Deflation, deflation, deflation

Jonbvn

chewmylegoff wrote: »

I booked a return flight to Australia on Singapore the other day - £750. I paid nearly double that two years ago and the price has been well over £1,000 every time I have flown that route (which is conveniently about once a year for the last 8 years). The @rse has fallen out of the price...

You don't need to be a rocket scientist or indeed fly on a rocket to understand why.

Generali

Tromking wrote: »

As a public sector worker who has only received one pensionable pay rise in 5/6 years, does this news mean Gideon has a ready made excuse to give me s*d all again next year?

A 1% pay rise is a 1.1% real terms pay increase.

Better that than inflation at 5% and you getting 4%.

chewmylegoff

Jonbvn wrote: »

You don't need to be a rocket scientist or indeed fly on a rocket to understand why.

Well yes although the price wasn't this low in 2008/9 or indeed 2006 when the oil price was similar to now but maybe the price of jet fuel is behaving differently to then, I haven't looked it up.

System

Generali wrote: »

Apple and petrol sellers have an excess of supply to shift so they have a sale. They make less money so lay off staff.
.

But if your argument is that a lower selling price of petrol means lower income for petrol sellers, that would apply equally in the first scenario of a glut of petrol causing a price slump?

They would only have "an excess of supply to shift" if they went on buying petrol regardless of demand, or felt obliged to buy all the new surplus petrol. In reality they would only buy what they could sell.

In your simplified world, presumably the petrol sellers' only input costs would be apples.If apple prices remained unchanged, but petrol sellers were now trading in a low value commodity, surely they would be squeezed just the same as in the second "real" deflation?
"Here's a poor farmer, hanged himself on the expectation of plenty" -- Macbeth

IveSeenTheLight

Thrugelmir wrote: »

Fuel is only one element of distribution costs if you wish to that pedantic. Efficiently managing a haulage/delivery fleet requires the vehicles to be carrying their maximum goods weight.

Lets not go off on a tangent.
I made the point that this was not unexpected as a result of lower oil prices and we'll see this revers as the YOY bottoms out.

This article talked said months ago what I was referring to in my post.

http://www.telegraph.co.uk/finance/economics/11417259/UK-inflation-drops-to-record-low-as-petrol-prices-and-food-costs-tumble.html

You then made a one line statement that

Not if what are buying in to manufacture with is priced in US$.

So I ask again, please give a specific example where despite the reduction in inflation, the costs have increased as a result of buying in components for manufacture priced in USD

Generali

Clifford_Pope wrote: »

But if your argument is that a lower selling price of petrol means lower income for petrol sellers, that would apply equally in the first scenario of a glut of petrol causing a price slump?

They would only have "an excess of supply to shift" if they went on buying petrol regardless of demand, or felt obliged to buy all the new surplus petrol. In reality they would only buy what they could sell.

In your simplified world, presumably the petrol sellers' only input costs would be apples.If apple prices remained unchanged, but petrol sellers were now trading in a low value commodity, surely they would be squeezed just the same as in the second "real" deflation?
"Here's a poor farmer, hanged himself on the expectation of plenty" -- Macbeth

My example is simplified for an audience. If you want 10,000 words on deflation I can do (for money obviously) it but this probably isn't the forum for that sort of post.

IveSeenTheLight

Generali wrote: »

A 1% pay rise is a 1.1% real terms pay increase.

Better that than inflation at 5% and you getting 4%.

True, however we need to bear in mind that this is CPI and not RPI.

RPI is still circa 0.9%

Anyway, back to CPI, this statistical bulletin shows very well where the delta is in CPI change.

http://ons.gov.uk/ons/dcp171778_402959.pdf

Low and behold it's transportation which has seen huge savings as a result of the oil price.



As I was saying earlier to Thrugelmire, once this YOY change bottoms out, we'll see overall CPI rise again

purch

Generali wrote: »

but this probably isn't the forum for that sort of post.

You can guarantee that somebody, after hours of "Googling" would be able to find fault with one word of the 10,000

antrobus

IveSeenTheLight wrote: »

True, however we need to bear in mind that this is CPI and not RPI.

RPI is still circa 0.9%

....

And?

It's not RPIJ, or CPIH either. What's your point?

IveSeenTheLight wrote: »

....
Anyway, back to CPI, this statistical bulletin shows very well where the delta is in CPI change.

http://ons.gov.uk/ons/dcp171778_402959.pdf

Low and behold it's transportation which has seen huge savings as a result of the oil price.....

Well yes, we can all see that from the graphic in the OP. In what sense does reproducing that graphic add anything to the debate?

IveSeenTheLight wrote: »

....
As I was saying earlier to Thrugelmire, once this YOY change bottoms out, we'll see overall CPI rise again

Unless of course the price of oil falls to $30 a barrel.:)

purch

antrobus wrote: »

In what sense does reproducing that graphic add anything to the debate?

It does make the post look longer :wall: