tag:blogger.com,1999:blog-2948538160252327076.post7111344099535879351..comments2023-11-02T15:48:50.381+00:00Comments on UK Bubble UK Economy: Why inflation will rise.Alice Cookhttp://www.blogger.com/profile/05753570123987780947noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-2948538160252327076.post-87057174053864904202009-05-17T18:22:00.000+01:002009-05-17T18:22:00.000+01:00So, which sector is it that can raise prices?The P...<I>So, which sector is it that can raise prices?</I>The Public Sector: You will pay your taxes or be made to pay!fajensennoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-84062965217307961512009-05-17T04:30:00.000+01:002009-05-17T04:30:00.000+01:00Health care is probably another segment that still...Health care is probably another segment that still retains pricing control. But anon's point is well taken that for the near term it is hard to see price inflation. Alice is correct in the medium term. <br /><br />The trillion dollar question is how many months/years define short and medium.<br /><br />The only other issue on inflation that has not been addressed comes from currency fluctuations and the resulting price impact on imported commodities. This can cause price inflation irrespective of demand inflation.<br /><br />IN the case of the UK and the Pound, this is a very real inflationary danger IMHO.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-39008412811305625912009-05-16T17:10:00.000+01:002009-05-16T17:10:00.000+01:00The government long ago decided to hyperinflate it...The government long ago decided to hyperinflate its way out of the crisis. Hyperinflation, for a bankrupt government, of course has many advantages. The young will be fine because they can work their way out of debt; the old will be screwed, but then they built the nasty old world we live in, so they kind of deserve it. All I know: I am raising my fees and rates in anticipation of this.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-28498993652041360602009-05-16T13:38:00.000+01:002009-05-16T13:38:00.000+01:00Acorn,
Honestly, I don't think the ONS are fiddli...Acorn,<br /><br />Honestly, I don't think the ONS are fiddling the GDP numbers. There are different concepts, such as the one you mention - factor cost, and there are others like market prices. <br /><br />Numbers will also vary as the ONS provides better estimates. The ONS is actually independent of the government and on occasions it has honourably challenged the government on its misuse of stats (eg knife crime). In sum, I trust the ONS.<br /><br />As for the GDP number, I would have to look it, which I will do when I have time.<br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-67906126610548415392009-05-16T13:27:00.000+01:002009-05-16T13:27:00.000+01:00Anonymous,
I will give you one sector - the car i...Anonymous,<br /><br />I will give you one sector - the car industry. At the moment, car manufacturers can not give their products away. Stocks are accumulating, and there are heavy discounts available.<br /><br />The industry is on the verge of a major supply contraction. Chrysler is in chapter 11, GM will follow by early June. Both firms will shut down factories everywhere.<br /><br />Eventually, supply will become tight, and car manufacturers will be able to pass on price increases. <br /><br />However, this contraction, which we see today, is accompanied by a huge increase in liquidity. We have also have huge fiscal imbalances that will last for years. This will create nominal demand that will lead to higher inflation.<br /><br />Anyway, that was my quick response. <br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-41497889018990272552009-05-16T12:26:00.000+01:002009-05-16T12:26:00.000+01:00Hardly that Josh. You don't pay VAT if you buy sec...Hardly that Josh. You don't pay VAT if you buy second hand silver, so you could argue that VAT supports the price of existing silver holdings.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-22892251198804270242009-05-16T11:48:00.000+01:002009-05-16T11:48:00.000+01:00Got GOLD ? It is the ONLY protection be it inflat...Got GOLD ? It is the ONLY protection be it inflation OR deflation. Silver in the UK carries VAT, a revolting tax on a monetary metal/currency.Joshhttps://www.blogger.com/profile/14479418745092947425noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-34335926521767629772009-05-16T11:34:00.000+01:002009-05-16T11:34:00.000+01:00Your analysis of the dynamics of recession is very...Your analysis of the dynamics of recession is very good.