MSE News: Inflation falls to lowest level since May 2000

Pincher

If they want some inflation, they can print some more money.


The thing that upsets me is, they give it to banks.
Give it to me, I promise I will spend it, so it circulates around, not sitting in a corporate account, making their capital ratio look pretty.


For two million pounds, I will build a nice house, with solar panels, rain water harvester, very good double glazing. Builders, electricians, plumbers, decorators, glazing people, bathroom and kitchen equipment sellers will all benefit. I promise I will spend every penny, honest.

antrobus

Generali wrote: »

As Japan is a massive importer of oil, and indeed pretty much all commodities, I suspect that the fall in prices will feed through to trade balances over the next year or so as supply contracts are renegotiated at lower market prices.

Well yes, one of the cited reasons for the Japanese trade deficit, is the need to import more oil to replace the energy not being produced by their nuclear plants. Presumably paying $50 a barrel for said oil rather than $100 will be of some benefit.

jamesd

Pincher wrote: »

If they want some inflation, they can print some more money.

The ECB tried it and European banks have been repaying their borrowing from the ECB faster than expected because they say there's not enough demand for the borrowing that would use the money.

Rufff

Maybe it's just me... feels like inflation always drops just as my employer is announcing the yearly pay increase.

Thrugelmir

Rufff wrote: »

Maybe it's just me... feels like inflation always drops just as my employer is announcing the yearly pay increase.

You get annual payrises? :drool:

Pincher

jamesd wrote: »

The ECB tried it and European banks have been repaying their borrowing from the ECB faster than expected because they say there's not enough demand for the borrowing that would use the money.

Lend it to me at 0.1% a year.


EURO10million please. Convert half to US dollar, and half to sterling. Let the Euro depreciate 10%, convert back to EURO10.01million. Keep the change.

Generali

Pincher wrote: »

Lend it to me at 0.1% a year.


EURO10million please. Convert half to US dollar, and half to sterling. Let the Euro depreciate 10%, convert back to EURO10.01million. Keep the change.

Ah yes, the carry trade.

As Warren Buffet said it's like picking up nickels in front of a steamroller: mildly profitable for a while but likely to end badly.

Pincher

Generali wrote: »

Ah yes, the carry trade.

As Warren Buffet said it's like picking up nickels in front of a steamroller: mildly profitable for a while but likely to end badly.

Alright, exchange rate risk is always a black swan.


What about this? Let's do a Oliver North CIA style Black Op for Angela Merkel. Angie does not want to be seen helping Greece endlessly, so I'll do it for her. I will set up a chain of front companies. Borrow EURO10billion from ECB, launder them through Bitcoin. The companies would buy mostly Greek debt, and hold them on their balance sheet. Now, float the companies on AIM, or if we are really cheeky, make them tradable as ETF.


Let's call them names like:


Olympic Greek High Income Fund.
Hellenic Special Situations Venture Capital
Titanic Unsinkable Fund


Funny thing is, if Greece doesn't default, it could be a nice little earner.

BobQ

Generali wrote: »

In terms of what mayo posted, they will have been more than offset by cheaper motoring costs. If you look on the ONS website they go into a lot more detail than mayo's post however so you can see the rise in rail fares vs the fall in fuel costs.

I agree but if you commute using rail you might not think a drop in fuel prices is much benefit!

Generali

BobQ wrote: »

I agree but if you commute using rail you might not think a drop in fuel prices is much benefit!

Very true. As has probably been said before, RPI is an average measure of the change in the cost of living and can't simply be applied universally.

It is a bit like measuring the average time that people in the UK could run 100m and then being surprised that a 22 y/o can go faster than that.

However, it's probably the best measure we have.