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  • FIRST POST
    • MatthewAinsworth
    • By MatthewAinsworth 4th Jul 18, 10:05 PM
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    MatthewAinsworth
    Blame use of CPI for low interest rates
    • #1
    • 4th Jul 18, 10:05 PM
    Blame use of CPI for low interest rates 4th Jul 18 at 10:05 PM
    I read that we switched from using RPI to CPI in 2003, and that RPI considers mortgage /rent payments wheras CPI doesn't. RPI therefore might not necessarily decrease when interest rates are raised, so when RPI was historically high (and interest rates started from a previous high base) we would've had to raise rates much higher to bite the part of inflation that wasn't caused by housing

    As well as that, RPI, always being higher, would've prompted higher rates anyway
    RPI was wild, so rates were too

    So now we're using CPI, so we don't need high rates, and it'll respond more to interest rate rises, so I think rates will stay low

    Not only that, but rate rises would be stymied right now by mortgage debt and to keep gilt yields down
Page 2
    • MatthewAinsworth
    • By MatthewAinsworth 5th Jul 18, 10:00 PM
    • 3,108 Posts
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    MatthewAinsworth
    Mankind still can't find peace, still commits horrible crimes at home sometimes, even though we know better deep down, we are flawed- ideas like gravity and evolution and round earth or free market struggled due to biases, so once again where mankind doesn't want to believe something it won't. Today we still struggle with left wingers and active investors
    • antrobus
    • By antrobus 5th Jul 18, 10:10 PM
    • 16,231 Posts
    • 23,086 Thanks
    antrobus
    Antrobus - Its merely speculative, I gain nothing from it gaining traction, I merely predict that with time it might gain traction from other people's discovery, and testing the idea in my own mind...
    Originally posted by MatthewAinsworth
    That's not how a hypothesis is tested.

    Less pointless speculation and more reading is needed.

    History of and differences between the Consumer Prices Index and Retail Prices Index
    https://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/history-of-and-differences-between-the-consumer-prices-index-and-retail-prices-index/history-of-and-differences-between-the-consumer-price-index-and-retail-price-index---article.pdf

    I don't have evidence other than what I remember reading in papers at the time, the cheer when prices rose, the view that the economy relied in people using their houses like ATMS
    Originally posted by MatthewAinsworth
    I was referring to your claim that "it's only fairly recently that people started wanting house prices to slow down".

    Those things still took a whole lifetime to happen, and before the industrial revolution mankind did not very much for quite a while. I think in the past social immobility slowed progress and, although that's better now, especially with Internet, there is room for improvement
    Originally posted by MatthewAinsworth
    More like a third of a lifetime. Which is nothing. The Earth is over 4 billion years old.
    • Zanderman
    • By Zanderman 5th Jul 18, 11:18 PM
    • 1,860 Posts
    • 4,563 Thanks
    Zanderman
    I do believe in global warming but I don't think it really matters if half the species on the planet and a few archipelagos dissapear
    Originally posted by MatthewAinsworth
    I wasn't suggesting you didn't believe in it.

    Have to disagree on the species not mattering. But that's just my opinion.

    But you're misunderstanding the wider implications if you think it will be a few archipelagos disappearing! It'll be major coastal areas, including cities - everywhere - too. Plus (and this is the biggie) big changes in vegetation, crops and water availability and massive displacement of people as a result. The immigration and refugee issues of today will seem pathetically trivial if even the medium impacts of climate change happen. Not something to be relaxed about!

    But this is all off-topic....
    • kinger101
    • By kinger101 5th Jul 18, 11:31 PM
    • 4,489 Posts
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    kinger101
    You could list hundreds or thousands of economic changes that have taken place between those generations. Each having a pull or
    push on the economic situation of the UK.

    The change of RPI/CPI is not one that would be high up on that list.

    Some things are the fault of the baby boomers.
    Some things are the fault of the millennials.
    Some things are the fault of hundreds of years of activity catching up with the later generations.
    Some things are totally out of the control of anyone in the UK.
    Originally posted by dunstonh
    And some things are the fault of the boogie.
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jul 18, 6:18 AM
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    MatthewAinsworth
    Zanderman - it'd cost more to get co2 emissions down than it'd cost to adapt to the changes global warming will bring.
    As long as humans, and something for humans to eat exist, the earth can continue to be a productive resource. Even this planet is not particularly significant when billions of other stars have billions if other planets.

    Also although economic development takes you through a high co2 emissions stage, you pass through it into a cleaner form of economy faster if you allow economic growth.

