I was wondering if inflation will actually fall, as predicted, with the collapsing pound. For instance oil is priced in Dollars, and the pound will soon be parity with the Euro, in my opinion.
Most of everything that is bought is via A- taxation or B- imports, both of which could well increase.
Much household expenditure can be deferred, so you may get a good price eventually. e.g. cars and power showers (goods and services).
those factors mean the price of oil in the uk will rise... rising prices means sommat different from inflation
inflation makes your currency worth less... approximately.. if your currency is being inflated (ie devalued) more relative to another currency, then in due course you'll get less of the other currency for your own...
that para isn't wholly clear to me
you're asking fairly complex questions with different answers....
start here
If the pound falls against other currencies, logically overseas commodities will become more expensive (since the pound is falling against everything). Previously this led to 'wage inflation' as people sought large pay rises or moved jobs in order to improve their wages etc. The government printed more money, and everything balanced out again because other countries were prepared to simply accept more pounds for the same item, regardless of whether the pound was intrinsically worth anything or not. But this can't last for ever, sooner or later you'll be paying a million pounds for a skoda, and people will stop accepting your pounds because they have no idea whether they'll be worth anything in 2 weeks time. If you're the US you can get away with a certain amount of inflation because people have to accept your dollars to buy oil, since oil is sold in dollars. There is then, something intrinsic that supports the value of the dollar. American warships in the gulf, and patsies in the caucuses. They can simply keep printing money because people need dollars for oil, and they need oil to live.
But the pound is underpinned by nothing more than our good name (waning), and previous form (tottering). So, in the last few decades Inflation has become the main focus of economic policy. Attempts are made to stop people getting more pounds, in order to pay for the more expensive imported goods. In other words, we are trying to underpin the value of our currency with the promise of fiscal prudence. You can rely on the value of the pound, because we don't do inflation. (doh!). The result is that our standard of living falls as the value of the pound falls, and rises with the value of the pound. This makes debt in modern Britain a serious business. The period of buying a house for £1500 and selling it 30 years later for 200,000 is gone. This would be good, if it meant that a pint of beer costs the same now as it does in 30 years time, you could invest and save wisely. Unless of course all your banks are unreliable, and your pensions schemes don't collapse. Although the price of your house and the safety of your savings is likely not to bother you much if you're killed fighting the Russians in the Crimea in order to keep the yanks in burgers.
Sorry I meant a lot of expenditure is via the tax system. e.g. much education and health, the cost of which won't go down. (Government spending and tax take will increase if anything.). Much of the stuff we buy (electonics, cars, toys, clothing) is imported goods.
Sorry I was writing what I was thinking. Expenditure like new carpets, bathrooms, extensions can often be deferred, or you can make your car last 5 years instead of 3, or 8 instead of 5. Also furniture and carpets are often bought after moving house, and there is less of that now. Expenditure on children cannot be deferred, e.g. they need new shoes regularly. So perhaps the governement should encourage population growth by birth (not immigration). Didn't the last so called baby boom come from 1950s austerity, and lead to growth in the
1960's until 1973?Unfortunately the government encourages the wrong type of people to have children (poor by benefits and tax credits etc.) It should do something like increase the 40% tax threshold by GBP 20K for every child under 18.
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Imigrants can always be brought in to work at the minimum wage. The world is not short of people. Also jobs can be exported. The only good jobs will be government jobs or land ownership (like 3rd world). I heard of someone studying law to get a job as a police officer. This seems sensible to me instead of trying to get conveyancing work etc.
So will the government default on Indexed Linked Savings Certificates? They seem a good buy to me, compared the the returns on the stock market.
other currencies, logically overseas
Nobody doubts that flexibility in the labour market is a good thing. And a certain amount of laisez faire capitalism, which may result in job losses in certain sectors is again not a bad thing all told. I think the problem is that thatcherites fail to understand that at some point, some things are going to need subsidy because they are essential. You don't force a newborn baby to get a job do you? That doesn't mean that when the child is 30 you still have to wipe their arses either. It's about common sense, something sadly missing from libertarianism.
In a similar vein then, yes you can undercut wage inflation by bringing in immigrants. Of course this in itself is not a fix for the underlying problem, which is that inflation is a natural part of capitalist economics. It is simply a stopgap measure. It has all sorts of terrible problems. For starters, if you're not choosy about which immigrants you bring then you can end up with erosion of society, which whilst it isn't expressible in terms of pounds, I'd suggest to you is something of value. You can also get to the point where nobody actually wants to come to the country, because all there are left are low paying jobs. There's no scope for movement. The Poles and Kosovars that came here are going back home in droves. Who could blame them really. A lot of thatcherite economics is about painting over fundamental cracks in the capitalist system rather than confronting them head on.
with your pension fund. There's a chance your bank will fail taking your life savings with it. There's a chance the stock market will file wiping out the value of your portfolio. They can even make diamonds in a lab now, and gold is nowhere near as rare as they say. You tell me what to do .. I have no idea. What I do know is that I'd like to meet the person who agreed it was ok to skim pension funds.
t other currencies, logically overseas
I just read that the fiscal rules are being relaxed.
Apparently the pound and euro are going up against the dollar now. The highest two day rise for some time. Although who knows how long it will last.
nst other currencies, logically overseas
They're only following what the Americans are doing.. How do you feel about that?
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