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Inflation

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AnDy62 said:
That vicious cycle was targetted under the Howard govt ....WorkChoices etc - i.e. by linking wages to productivity. But hey, who can complain about Rudd and his superficial cliches, what a champion
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I never quite understood this. Why are things like wages preferred to be linked to things like productivity via a legislative framework? I heard an AMP report today that indicated that since 1986, house prices had increased 400% but wages only 120%. Why should wages be constrained by anything other the same forces that constrain commodities and asset prices which can also affect inflation?
 

Hmm there are good points and bad points. If wage growth becomes detached from productivity, producers will shed labour for capital - unemployment etc etc. Whether this happens in reality to a meaningful extwnt I'm not sure. Also, cost-push inflation would have crippled Australia's exporters and our CAD would be more outrageous than it already is. Overall its a balance ... and one the legislative structure has decided upon. As for the housing boom that's separate to AS/AD analysis IMO, rather a change in the economy's composition.
 
Well, well, well, what do we have here, could the Reserve Bank be the cause Inflation in Australia???

I wonder where all that extra money came from???



Definitions

M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency.

M1: M0 - those portions of M0 held as reserves or vault cash + the amount in demand accounts ("checking" or "current" accounts).

M2: M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000).

M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.

Source ==> http://en.wikipedia.org/wiki/Money_supply
 

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UK, RPI inflation, fell from 5.2% to 4.5% in October (the retail prices index that includes mortgages, fell from 5% to 4.2%). Forecast for the lowest point in 2009 is -1% for the retail prices index.
 
The headline annual rate of inflation (RPI) in the UK fell in December to 0.9% from 3%. This is the lowest rate ever recorded.
The (CPI) which excludes mortgage costs, fell to 3.1% from 4.1%.

The £ crashed to US$1.40 on news of the banking crisis on Monday. Down from US$2.05 in 2007.

UK jobless is set to reach 3.4 million by the end of 2011, forecaster Ernst & Young Item Club predicts. All of the UK's economic statistics are reported to be in free-fall.

The UK economy is forecast to see its largest contraction since 1946.
 

I also noted the other day that some of the world's big currency traders are advising others to toss the pound and go for the yen... how low will the stodgy Brit brick go?
 
Aussiejeff said:
I also noted the other day that some of the world's big currency traders are advising others to toss the pound and go for the yen... how low will the stodgy Brit brick go?
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My biggest worry is the Aussie economy which is about a year behind Europe. WA is contracting sharply and QLD and NSW are also in trouble. The Aussie$ has moved down as sharply as the British pound and Aussie banks have invested in Europe and will have write offs.

Australia failed to make as big a move away from Britain as it should have done. Bad news UK banks will send their shock waves across the pond to Aussie shores. Mining, oil and gas etc., are in steep decline, there is no get out of jail card here, we're locked in.

On the British pound, it may be the case that the Euro is so strong, weaker countries in the Eurozone have a quandary. Less chance of a run on the currency but exports are expensive. Britain has a run on the pound but exports are cheap.
 
UK inflation, up to February, was zero on the RPI index, down 0.1%, this index includes Housing and mortgage costs.
The CPI index rose 0.2% to 3.2% due to higher food and drink costs. This index excludes Housing and mortgage costs.
 
Inflation = increase in the money supply.

If you want to be totally delusional, like every mainstream nut Keynesian / Monetarist, you'll think it's CPI.

Fail..
 
Wozza Buffett
 
At 16min he rips Dan andrews. Guy is ripping on everyone.
 
He makes sense. I am again watching the video.

So I have questioned

Covid cases, sounds bad. 2.4M people died

From total cases of covid 2% will die, if the reporting stats are correct and then looks at the overall figures

7800 Million world popluation, with 2.39M deaths, far out, this virus must be bad, so far it has killed, 0.000..... of the world population

So lets say it was 200M deaths (the world is ending) 0.02% of the world population.

This is crazy stuff, we are happy to kill sharks at a greater rate of 2% per year, but humans (the virus of the earth) cannot deal with.
 
So far as consumer prices are concerned, some random examples year on year for the exact same product from the same supplier:

Heating Oil = +12.5%
Communications (mobile) = +10%
Insurance (house & contents) = +6.4%
RAA roadside service membership = +4.4%
Insurance (health) = +3.1%
Electricity (household) = +2.3%

Vaccination (cat) = -4.7%
Insurance (car) = -10.1%

These are all prices paid by me for the exact same service from the same supplier or on a per unit quantity basis.

So from what I'm seeing there's a large discrepancy depending on what you're buying, it's not a reasonably uniform increase in consumer prices.
 
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