Rising Inflation

[bengasman]

It seems that the money printing actions of the government are really taking effect now.
The inflation went up by 0.4% in 1 month, with at least another 1.5 added to that in januari, probably more, bringing us at a rate of between 3 and 4% at the start of the year.
With banks charging on average 3 - 4% above base rate, we can expect mortgage rates to reach 7% come spring.
A large car manufacturer increased their prices for the second time in 6 months, totaling an average of 1% per month!
Roger Bootle, one of the leading economists in the country recently said the current economic upturn is a "dead cat bounce"; it looks like he is right.

 

[Thermo]

it certainly seems weird to me. Weve had our best year ever, but im still very cautious. Work is still coming in by the bucket load. I remember the last two recessions and this is nothing like it. Certainly down this way people dont seem to be losing their jobs and they still seem to be spending.
The one thing that worries me is how many people comment about their cheaper mortgages and how much they are better off a month. You just know there has to be a sting in the tail when they start to go up and people have overstretched themselves.

 

[bengasman]

...The one thing that worries me is how many people comment about their cheaper mortgages and how much they are better off a month. You just know there has to be a sting in the tail when they start to go up and people have overstretched themselves.

That is exactly the cause of the whole mess.
Millions of people spent the paper "profit" they thought they had made, but forgot that an estate agent estimating the price of the house, and actually holding the money in your hand are 2 different things.
The same sort of fool now looks at his monthly payments for the house, and uses the surplus to finance a personal loan.

 

[cmother1]

Roger Bootle, one of the leading economists in the country recently said the current economic upturn is a "dead cat bounce"; it looks like he is right.

Does it? I've always thought that economics is the biggest pile of b*lls*it masquerading as a respectable subject that I've ever come across. As far as I'm concerned it's somewhere in the same neck of the woods as astrology. Where were all these geniuses warning us of the impending econmic collapse a couple of years ago? For every one that comes forward and says "I told you so" there are 500 who didn't have a clue. I suppose the odd one has to get lucky and get it right once in a while.
In an economic simulation done about 6 monts ago economists did indeed perform better than laymen, but not significantly better (ie. < 5% in statistical terms).
They are given a prominence that far exceeds their worth.

 

[bengasman]

Where were all these geniuses warning us of the impending econmic collapse a couple of years ago?

IMF warned Gordon Brown that the British economy was unsustainable as far back as 2003, and they are not the ones that like to rock the boat.
Paul Erdman described the possible catastrophic results of "borrowing short" whilst "lending long" in one of his books as far back as 1976.

 

[cmother1]

.... I suppose the odd one has to get lucky and get it right once in a while.

 

[Nige F]

Free Market Economy = Boom and Bust ...Simples