poor people now? Do you now thank the ‘speculators’ for bringing down the price of wheat for the poor starving people?

    The price of Weetabix is approx 23 times more than 1 bushel of wheat so who is really exploiting the poor starving people? Perhaps the poor starving people should buy their wheat directly from the farmers and make their own flour and cereals or maybe even grow their own wheat…or is that too much like hard work? They are poor and starving but still demand that somebody else looks after them aye?
    Anyway, as I said before, if you really want to help poor starving people, buy a plot of land and start growing your own wheat. Out of curiosity, how much would you sell 1 bushel of your wheat or would you give it away free?

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  • P.S, clockslinger, *ALL* the information I use to make my investment decisions is *FREELY* available online. 12 months ago I knew absolutely nothing about wheat.

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  • “6) How much would 1 bushel of Weetabix cost in US$?”

    Good question – I just worked it out..

    ..roughly 40 times the price of the wheat!

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  • estrader @9 all your questions, as regards to working in the City (which is pretty broad in scope – not just dependent on being freakishly well acquainted with the movements of Wheat, either present or future) are incredibly shallow in scope. It also worries me that you would , as a seasoned private investor, be so heavily invested in one commodity, please reassure me that you are properly diversified. If not I fear for your financial security and your sanity. I wish you luck in your ventures, but please stop ramping wheat, as others have ramped gold. This is a forum to discuss House price movements, not a free for all to ramp their particular investment category. Good luck all who choose to play the markets rather than giving your money to William Hill, but gambling is gambling, whatever the costume and the ‘House’ always wins.

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  • clockslinger says:

    Estrader, Thanks for not beating around the bushel. That is genuinely interesting information, but how many Wheetabix per bushel? And you did say “without” looking on the internet, now, didn’t you! (So I didn’t)
    Is a bushel an unprocessed measure then?
    I don’t think the global poor would recognise a packet of Wheetabix if fell from the sky but they certainly eat grains as a staple and an upward twitch in the price of staples will have a massive effect on those at the margins. The price increase is driven , as I understand it, by an increasing demand for grain for animal feed (for meat) and this years poor harvest, particularly in Ukraine.
    I would have thought there may be very compelling reasons not to allow futures trading in certain food commodities if, as I understand it, this effects the extent of swings in price.

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  • bystander, do you really believe that anyone here could ramp wheat prices? I can’t believe that attitude of some here. Yes, this is a forum to discuss house price movements but now it seems to be a place where people do nothing but complain bitterly about how cheated they feel on their savings, and by inflation, and on BTL landlords etc..etc..etc…That is what this forum is becoming, a place where ‘helpless’ little people form support groups and whine about what is going on. I’ve tried (in vain) to broaden your horizons but that is not what you want is it? What you want is to lobby the Government to raise interest rates so that you can double the interest you earn on the pennies in your savings account….good luck. I think I am starting to agree with smugdog about this site being a group of oddballs.

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  • clockslinger,

    You really don’t have to complicate things too much. If you can put your moral issue aside and just think purely of the bigger picture, of global supply and demand, but just as importantly, the fact that commodities are priced in $US and things will slowly start falling into place. Make the correct judgement about the supply and demand situation and you will make money. You are allowed to use the Internet now 🙂

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  • clockslinger says:

    Goodness me, Estrader! Don’t give up! I actually read the blogs where the likes of you Techieman, Mark Wadsworth and Flashman post in order to educate myself about how one might trade. It is something I would love to learn, and have the nuts to do. But that doesn’t mean one has to abandon all moral scruples, or critical thinking on wider issues, does it? It is surely right to observe, as we have just seen in shadow banking, that markets are amoral and can frequently have highly undesirable effects, left unregulated. Does that make me a “helpless” little person?

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  • I think food prices may hit 15% in the next 12 months, the pound my be stronger atm (God knows why) but harvests in the UK for animal feeds have been terrible.

    Also many of the main importers of such feeds are also in bad shape (Due to wet weather)….

    One to watch as high increase in food costs will get through to the MPC and thus put pressure on a rate increase…..Or should unless we intend to default via inflation.

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  • I did a calcualtion some time ago, 1kg of wheat costs about 9p at the Bushel price (27.5kg per Bushel, $4 bushel), so flour is about 10x the raw material cost.

    In the UK, which has some of the highest yields in the world, you can get 7-8 tonnes per Ha.

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  • Reggieperrin says:

    I take it not many of you do the shoppiong.. because it’s food inflation is already running at about 20%

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  • I think that is time we all admitted defeat and brought. Clinging on the the notion that interest rates might rally any time soon is just wishfull thinking…. inflation will slowly push prices up and modest interest rate rises will keep property prices in check … the future is one of stagnating house prices.

    I know we’d all like a crash but it going to be more of a protracted wheeze….

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  • @ES
    Wasn’t there a difference mooted on a previous thread about the difference between speculation and investment? I don’t think working hard is a unqualified good, even if it yields financial returns. After all, there were plenty of hardworking Xes, where X is any abhorrent trade (torturers, assassins, slave traders etc.). Then again, maybe I am just an ‘oddball’!
    Nick

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