King warns of too-low inflation

kennyboy66_2

Really2 wrote: »

Sorry kenny VAT as nothing to do with the price of goods. It is a TAX

.

Sorry I understand that,
I just thought, that for example the CPI or RPI figures would be calculated including VAT.

To be perfectly honest, it is asset price deflation that is the main risk rather than retail price deflation.

WTF?_2

purch wrote: »

No you are not !!!

You are talking about DEFLATION OF THE PRICE OF GOODS

Don't just change tack once it has been pointed out you are talking complete drivel !!!

VAT is added to the price of goods. The price of that good stays the same, whatever happens to VAT.

I didn't change tack at all - did you not notice all the times I kept talking about consumers (in bold letters) in my inital reply????

The hype in the media has been about deflation causing problems with consumers willingness to spend because of expectations of lower prices to come.

How does implementing a measure which will cut many consumer prices do anything to address the general 'problem' of consumer price deflation causing consumers to hold back from spending because of expectation of future lower prices? It's nonsensical.

penguine

!!!!!!? wrote: »

You damn, dirty deflationista! Get out there and SPEND dammit!

I did feel a little guilty. Only a little, though.

IveSeenTheLight

!!!!!!? wrote: »

How does implementing a measure which will cut many consumer prices do anything to address the general 'problem' of consumer price deflation causing consumers to hold back from spending because of expectation of future lower prices? It's nonsensical.

This is a huge what if.

You don't know that prices will be adjusted to reflect. They could pay the same and the business has to pass on less to the govt. This in effect a quick cash boost to businesses (which the govt are trying to address) and means in effect consumer price inflation.

Who really thinks that consumers will hold back thinking that VAT (not confirmed if it is being passed on) might be reduced further. I think that most are perceiving this as one off with no set time on a review.

The VAT reduction is there too help businesses, not consumers

WTF?_2

Really2 wrote: »

:rotfl:
How can the net price remain the same and cause price defaltion.
It is tax deflation that is all. The price of the goods as not changed!
Go on a business course or somthing as you knowladge of how pricing works is very poor.

TAX IS NOT USED TO PRICE GOODS. VAT IS A TAX CLAIMED ON THE GOVERMENT BEHALF BY THE SELLER.
YOU OF SET THE VAT YOU CHARGE AGAINST THE VAT YOU HAVE BEEN CHARGED.
THAT IS WHY YOU DO NOT USE IT TO WORK OUT PRICING AS IT IS A TAX NOT SOMeTING YOU MAKE A PROFIT OR LOSS ON.

Jeez :rolleyes2

Please try reading my replies.

Let me set it out, in a simple 1..2..3.. one last time in the hope that it gets through this time:

1)We have been subject to a media campaign about the spectre of deflation causing consumers to clam their wallets shut on the expectations of lower future prices.

2)The government comes out with a consumer stimulus package which involves .... lowering consumer prices.

3) DOES ... NOT ..... COMPUTE.

pickles110564

Really2 wrote: »

:rotfl:
How can the net price remain the same and cause price defaltion.
It is tax deflation that is all. The price of the goods as not changed!
Go on a business course or somthing as you knowladge of how pricing works is very poor.

TAX IS NOT USED TO PRICE GOODS. VAT IS A TAX CLAIMED ON THE GOVERMENT BEHALF BY THE SELLER.
YOU OF SET THE VAT YOU CHARGE AGAINST THE VAT YOU HAVE BEEN CHARGED.
THAT IS WHY YOU DO NOT USE IT TO WORK OUT PRICING AS IT IS A TAX NOT SOMeTING YOU MAKE A PROFIT OR LOSS ON.

Wrong. What about all those cowboys out there that charge out including VAT but only accept cash payment. Of couse they then go on to declare this to the tax inspector. Do as your name and get real!

Lemonade_Pockets

My first post and feel like i'm wading into an argument :-)

I agree that i a discount in VAT does not constitute or contribute to deflation. Infact if anything it does the opposite. For those goods that are eligible for the reduction....surely retailers will just lift the net price to soak up this 'benefit' as profit.

If this is the case surely this is inflation if anything?????

purch

What about all those cowboys out there that charge out including VAT but only accept cash payment

You are using that as an argument to say that;

TAX IS NOT USED TO PRICE GOODS. VAT IS A TAX CLAIMED ON THE GOVERMENT BEHALF BY THE SELLER.
YOU OF SET THE VAT YOU CHARGE AGAINST THE VAT YOU HAVE BEEN CHARGED.
THAT IS WHY YOU DO NOT USE IT TO WORK OUT PRICING AS IT IS A TAX NOT SOMeTING YOU MAKE A PROFIT OR LOSS ON

is factually incorrect ????? :rotfl: :rotfl:

I guess you must be pretty stupid if you paid cash to someone without a receipt.............!!!!!

Do you base all your "facts" on your own stupid mistakes ??

StevieJ

Really2 wrote: »

:rotfl:
How can the net price remain the same and cause price defaltion.
It is tax deflation that is all. The price of the goods as not changed!
Go on a business course or somthing as you knowladge of how pricing works is very poor.

TAX IS NOT USED TO PRICE GOODS. VAT IS A TAX CLAIMED ON THE GOVERMENT BEHALF BY THE SELLER.
YOU OF SET THE VAT YOU CHARGE AGAINST THE VAT YOU HAVE BEEN CHARGED.
THAT IS WHY YOU DO NOT USE IT TO WORK OUT PRICING AS IT IS A TAX NOT SOMeTING YOU MAKE A PROFIT OR LOSS ON.

Why did inflation rocket in 1980 when Thatcher increased the Vat rate from 8% to 15%?

Dithering_Dad

Oh dear, has !!!!!! been caught expounding another one of his half-baked ideas. Is Dopester still following the WTFian economic model?

Nothing much changes on the Housing board does it?

As an aside, I love reading !!!!!!'s posts these days, he contradicts himself almost in the same sentence or he comes out with the obvious WTFian economic statements like "Interest rates will fall and then rise, a bust will follow a boom, Winter will follow Summer".

He'll be saying "Rampant deflation will be followed by rampant inflation" next with poor old Dopester nodding along with him like Graham Taylor's stooge "yes boss, no boss" - though I still think Dopester's confidence in his messiah's message faltered when !!!!!! started talking about getting a BTL (and as we know BTL is another name for Satan in Dopester's book).

Just my quiet observation on the personal makeup of the housing boards, move along... nothing to see.