1.5%

eh? Nothing stays the same, and certainly not the inflation rate.
You said that "I doubt it'll go down anytime soon". I've offered a
bet that it *will* go down, to at least 2%, in the next 12 months.
What say you?

Find me a single 'commentator' who opined that "house values
would only ever go up". I'll bet you another tenner you can't.

 

I wander into banks and building societies in my lunch hour. I enjoy the
walk and the human interaction. I know that some people prefer to queue
in front of ATMs, outside, in the cold and rain, and I sometimes thinkj
that's slightly odd behaviour when there are no queues inside, at the
bank counters.

 

Nor me. I don't actually know how much I earn either. Well, I do, in the
sense that I could sit down, look at payslips, add them together, add
bonus, look at freelance receipts, add them up, etc etc, but I just
chuck it all at the accountant once a a year and let him do it.

Saves me worrying about it.

But if you asked me what my annual salary was, I couldn't tell you off
the top of my head.

 

I know what my basic salary is but because of the varied hours I work
I never really know what's going in at the end of each month.
Occasionally I work out what I'll be getting (1) but most of the time
I really don't know within a grand.

My boss has been constantly telling me if I'll break a certain figure
this year and I've been saying no chance but he kept insisting I
would. That was his way of hinting that my MPP (2) was going to be a
reasonable one and now I know what I'm getting I'll really struggle
not to go and buy a new bike.

(1) like when I had to do a few weeks of nightshift and needed an
incentive.

(2) Managers Performance Payment. Why the **** they couldn't call it a
bonus I really don't know.

 

Wel, I can understand that bit. Unfortunately for me, I know longer
work in a town centre, so a trip to the bank is a special activity.

My bank [1] has ATMs inside, out of the cold and rain

Apart from paying in the occasional cheque (maybe 3 or 4 times a
year), I can't think of anything else I've used counter services for
in the past 10~15 years.


[1] Well, I bank with First Direct, but use HSBC branches.

 

That's me too.

I walk by the people queuing outside at two ATMs and use the ATM inside
the bank with no queue.

 

Didn't a guy called Robert Gabriel Mugabe try that?

 

Oh, yes, sometimes, but there are frequently queues outside for the ATMs
when there aren't any inside...

 

Oh yes. And so did the Boxheads in 1921-22.

The only time I can see this working is when there's a run on the banks,
and you print massively in order to fuel demand, and hope that in a few
days time, people will feel sheepish and put it all back into the
banks....

I know sweet FA about economics, but it strikes me that printing vast
quantities of money, like the Poll Tax, has been tried before, and like
the Poll Tax, it proved to be a really Bad Idea.

 

And Japan in the noughties.

er, no.

Well me neither, but you make me look like Keynes

If you want to curb inflation, you limit the supply of money. This is
why interest rates are high (money is 'more expensive') when inflation
is high, and vice versa. The risk with deflation is that you can't
really reduce interest rates below zero, so once you get down there
you need another way to counter it. Printing money [1] causes
inflation, and in a deflationary situation inflation is exactly what
you want.

And, in case anyone thinks deflation might be OK ('Hey, things are
getting cheaper!'), it really would be utterly poisonous.

[1] 'quantivive easing' is actually a bit more complicated than just
printing money - it's really the central bank buying assets.

 

<snip>

Like I said, I know nothing about economics )

 

snip>

My guess is that nobody would be prepared to spend other than on
essentials in case they became cheaper the next day and the market
would come to a grinding halt. Isn't this happening with property at
the moment?

 

Heh. Reminds me of 31st dec 1999. They offered me $3000 to work the night
- well, sit in the office sober and possibly asleep.

 

That's not a bad hourly rate for staying off the pop. Did you go for
it?

I spent NYE 1999 climbing an ice gulley on the north face of Snowdon.
We hit the summit cairn shortly before midnight, necked a can of beer
each and then practically ran all the way down to the car where there
was further supply of beer. I didn't get paid.

 

Exactly. You might fancy a new bike, but it'll be cheaper next month.
Or a new TV - same. So you put off your purchase. To try and entice
you, the retailers reduce prices. In the meantime, the people who made
a living through the sale of bikes and TVs have no work, and are laid
off. So they *really* stop spending on anything non-essential, and
the potential market for bikes and TVs is reduced. Seeing this, you
think "actually, the bike might be cheaper next month *and* my job may
not be so secure, so I'll wait". And so it goes. See 'Deflationary
spiral':
http://en.wikipedia.org/wiki/Deflation_(economics)#Deflationary_spiral

Pretty much - the only people trading are those who *have* to due to
marriage, divorce, job move, etc.

 

It's the balance between inflation and deflation. Both are bad for you,
me and the country when they become, by lack of control, out of control.
But quantitative easing is a very dangerous way to go.

Since the Bank of England is a monopolist that can create money without
limit, it can carry on pumping out as much money as it wants. The risk
is not that it will run out of money but that the situation will
suddenly flip and prices will start rising uncontrollably in the UK.

Because of the impossibility of predicting the UK market at this time,
this flip point is *very* un-predictable, with a *lot* of hysteresis in
the monitory flow and demand.

This would almost certainly be accompanied by a collapse in the currency
foreign exchanges of Sterling as we do not have gold reserves free of
encumbrance to back it. Our gold reserves having been sold off by Brown,
nearly 400 tons of it in a series of auctions between 1999 and 2002,
when the price was at a 20-year low. (Something I've harped on about for
years on this group, predicting it would drop us in it.)

Such currency crises and “hyperinflation†are what undermined Latin
American and African countries for decades. Quantitative easing is a
high-risk option, *not* to be taken when other solutions have failed.
But only when *all* options have failed.

What the government is saying in effect is:

"We are really deeper in the sh*t than we have been letting on for the
last 5 years."

(During this period Brown was reprimand by the European commission
saying that Britain's budget deficit was excessive, while he was telling
us all was rosy.)

For those shouting citation etc. Google for it.

 

Nah. Already had lots of money and I've never been that bothered.
Besides, $3000 = (at that time)2000GBP - 40% tax = 1200GBP. So really not
quite as tempting after all.

What really confuses me about me is that I've never liked NYE, as in one
can't just have a nice quiet pint at the bar. All sorts of unpleasant
types emerge from the woodwork and make a lot of noise.

 

I'm thinking now might be a good time to buy a small house in the yuk.
Trouble is, owning property there is so damned expensive. Are there many
snatch-backs on the market at the mo?

 

@mid.individual.net:

A bit like an *OSM or TOGTour

 

Apart from the fact that they've been there all the time rather than
hiding in the woodwork.