    Antrobus - I'm not at the stage of submitting formal hypothesis, nor am I inclined, the evidence may take years more to produce
    • masonic
    • By masonic 6th Jul 18, 6:50 AM
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    masonic
    it'd cost more to get co2 emissions down than it'd cost to adapt to the changes global warming will bring.
    Originally posted by MatthewAinsworth
    Do you have evidence to support this, or are you just guessing?

    I've seen cost figures of less than 1% of global GDP thrown around when talking about reducing emissions. It seems likely that solving a humanitarian crisis on this scale would cost many times more than this.
    • Zanderman
    • By Zanderman 6th Jul 18, 7:40 AM
    • 1,860 Posts
    • 4,563 Thanks
    Zanderman
    Zanderman - it'd cost more to get co2 emissions down than it'd cost to adapt to the changes global warming will bring.
    As long as humans, and something for humans to eat exist, the earth can continue to be a productive resource. Even this planet is not particularly significant when billions of other stars have billions if other planets.

    Also although economic development takes you through a high co2 emissions stage, you pass through it into a cleaner form of economy faster if you allow economic growth.
    Originally posted by MatthewAinsworth
    I think this is the point where I bail out of this conversation. It's off topic as I've said already, you're ignoring the point I was making to you that climate change is more than your suggestion of just a few archipelagos being flooded and you're now broadening your comment out to talking about whether it is worth fighting climate change or not (which is a completely different subject to what the impacts will be) and some vague philosophical words basically saying it will be alright in the end. With that attitude nothing matters at all.

    Your thread is about CPI/RPI....
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jul 18, 9:07 AM
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    MatthewAinsworth
    It's been revealed to me that the boe used to track rpix, excluding housing, not rpi, mood to cross check but I think that kills the theory

    Zanderman - why do people emphasise the impacts of climate change if they won't think about whether it's worth tackling? Surely that's the next logical step
    • Zanderman
    • By Zanderman 6th Jul 18, 9:39 AM
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    • 4,563 Thanks
    Zanderman
    Zanderman - why do people emphasise the impacts of climate change if they won't think about whether it's worth tackling? Surely that's the next logical step
    Originally posted by MatthewAinsworth
    I'm not sure whether you're deliberately trying to misquote me or what.

    I haven't said anything about whether it's worth trying to tackle CC or not.

    I merely made the point that the impacts of CC are one thing. And they are big. The impacts will be massive. You were trivialising them.

    The measures needed to be taken to prevent those impacts is another point entirely. I haven't commented on those at all. You brought that issue up.

    As for whether it's worth tackling, you implied it will all be alright on the night, whatever happens. I have not said that at all..

    Basically there are two issues to consider - 1: impacts of CC (which will need to be tackled as and when it happens) and 2: measures to prevent it happening. If 2 happens and works 1 is no problem. Likelihood is 2 won't happen or won't be sufficient, so 1 will happen. Both 1 and 2 require mega changes in human activity. But they are different things. 2 is short term and urgent, 1 is long term.

    This is your thread about CPI/RPI and interest rates not climate change. I'd suggest if you want to discuss climate change (you brought it up!) you start another thread about it elsewhere.

    I said I was bailing out of this thread so this really my final comment!
    • talexuser
    • By talexuser 6th Jul 18, 12:08 PM
    • 2,500 Posts
    • 1,988 Thanks
    talexuser
    I said I was bailing out of this thread so this really my final comment!
    Originally posted by Zanderman
    Very wise, I'd guess by now there are a couple million more things useful to do with your time.
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jul 18, 1:16 PM
    • 3,108 Posts
    • 1,235 Thanks
    MatthewAinsworth
    https://www.google.co.uk/url?sa=t&source=web&rct=j&url=https://www.economist.com/science-and-technology/2001/08/02/the-truth-about-the-environment&ved=2ahUKEwjL9vrxuYrcAhVFKlAKHeJtAQIQF jABegQIAxAB&usg=AOvVaw0uK8iF1hRW5WsAyguX5FEC
    • masonic
    • By masonic 6th Jul 18, 6:30 PM
    • 10,133 Posts
    • 7,419 Thanks
    masonic
    This is why statisticians shouldn't venture into science. Even if they are trying to sell their book. I suppose if you have to go back almost 20 years to find someone whose opinion you agree with, that probably tells you something.
    • ValiantSon
    • By ValiantSon 6th Jul 18, 6:48 PM
    • 2,536 Posts
    • 2,518 Thanks
    ValiantSon
    I do believe in global warming but I don't think it really matters if half the species on the planet and a few archipelagos dissapear
    Originally posted by MatthewAinsworth
    Time to start reading some biology textbooks then!

