They want their cake cut both ways and with an argument either way but they fail to appreciate that British people aren’t daft enough to see they aren’t cutting any of that cake for them because Labour has already scoffed it.

More likely is a resurgence of inflation in the next year. As the BoE (and the Fed in States) starts to increase the money supply (thru Quantitative Easing) so eventually the mood in the economy will change: there will be so much money in the economy that people will want to get rid of it, exchanging it for “hard” assets – gold, silver – for fear of the inflationary conseqences of King’s and Brown’s/Mandy’s fool hardiness. The money created out of thin air to date has stayed in bank’s reserves as they build up their asset ratios. They will reach a point when they will start to lend this out. And so the inflationary spiral will begin. Ofcourse the monetary authorities could employ effective counter expansionary action. But they have singularly failed to do this in the last 12 years so what makes anyone think they will be better at it this time around?

And there will be no improvement in unemployment as inflation takes off again either. The belief that higher inflation inevitably leads to lower levels of unemployment is mistaken. Even with unemployment approaching 2 and then 3 million there will not be a universal unemployent of all of the factors of production (including labour) that industries will need to expand. Bottleknecks will be rife.

The whole deflation argument is to soften up the people for the printing of money in order to inflate away the debt. No doubt some dodgy statistics will be used to hide it until the last possible moment by which time it will be too late.

For those who think devaluing the currency is a good thing I recommend looking at the growth statistics from the 70’s and 80’s when we last “devalued”. The only way forward is to get back to sound monetary policy (thats money supply growth and not inflation) and supply side policies. Otherwise the next growth cycle will be demand driven with no supply resulting in inflation…..

Indeed.

And by the same logic the declining Zimbabwean dollar is fueling an asset price boom in Zimbabwe.

Numpties.

I thought it was quite the opposite: a. national wealth should increase as we export profitably to customers outside the country, thus earning money. b. inflation will indeed suffer an upward spike from higher import costs due to the weakened pound, but only this year. Next year there will be no similar inflation in cost of imports (unless of course the pound falls again), and so inflation should collapse to zero or below.

Have you expressed a view yet as to the inflationary effects of the quantitative easing that we keep hearing about in the news? This seems to me to be a problem in the making; if we have a lot of inflation from this source, I don’t know when and where we could expect to see it.

Kind regards

Reply: I have. I said there are inflationary dangers fron such a measure if it is undertaken in conjunction with high levels of state borrowing and spending and if it is not withdrawn early into the recovery.

When you look at economically inactive work-age adults that is not the case! We need to find a matrix whicjh compares apples with apples – we have a much level of people on incapacity benefit and so called training schemes than many EU nations!

The ultimate measure of inflation is the GDP Deflater the Treasury and the ONS calculate; and I don’t believe that either.

Redwoodians, have a look at the following. I suspect the UK uses the same tricks as the US does. If I am wrong, perhaps an employee of the Treasury or the ONS will correct me; have the balls to tell us the truth on this web-site.

http://www.chrismartenson.com/crashcourse/chapter-16-fuzzy-numbers

Socialists, doncha just love them.

Obviously it has nothing to do with fuel prices – ( no change ).
Nothing to do with lower energy prices – ( not occurring yet until the next bill ).

Food prices? – What food are they measuring?

This National Audit Office personal inflation calculator gave me a rate of 12.7%.

http://www.itv.com/News/newsspecial/InflationStreet/PersonalInflationCalculator/default.html

I’d like to say I feel as though it’s 3% but the monthly income on my savings tells me otherwise as that has depreciated by 4% alone before I start measuring increases to outgoings.

This government lives in cuckoo land.

Also, I wonder why we’re in a global economy but not in a ‘globally agreed benefit’ which is commensurate with the cost of living?

Today I’ve gotten figures from America, Holland, Greece, Romania and France, and Britain is still in the middle ages by comparison yet we’re supposed to be one of the richest countries on earth.

Why is it, that politicians are so dead set to beat down the unemployed here and tell them to find work in Europe when unemployment rates in Europe are higher than here?

Also, where has our money gone into these banks, what have they done with it, who got it, and why, and can we get those figures discussed please once someone bothers to ask the government where it spent our money and why it bashes British workers, unlike Obama who is lifting his further up the scale.

Again confusing the measuement with what is being measured.

Great to see journalistic standards upheld.

Basic raw materials come from abroad 25-30% increase (which we cannot get from the UK), and are machined by our Suppliers into finished product in this Country.

We will increase prices to our customers from next month.

So the lower exchange rate is good for business is it (todays newspaper comment from the Government)!!!!!!!!

When will someone learn that our manufacturing industry is now at a very low level, we now produce little but import a lot !!!!!

It means our Balance of Payments Deficite will get worse.

The daily telegraph’s cost of living survey “apparently” shows we have deflation – due to the lower cost of mortgages at present, when in reality we have inflation – just look at gold prices to see the flight from most currencies.

The lower interest rates just hide the signs of inflation – while at the same time increasing it.

Inflation is about the money supply. The erosion of the value of every pound in your pay packet or deposited in the bank by printing more money or increasing the Band of England balance sheet. It is what the government want to do as the only way to reduce the huge debt they have built up by debasing the value of the money that the debt is held in.

Do you think your wages will increase at the same rate as 25 % inflation?

The VAT cut hid inflation – without the VAT cut inflation would be 4.1% – Hardly deflationary. Why else would you throw away £12 billion?

……… then Govt. brings up the great spectre of DE-flation as a warning and excuse to debase OUR money to escape from its own mistakes.