Moderator: Peak Moderation
The fact that house prices and the Stock Exchange are still rising is a clue there, BDU!BritDownUnder wrote: ↑31 Dec 2021, 12:04 I would like to know where all that extra money goes, whether to wages, or to corporate profits. That will be the clincher.
And Happy New Year BTW. It will an interesting one.
...and:The Bank of England has badly misjudged the persistence of inflation. It is also underestimating the risks that its policies pose to financial stability.
The problems, however, don’t stop there. For much of the last decade, its policies of low rates have contributed significantly to inequality, boosting asset and house prices.
Yes that it what it needs. It does not have one.After 2008, monetary policy became the economic shock absorber. Now, monetary policy has gone from being carefree to careless – and it will be a long and painful challenge to restore monetary and financial stability.
Given the vulnerability of the economy, the Bank needs a well-communicated, timely, gradual and predictable exit strategy.
US inflation up to 7.0%
We will see about that. I am not convinced they are going to take decisive action.Not since Ronald Reagan was president and Paul Volcker was the hardline chairman of the Federal Reserve has US inflation been as high as 7%, so inevitably the latest jump in the country’s cost of living index will have consequences.
The US central bank has historically tended to fear deep recession more than runaway inflation, scarred as it still is by the legacy of the Great Depression. The Fed, however, cannot ignore the risks of a wage-price spiral developing and will be forced to act.
.UK households have suffered the sharpest fall in the amount of cash they have available to spend for almost eight years, amid a worsening cost of living crisis driven by high inflation and rising energy bills.
According to a report by the insurer Scottish Widows, increasing living costs at the end of last year hit people’s pockets and led to the steepest decline in cash availability since the start of 2014
"Cost of living crisis" is also a weird term. "Cost of living" means it is a crisis encompassing everything that costs a non-trivial amount of money, but "crisis" also implies it is temporary, and there's no clear reason to believe this situation is temporary. Sounds an awful lot like collapse to me.
We should be so lucky. I think this year is the year resource limits start making an impact. Oil, as we all know is critical, but loads of commodities, including food are at record prices, many major regions are going to see inflation approach 10% this year - we're entering a resource bottleneck the like of which we haven't seen for decades.
Devaluation compared to what, though?
Bitcoin maybe.
