RPI could be 20% before end of decade - says expert

Thrugelmir

MrRee wrote: »

Technology was no faster than it is today - increased production? Are you having a laugh? Do you remember British Leyland as an example?

I remember when the first word processor was invented by IBM in 1980. It was the size of an office desk and cost around £12,000 back then.

Technology no faster or cheaper?

How many people did British Leyland employ for the volume of output? The Honda factory at Swindon has the capacity to produce 630 cars a day (250,000) a year on a workforce of around 3,500 people.

Really2

oldvicar wrote: »

I'm sure it will be different now. But what happened back in 1800 - to cause Inflation for the year of 36.5% ?

Wars with France apparently, nice little BOE graphic here.

http://www.bankofengland.co.uk/education/inflation/timeline/chart.htm

geneer

MrRee wrote: »

If no-one is buying then inflation cannot happen - simple as.

If RPI is 20% then we are back to the merry days of the 1970's! I remember them very well indeed.

Wages were increasing at 20%+ and so people were not that worse off in reality.

What worked brilliantly was Mortgages .... you could borrow 3 times your salary, buy a house, within 2 years you were earning 50% more so that the debt was tiny with respect to your take-home pay .... so, you went out and bought a bigger house! Two years later you repeated the process.

This is how the elderly of today secured their expensive houses! Their debt was written off effectively by high inflation!

Don't be frightened by the prospect, it is not as scary as you may think!

This is where the concept of the "housing ladder" originally came from.

Buy as big as you can whilst maxing out.

Sadly advice which made !!!! all sense in the noughties.
The inflationary ladder hasn't existed for a long time.

Times could be a changin' though.
I'm sure the bulls will be quick to whoop and holler if inflation does start spiking.
Before they realise what their pensions will pay for at the end of the day.