House prices are going to go up - unfortunatly

B_Blank

I diversified my portfolio because I knew the government would screw savers with more QE/low IR so I have built up a resonable share position.

Really2

Graham_Devon wrote: »

Quantitative easing is more money.But how can it increase prices if it does not go in to peoples pockets?

Unless you think Hamish's theory of handing out cheques to houses up and down the land will actually happen.

You missed the rest. Which quiet obviously agrees QE is more money, but talks about it getting in to the system.

Really2 wrote: »

How can prices rise without more money? if you say by borrowing, think about it.
If lending causes people to make money and spend what would it do to the economy? Will althose people working now except companys could not affors it?

Unless you think 09 was caused by increased lending and there was an outstanding demand to borrow and that in turn did not cause increasing gdp?

Would that not totaly go againt what you say about demand and mortgage rationing?

If you could explain how the bold bit fits in with what you think that would be nice than just looking at the first sentence.

TruckerT

Really2 wrote: »

Correcrion of what

Correction of language - price rises on their own are simply price rises - inflation either means something different, or it means nothing at all

There is no shortage of oil, wholesale prices have fallen again recently I believe, and one school of thought is that food shortages are created by the planting of crops which are intended to be oil-substitutes - but food shortages didn't figure in the latest increases in price indexes

In your original post you mentioned wage spirals - in the 1970s, inflation was, at least partly, brought under control by capping wage rises

There is more to inflation than price rises

TruckerT

Really2

TruckerT wrote: »

Correction of language - price rises on their own are simply price rises - inflation either means something different, or it means nothing at all

So the BOE inflation figures should be called price rises then?

Price rises are inflation so it is the correct term. Increases means they have inflated = inflation, fairly simple English really.
Inflation is defined by prices!

Google inflation?
I don't see any site not calling prices rises inflation? to you it may mean different but in economic terms I am correct in using the term.

There is more to inflation than price rises

Yes there is and I have already said that, there are more causes of inflation than you seem willing to except.
the price of oil is set by supply and demand, so everyone fights for what is produced. If it were in over supply the trend would be down, it clearly is not, it is fairly static from May, but May is not going to show until May next year in inflation terms.


It is fairly obvious oil is up YOY and is likely to be until March next year.

TruckerT

Really2 wrote: »

So the BOE inflation figures should be called price rises then?

Price rises are inflation so it is the correct term. Increases means teay have inflated = inflation, fairly simple English really.

Google inflation?
I don't see any site not causing prices rises inflation? to you it may mean different but in economic terms I am correct in using the term.

So why your earlier references to the 1970s/wage spirals?

And why the monthly angst about whether or not an increase in interest rates will or will not help to control 'inflation' - if inflation these days only means 'price rises'. then the way to control it is simple - put a cap on prices, just as wages were capped in the 1970s

We went without power in the 1970s 3-day week, and we could do so again, if that is the only way to curb price rises

TruckerT

TruckerT

Really2 wrote: »

Price rises are inflation so it is the correct term. Increases means they have inflated = inflation, fairly simple English really.
Inflation is defined by prices!

I have already said that, there are more causes of inflation than you seem willing to except.

Those two statements are contradictory

TruckerT

sabretoothtigger

There is no shortage of oil

No shortage but a rising demand beyond production. With an excess of cash to pay for that oil but not the ongoing international trade to produce a demand in exchange for that cash we can easily see a rising price in slower growing countries

Really2

TruckerT wrote: »

Those two statements are contradictory

TruckerT

Why do you keep logging off?

How can a statement on what inflation is, and saying it can be caused by more than one thing be contadictory?

If oil stopped flowing by half tomorow what would happen to the price?
If production doubled what would happen to the price?

If China could afford to buy all produced oil at $200 and was willing to buy all of it at that price what would the cost of oil be for those that wanted to buy.

Likewise if we all got paid more but no longer need oil what would happen to it's price?

The statements are not contadictory? Inflation is defined as price rises and inflation can be caused by a number of things, like above.

Don't forget deflation is just negative inflation.

Really2

TruckerT wrote: »

if inflation these days only means 'price rises'. then the way to control it is simple - put a cap on prices, just as wages were capped in the 1970s

How can you cap the international price of something.

Cap oil at $50 but no one will sell it to us for that?

Who picks up the cost differnece when cost is higher than the capped price?

PS inflation is not just price rises, inflation is the difference in price over a year. So it can be price falls also (deflation).

TruckerT

Really2 wrote: »

Why do you keep logging off?

How can a statement on what inflation is, and saying it can be caused by more than one thing be contadictory?

If oil stopped flowing by half tomorow what would happen to the price?
If production doubled what would happen to the price?

If China could afford to buy all produced oil at $200 and was willing to buy all of it at that price what would the cost of oil be for those that wanted to buy.

Likewise if we all got paid more but no longer need oil what would happen to it's price?

The statements are not contadictory? Inflation is defined as price rises and inflation can be caused by a number of things, like above.

Don't forget deflation is just negative inflation.

A price rise is simply a number, inflation is a 'process' - RPI/CPI measures price rises, not inflation

In the 70s, inflation meant, in your own word, a 'spiral' of both prices and wages - that is not what is happening now

I have no problem with an updated definition of the word, but we also need an updated toolbox in order to deal with it

TruckerT