Britain's inflation is heading back to 4 per cent territory as you'd expect with the Bank of England printing money and using the debt to finance government spending. If you create more money, you reduce the value of the money. Citi has done another brilliant research note, which it is putting online, laying out the implications. The punters are facing pay freezes, or settlements below 2 per cent. The cost of living is soaring. Result: misery.
It was bound to happen eventually, it's nearly as immutable as the laws of physics. And we all know what happens when inflation goes up, don't we? Yes, kiddies, interest rates go up. If you thought that people reneging on their debts was on its way out, brace yourself for round two of this little party.
And the funny thing is, if those UTTER CUNTS in the government hadn't indulged in Quantitative Easing, this wouldn't be happening now.
2010 is going to be a very exciting year. For all the wrong reasons.
6 comments:
The remedy that worked before for inflation was higher interest rates. But the government - either side - might be keen on letting inflation rip a bit. It is going to be near impossible for workers to strike in the private sector. It is suicide in the present economic state. The public sector are hated already, so it is unlikely they will get much sympathy for strikes there either. Indeed it is likely they will be decimated anyway to cut the deficit, so why not take all the pain in a oner and let them strike?
Keeping interest rates low allows the savers and pensioners to be defrauded of their savings as the real value of those plummits. It keeps government borrowing costs down. It collapses our currency - which robs the foreigners who lent to us in sterling. And faced with the loss of purchasing power it forces savers to spend their money or take it out of the bank and buy assetts like houses and shares which are bound to surge in price as the cheap money already is causing an assett bubble in both classes of investment. Forced jumping on the bandwaggon.
The incoming Tories can blame the idiot they deposed, and the middle class can pay for their folly in electing the war criminal in the first place.
It may be a few years before we get a Chancellor willing to sort the mess. Then the remedy of the 70's can come back into fashion, and we will all praise the new massiah.
I'm old enough to remember when interest rates were below the inflation rate. If that happens again, and both are high, then both borrowers and savers will get shafted.
Do just what Gordon wants.....buy things.
But, spend everthing you have buying useful articles like tinned food, clothes, fuel, etc. Any other survival gear that springs to mind like tools and seeds. Possibly some trade goods as well for when the pound is worth three fiths of sod-all sometime in the next year or so.
You know it makes sense.
Someone I knew who had lived in Poland said that the farmers there saved their money in the form of bricks and building timber. They didn't trust the currency and there was always going to be a demand for bricks and timber.
I'm thinking Barret 50cal with loads of ammo ........just for home defense you understand.
Now wheres fife ........
QE is a government conspiracy to mask the fact that there is no fucking way certain western governments will sell enough bonds to pay their debts. nout to do with stimulation and everything to do with propping up bonds, keeping a lid on yields, and getting shit sold in the face of oversupply.
you heard it here first unfortunately.
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