Comments on: Inflation deflation

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Fri, 20 Aug 2010 18:51:51 +0000

There have always been so many inovative thinker, scientists, small businesses and engineers in this country. But they have always been starved of capital and bank support.

Half of our best engineers go abroad DRIVEN there by our financial system.

It si banks who kill innovation in this country more than government. Did you know that the inventor of packet switching, the bed rock of the internet and ALL modern communications was a lovely Welshman who worked for the government in their PO research lab in Teddington? Did UK investment bankers see the importance?

Two currencies BOTH run by dolts!

By: theprofromdover

theprofromdover — Fri, 20 Aug 2010 18:40:05 +0000

Big Government likes to talk only to Big Bank; Makes them feel important; Big Bank likes only to do business with Big Corporation; makes it easier to rip a slice off other peoples money without much admin. Big Corporation doesn't mind, it isn't theirs either. In fact Big Corp. encourages it, since they can hide their own senior management fringe benefits more easily.

None of them realise that all the wealth is created by small operators, working hard and taking personal risk.
There will be no recovery in UK or USA without breaking up the banks and forcing them to serve either regional or local clientele.

When exactly is that going to happen?

What Big Bank would want the admin. hassle of lending 100k to 1,000 businesses, when they could lend 5 million to each of 20 big businesses.

There are most def. two currencies and 2 economic systems (at least) operating now. So inflation and deflation can happen side by side.

..Until the peasants revolt..

By: JamieGriffiths

JamieGriffiths — Thu, 19 Aug 2010 10:27:42 +0000

Benek99,

The coalition government is still in it's honeymoon period and the effects of their spending cuts haven't become manifest yet. Let's see where they poll after a year in government.

Hopefully Labour won't get their act together in time to offer us an easy 'out' and the seeds of change will have a chance to sprout their own green shoots.

By: RichGB

RichGB — Thu, 19 Aug 2010 09:35:38 +0000

DIY, home furnishing and travel agents are looking particularly vulnerable, especially the latter. Welcome to the Peoples' Democratic Republic of Tesco!

Remember the code word: Green Shoots.

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Thu, 19 Aug 2010 08:07:21 +0000

Dear Rich,

I too think we won't see huge inflation yet. Not for a while. We are giong to see price rises in essentials coupled with, as you say, continuing wage and wealth reduction.

I think we will see a wave of small retailer closures this autumn. Shops are not going to weather this much longer I don't think.

Greece is in terrible shape right now and getting worse fast. Should be back in the headlines soon.

By: RichGB

RichGB — Thu, 19 Aug 2010 07:34:29 +0000

Inflation coupled with deflation does sound counterintuitive, but your arguments are very convincing Golem. In years to come the economists will have to invent a new term for it - Nobel prizes are at stake. The phrase 'credit crunch' no longer describes this crisis and somewhat diminishes its importance, but defining a more adequate term with my limited vocabulary involves words from the vulgar Germanic.

The inflationary pressures this autumn/winter period will be conspicuous, even before VAT increases. However, without accompanying salary increases people will spend less and a downward pressure on the prices of everyday items is restored. There will be inflation, but I doubt it will be the double digits we saw in the 70s.

Congratulations on gaining your 50th follower Golem! Somebody is listening out there.

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Wed, 18 Aug 2010 22:39:35 +0000

For now.

If this is their moment. Then ours is not far away.

The door is so very rotten.

By: Benek99

Benek99 — Wed, 18 Aug 2010 22:36:11 +0000

Great thesis Golem, thanks for your ongoing analysis. I despair at how few options to resist this transfer of wealth there seem to be, especially when I read that polls indicate widespread public support for the UK coalition govt's 'decisive' steps to combat the deficit. It feels as if years of tabloid propaganda about the public sector and welfare provision have finally met the historical moment: this transfer of power over life to private finance is being noddingly approved by a docile population.