    Mankind still can't find peace, still commits horrible crimes at home sometimes, even though we know better deep down, we are flawed- ideas like gravity and evolution and round earth or free market struggled due to biases, so once again where mankind doesn't want to believe something it won't. Today we still struggle with left wingers and active investors
    Originally posted by MatthewAinsworth
    1. Gravity is a demonstrable law of physics.
    2. Evolution is a theory, for which a corpus of evidence exists, that suggests it is correct.
    3. The Earth being round (not exactly a sphere, however) is another demonstrable fact.
    4. The benefit of free markets is debatable, and completely different from the two facts and one well-established theory in your list.

    Stop comparing apples and oranges.

    and before the industrial revolution mankind did not very much for quite a while.
    Originally posted by MatthewAinsworth
    Looks like you could do with reading quite a bit of history, in addition to the biology.
    Last edited by ValiantSon; 06-07-2018 at 7:02 PM.
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jul 18, 8:19 PM
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    MatthewAinsworth
    Valiant - I believe in all those 4 things but my point I'd those ideas were not quickly accepted by humanity - just because something is true/has strong evidence (even when it does) it is still slow to gain traction

    You have to think, why did it take centuries to come up with the computer?
    • ValiantSon
    • By ValiantSon 6th Jul 18, 8:34 PM
    • 2,536 Posts
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    ValiantSon
    Valiant - I believe in all those 4 things but my point I'd those ideas were not quickly accepted by humanity - just because something is true/has strong evidence (even when it does) it is still slow to gain traction

    You have to think, why did it take centuries to come up with the computer?
    Originally posted by MatthewAinsworth
    You are still comparing apples with oranges.

    You don't seem to understand how technology advances. There is no universal ideal that is, "the computer". Millenia (not centuries) of human civilisation resulted in numerous advances, with each generation building on the achievements of their forbears. It has nothing to do with an idea gaining traction, and it also has nothing to do with your unsubstantiated theory about the metric used to measure inflation affecting interest rates.

    "If I have seen further it is by standing on the shoulders of Giants." - Sir Isaac Newton, 1675

    Oh, and you still need to read lots of history and biology, as your comments clearly show sizeable gaps in your knowledge relating to how civilization has developed, and the impact on the eco-system of the loss of, "half the species on the planet and a few archipelagos disappear[ing]."
    Last edited by ValiantSon; 06-07-2018 at 8:37 PM.
    • MatthewAinsworth
    • By MatthewAinsworth 6th Jul 18, 11:11 PM
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    MatthewAinsworth
    Mankind wasted a lot of time building monuments, fighting wars, etc, and a lack of social mobility meant ideas would only be considered if they came from nobility, people back then didn't see a need to develop and religion was used to make serfdom more paletable

    Specifics/ semantics take too long
    • antrobus
    • By antrobus 6th Jul 18, 11:17 PM
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    antrobus
    Mankind wasted a lot of time building monuments, fighting wars, etc, and a lack of social mobility meant ideas would only be considered if they came from nobility, people back then didn't see a need to develop and religion was used to make serfdom more paletable

    Specifics/ semantics take too long
    Originally posted by MatthewAinsworth
    Not one second of time has every been wasted on education. Eons have been squandered on idle speculation.

    I'd suggest you devote your time to the former rather than the latter.
    • ValiantSon
    • By ValiantSon 7th Jul 18, 9:55 AM
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    ValiantSon
    Mankind wasted a lot of time building monuments, fighting wars, etc, and a lack of social mobility meant ideas would only be considered if they came from nobility, people back then didn't see a need to develop and religion was used to make serfdom more paletable
    Originally posted by MatthewAinsworth
    Wrong on so many levels. I am a historian, and I have to tell you that you are making so many assumptions that your comment has no credibility. To illustrate a point, there was no serfdom in England before the Norman Invasion, and religion was not used to make serfdom more palatable.

    Why do you think, "building monuments" was a waste of time? Do you really think that we don't still build monuments?

    Do you think that we no longer have wars? The last century has been one of the most violent in history.

    Specifics/ semantics take too long
    Originally posted by MatthewAinsworth
    Eh?
    • Sapphire
    • By Sapphire 7th Jul 18, 1:07 PM
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    • 4,429 Thanks
    Sapphire
    Millenia (not centuries) of human civilisation resulted in numerous advances, with each generation building on the achievements of their forbears. It has nothing to do with an idea gaining traction, and it also has nothing to do with your unsubstantiated theory about the metric used to measure inflation affecting interest rates.

