Where are all the deflationistas reboot?

Come out come out wherever you are. I know you are in here somewhere chiseller.

Larry

All I said is that inflation would fall well below the 2% target. It hasnt fallen as far s I expected for sure , and is likley to increase rapidly over the next few months. However. There is still no lending out there, and peoples behaviou is deflationary. With the exception of fuel, many areas o fteh economy are experiencing lower prices.

Are you suggesting teh increase in CPI is a prelude to hyper inflation?

chisel 17 Dec 10:59


All I said is that inflation would fall well below the 2% target.



LIAR, this time last year you were telling us "deflation was inevitable"

potlis

He nearly got me there. You try to take people at their word but they so often don't play by the rules of the game. I seemed to remember Chisel in particular banging the deflationary drum.

Larry

Sure I expected it to go negative, but that is hardly the most inaccurate of predictions given that it fell from 4% to 1%. If it were not for the weak pound, it would inevitable have been similar to Ireland etc.

I still do not expect much inflatinary pressure for teh forseeable future

So you were wrong then.

Don't worry. You will call something right one of these days.

i speak for the deflationistas.
when we started this discussion around here, the qe programme was planned to run at 75bio. since then it s been increased to 200bio, with the boe considering more at ever meeting.
given these circumstances, the fact the inflation is running at 2% - and trust me this is going to be a seasonal effect - is very positive.
just 2 considerations.
first, we probably all forgot that in the precrisis times - summer 08 - inflation was rather around 5% than 2%. and this with all the printing presses working at full capacity
secondly, that most of the 'inflationist' camp was thinking of a weimer like inflation, with double digits almost guaranteed.
story is, with the output gap we have in the world and in the uk there s no chance of a sustained pick up in prices, and come the spring we ll find again the cpi going towards 1% and below.

johnie - assuming sterling doesn't take another nose dive, of course

johnnie.

You play with fire.

not out of the woods yet johnnie. far from it imho.

my food bill is going up every week!

im getting fat too :p

and come the spring we ll find again the cpi going towards 1% and below.

......... don't forget to factor in the reversal of the VAT reduction, the certainty of council tax increases, the inexorable rise in food prices and the 'dropping out' of the 'benefit' of low mortgage rates from the inflation numbers. Those are not the triggers for "1% and below".

Look , we all know that oil prices are up and we also know VAT increases in January.. Bottom line is that we are still in recession, jobs are still being lost and banks are still not lending. There will be no 5% inflation next year , and it will fall back towards 2% or even lower as the year progresses.

Like J W correctly observes. The fact that inflation didnt fall as far as expected is because the BOE done everything it could to stop it going negative. Just like Interest rates being 0.5% have stopped house prices falling. It is amusing that the same people suggesting house prices would fall 20% this year are the same that are predicting Sterlings collapse and MUCh higher inflation. For teh record we will see low inflation throughout 2010. we will see INterest rates stay at 0.5% for the forseeable future and WE WILL NOT see a downgrade of UK debt. Next year will be a tough year, but we will get through it .

Ouput gap is complete BS. Factories around the world have been mothballed & workers dismissed. The factory owners aren't for re-hiring.

chis. maybe the drop will be a real terms drop, ie nominal value goes up but real value is lower due to inflation. so both inflation and house price drop could occur at the same time potentially.

or maybe the house price drop will occur first, before inflation really sets in (seen american figures? defaults up 20% i hear)

1st & 2nd class stamps up 2 pence.

I speak for those who argued against deflation , and I don't recall predicting "weimar" like inflation, some rewriting of history by the "deflationists" taking place here. YOU predicted it and got it WRONG, just put your hands up!
I do remember some debt peddler predicting that manufacturers/producers/wholesalers and retailers would be "forced to slash prices" in order to survive, and me being jumped on for suggesting that in recession its often the opposite that happens, businesses often try to increase prices in the knowledge that turnover is bound to fall. They try to increase margins in the knowledge that they will sell less, It's not PRICES that get slashed in recessions, it's overheads, hence rising unemployment, and closing branches. Prices have risen every month since the prediction that they would be "slashed".

potis

get a grip. prices are falling as are margins. next year willbe a tough one. merry xmas

get a grip

Advice you regularly dish out to others, that they have mostly been proved right, and you wrong, doesnt stop you, you're obviously too stupid to be embarrassed by that.
Whats amazing is that having spent endless hours conversing on a financial forum you have managed to remain so dumb!!

"prices are falling as are margins"
In a month when inflation leapt, and with most retailers reporting double digit profit increases, thats your silliest statement yet, must have been that third portion of sherry trifle.

Guys don't forget that government inflation figures don't mean an awful lot.

The only thing that's deflating is the value of the pound.

BUMP

Lurpak up from 1.24 to 1.36. That's inflation for ya

There is going to be some egg on faces but I'll bet there is at least one who will wipe it off as if nothing has happened and blunder on to the next ludicrous prediction.

Get ready for a huge increase in factory gate input prices.

Analysts surprised as usual.

I agree that prices are increasing. Gone are the 3 bottles for a tenner at TESCO , and instead two for one! Not good. Also I note tactics of tying to flog smaller bottles.

Not much more I can add really, except we are likelty to be near the end of teh year by the time rates increase, at what time inflation may be cooling and we will all be talking about deflation again.

I am not afraid to admit that I was wrong from time to time!

Thus, despite relatively weak domestic demand, UK goods prices in the broad RPI index were up 6.5 y/y in January. While the VAT hike can explain some of that, of course, it doesn't explain why goods prices were up 5.3% y/y in December, before the normalization of VAT.


http://macro-man.blogspot.com/2010/03/day-of-reckoning.html

chisel 25 Dec 19:49


potis

get a grip. prices are falling



chisel 03 Mar 15:55


I agree that prices are increasing. .
-------------------------------

pmsl

Does that mean I don't need to "get a grip"

Look at how much value the pound has lost against almost every single currency over the last 12 months to see why we will not see any deflation here.

Anything we import, is now around 20% more expensive (if you are paying in GBP).

Look at how much value the pound has lost against almost every single currency over the last 12 months to see why we will not see any deflation here.

Euro twelve months ago 1.12 Now 1.11
$ twelve months ago 1.41 Now 1.51
Aus $ twelve months ago 2.20 Now 1.66
China twelve months ago 9.65 Now 10.32

Not quite the dramatic picture you paint.

^^^ try 24 months for a very different picture

potlis 04 Mar 08:37


chisel 25 Dec 19:49


potis

get a grip. prices are falling



chisel 03 Mar 15:55


I agree that prices are increasing. .
-------------------------------

pmsl

Does that mean I don't need to "get a grip"


It means he stands a very good chance of being partly right.

Madasahatter there's more than 4 currencies. Dollar, Euro and Renminbi have been massively debased as well which is why the pound hasn't fallen as far against those particular curencies. In fairness I should have said the last 9 months not 12.

Fact is the pound is hitting new lows against multiple currencies on a daily basis at the moment. Look at the price of gold in sterling.

These are year on year figures...

Canadian dollar down 15% in last 12m
Brazilian real down 20%
Mexican peso down 13%
Swedish Kronor down 16%
SA Rand down 30% (holy cow!)
S Korean Won down 22%
Indonesian Rupiah down 18%

For a much scarier picture try looking at the last 9 months as Mad Hatter pointed out.

* When I say new lows I mean new '12 month' lows

If you had a savings account that yielded 15-20% annually who wouldn't be chuffed with that? By dumping £££s for stronger currencies and/or commodities that is effectively what you'll be getting.