<br /><br />Part of what strikes me about the current phase is that a lot of folk are being made redundant and getting settlements as they leave. For now, they are still able to pay their mortgages but ... that won't last. (<I>And lets face it - these are the responsible people and not the sub-prime sector</I>).Fredhttps://www.blogger.com/profile/14907370323546067327noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-48312712383297345362009-05-16T11:11:00.000+01:002009-05-16T11:11:00.000+01:00Alice, You don't answer the question you pose. Nam...Alice, You don't answer the question you pose. Namely "what sector of the economy has pricing power".<br />Maintaining the public sector with debt while the private sector shrinks is -not- maintaining demand. Demand is still going down unless you think the public sector has expanded equivalent to private sector shrinkage, which is not the case.<br />The situation in 2010 will be characterised by a higher level of unemployment than today, perhaps with higher borrowing costs.<br />So, which sector is it that can raise prices?<br />There isn't one, which I think was the point of the original poster.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-1939353110614813702009-05-16T10:46:00.000+01:002009-05-16T10:46:00.000+01:00Alice, do you have any idea what the real UK GDP i...Alice, do you have any idea what the real UK GDP is? I can get anywhere between £1236 billion and £1450 billion on various web-sites.<br /><br />As Many stat's are quoted on a GDP basis, this has to be a number worth a bit of government (ONS) fiddling.<br /><br />Is it true that it is normally quoted by government at "market prices"? This makes the public sector bit look smaller. A better measure is "factor cost" and a lot of GDP isn't real money, such as the inclusion of a imaginary rental value for an owner occupied house.Acornhttps://www.blogger.com/profile/17278434278980238519noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-16286723879931497222009-05-16T09:09:00.000+01:002009-05-16T09:09:00.000+01:00Sobers,
WAKE UP!!!!
That is exactly what QE is a...Sobers,<br /><br />WAKE UP!!!!<br /><br />That is exactly what QE is about.<br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-30888768021449020442009-05-16T09:04:00.000+01:002009-05-16T09:04:00.000+01:00It suddenly occurred to me that there is something...It suddenly occurred to me that there is something of a similarity between the £150bn the BoE has apportioned for QE, and the £175Bn the govt need to raise in 2009/10. Basically Labour now know that there will be no funding crisis before the next election. They can spend on, safe in the knowledge that Mervyn will continue to buy the bonds in the marketplace. <br /><br />Of course after the next election is a different matter. At some point the BoE will have to try and sell its £150bn of bonds back into the market just as Dave & chums are trying to raise large sums themselves. Not a pretty scenario.<br /><br />I reckon its all part of Gordons scorched earth policy. Leave nothing standing for the Tories to inherit, even at the expense of the nations finances.sobersnoreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-17673529324689991692009-05-16T09:01:00.000+01:002009-05-16T09:01:00.000+01:00Sackerson,
Thank you for your kind words.
They a...Sackerson,<br /><br />Thank you for your kind words.<br /><br />They are much appreciated, along with your wonderful bearwatch blog.<br /><br />AliceAlice Cookhttps://www.blogger.com/profile/05753570123987780947noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-48533485410120202262009-05-16T08:47:00.000+01:002009-05-16T08:47:00.000+01:00How Darling has the brass neck to stand up and say...How Darling has the brass neck to stand up and say...<br /><br />1. There will be a planned budget deficit of £175 BILLION in 2009/10.<br />2. The deficit will reduce to £173BILLION in 2010/11.<br />3. we will keep spending this way until we are re-elected!!!!!<br /><br /><br />...I do not know.JohnofEnfieldhttps://www.blogger.com/profile/00956357754029961499noreply@blogger.comtag:blogger.com,1999:blog-2948538160252327076.post-11987264001010828392009-05-16T08:41:00.000+01:002009-05-16T08:41:00.000+01:00Excellent - you make the process very clear to me....Excellent - you make the process very clear to me.Sackersonhttps://www.blogger.com/profile/09410040031410954403noreply@blogger.com