    "If I have seen further it is by standing on the shoulders of Giants." - Sir Isaac Newton, 1675

    Oh, and you still need to read lots of history and biology, as your comments clearly show sizeable gaps in your knowledge relating to how civilization has developed, and the impact on the eco-system of the loss of, "half the species on the planet and a few archipelagos disappear[ing]."
    Originally posted by ValiantSon
    With regard to the 'numerous advances of human civilisation, with each generation building on the achievements of its own forbears', I would say this is true of the history of our society, which took a couple of painstaking millennia to get to where it is now. However, that it is not the case in many other parts of the world, which appear to be 'stuck in a rut' and not benefitting much from the 'building' of their own achievements, for whatever reason (climate and the resulting natural environment, geology, religion, traditions linked to those things, and so on, all interrelated). If you look at the Aboriginals of Australia, they existed without 'advancing' for millennia, since they were limited by their natural environment from doing so, and didn't really need to 'develop'. 'Advancements' have generally come about from competition between clans, tribes, city-states and so on (vying for diminishing resources, especially due human populations outgrowing their habitats, has been a driving force behind such competition). I don't think the human species has changed to alter the basic 'tribal' drive of humanity, however much we, in our currently cosseted society, may try to convince ourselves that it has.

    Also, I do believe that history seems cyclical rather than linear. All great civilisations fall. I somehow don't think that our own civilisation is immune to a fall, however improbable that may currently seem to many in our society. Decadence and probably complacency generally precede falls in human civilisations, and there is some evidence of those things in our society.

    Agree with your final paragraph.
    Last edited by Sapphire; 07-07-2018 at 1:49 PM.
    • ValiantSon
    • By ValiantSon 7th Jul 18, 2:23 PM
    • 2,536 Posts
    • 2,518 Thanks
    ValiantSon
    With regard to the 'numerous advances of human civilisation, with each generation building on the achievements of its own forbears', I would say this is true of the history of our society, which took a couple of painstaking millennia to get to where it is now. However, that it is not the case in many other parts of the world, which appear to be 'stuck in a rut' and not benefitting much from the 'building' of their own achievements, for whatever reason (climate and the resulting natural environment, geology, religion, traditions linked to those things, and so on, all interrelated).
    Originally posted by Sapphire
    Your analysis is anglo-centric. You have ignored the fact civilization developed in Asia and Africa before it did in Europe. I didn't actually say anything about geo-specific civilizations, I talked about human civilization as a whole.

    Are you really suggesting that your so-called, "stuck in a rut" societies are not civilised? Or are you suggesting that there has been no technical advances coming from within them? That would also be wrong.

    If you look at the Aboriginals of Australia, they existed without 'advancing' for millennia, since they were limited by their natural environment from doing so, and didn't really need to 'develop'. 'Advancements' have generally come about from competition between clans, tribes, city-states and so on (vying for diminishing resources, especially due human populations outgrowing their habitats, has been a driving force behind such competition). I don't think the human species has changed to alter the basic 'tribal' drive of humanity, however much we, in our currently cosseted society, may try to convince ourselves that it has.
    Originally posted by Sapphire
    Hmmm, you're getting dangerously close to representing the idea of the 'white man's burden'. Aboriginal society was civilized; technical advancement and civilzation are not the same thing.

    You'll find that a number of major developments have nothing to do with clan/tribal/national rivalries. For example, the printing press is the product of ingenuity divorced from these supposed pressure, so too is Newton's Principia Mathematica, Einstein's theory of relativity and the corpus of works (Planck, Schrodinger, Heisenberg, Born) that established quantum mechanics. While such competing agencies (a more accurate and inclusive historical term) as you hint at do have relevance, they are not the only method of affecting change. Causation is complex and myriad in its forms.

    Also, I do believe that history seems cyclical rather than linear.
    Originally posted by Sapphire
    No, history is not cyclical. This is one of the great myths, but neither is it linear. Linear history would suggest progress, in the mould of the Whig view, but this has frequently been demonstrated to be false. Cyclical history fails to appreciate the unique characteristics of all events and socities, and instead opts to draw superficial comparisons to reach a flawed view.

    All great civilisations fall. I somehow don't think that our own civilisation is immune to a fall, however improbable that may currently seem to many in our society. Decadence and probably complacency generally precede falls in human civilisations, and there is some evidence of those things in our society.
    Originally posted by Sapphire
    I haven't actually argued anything to do with this.

    I do, however, take exception to the idea of, "great civilizations" as this is a pejorative view.
    Last edited by ValiantSon; 07-07-2018 at 2:28 PM. Reason: Typo
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