Deflation? For whom?

carolt

dopester wrote: »

You always sided with !!!!!! on inflation, as opposed to arguments for deflation.

We are just in transition to heavy deflation. Doesn't happen overnight. It has been coming for a year+, as a few of us have warned. The confusing numbers aren't confusing to me... just another step-phase into heavy deflation.

I didn't 'always' believe anything. I just find it harder to apply the official govt 'line' on deflation to my own monthly budget. The Telegraph figures I posted the link to in the OP explain why.

Nothing I spend on, bar petrol, has gone down. Nothing. And as we're pretty low petrol users, that saving is immediately eaten up by rises in council tax, rises in train fares, rises in food.

Where, precisely, am I supposed to be seeing the deflation?

The only place I agree we shall all soon see it is in wages, where cutting the interest rates has had the effect of affecting RPI, and therefore feeds directly into pay negotiations.

But of course, cutting interest rates also kills the pound, thus causing inflation in all imported goods.

If by predicting inflation, you're predicting that we're all soon to be trapped between a rock and a hard place, that our dispoable incomes are all going to vanish in a puff of smoke, then I agree with you.

But if you're meaning that prices are going to fall, then I honestly don't see where you're getting that from.... Prices of houses and equities, yes. But prices of essential stuff we have to buy week in week out - no.

Please explain where you're coming from - would genuinely love to know. I can't get my head round it personally.

ad9898_3

Another great post Carol, I would love to here one of the government idiots answer these points. It would very entertaining.

Wookster

ad9898 wrote: »

Another great post Carol, I would love to here one of the government idiots answer these points. It would very entertaining.

I'd love to see some of the questions asked on this forum asked by those in the media. It seems that those in the media just aren't that all that investigative after all.

ad9898_3

Wookster wrote: »

I'd love to see some of the questions asked on this forum asked by those in the media. It seems that those in the media just aren't that all that investigative after all.

Lets face it Wooky, there are way to many VI's in the media to get to the bottom of the situation. They probably know the questions to be asked, but if the answers were implemented they would be up a creek with no paddle.:rolleyes:

StevieJ

ninky wrote: »

but what's the point of the house being worth more if that money buys less?

You money in the bank account will be worth even less :eek:

carolt

Wookster wrote: »

I'd love to see some of the questions asked on this forum asked by those in the media. It seems that those in the media just aren't that all that investigative after all.

Patrick Collinson in the Guardian's quite good these days. There are a couple of women writing for the FT too - Somerset-Webb and Rachel somebody-or-other - who are quite hard-hitting too.

But not enough, I agree.

carolt

ad9898 wrote: »

Another great post Carol, I would love to here one of the government idiots answer these points. It would very entertaining.

Thank you. I flatter myself that one of my strengths is stating the bleeding obvious, bluntly.

chucky

StevieJ wrote: »

You money in the bank account will be worth even less :eek:

i can't get my head around people worrying about 20 pence extra on a pint of milk when they are saving hundreds of pounds on something else.

i know this may reflect my personal situation but i'm sure there are many others like me (cue Mewbie).

sdooley

Originally Posted by StevieJ
Any substantial increase in inflation should act as a support for house prices :cool:

ninky wrote: »

but what's the point of the house being worth more if that money buys less?

The debt will also cost less (in real money) to repay.

ad9898_3

carolt wrote: »

Thank you. I flatter myself that one of my strengths is stating the bleeding obvious, bluntly.

Obvious to the people who want to see reality, but also well written and explained, to those who don't or won't see reality.