Welcome to the land of stag-inflation where your be a lot poorer (but that’s what the govt wants)
Sophia
Number 741
Conspirator for: 13 years 27 weeks
Posted on: October 18, 2011 - 8:16am
The official rate of inflation has pasted the 5% mark; though the true rate of inflation is about treble that & then some. Its not as if inflation has past the 5% mark in the near past, in the late 80s the inflation rate was about 9% & of course a decade earlier it was around about 15%. Though in the past the rate of inflation might have been higher then it is now, in the past wage increases had generally kept pace with the rate of inflation & that’s currently not happening.
The current rate of inflation might only be 5% but the average household income is only rising by just over 2%. When average incomes aren’t keeping pace with inflation the upshot is there’s a substantial increase in the cost of living & there can be a serious decrease in living standards.
Wages aren’t increasing with the pace of inflation because there’s very little growth in the economy & the reason there’s smeg all growth in the economy is due to there being no consumer demand & the reason there’s no consumer demand is due the consumer having less money to spend because average incomes aren’t keeping pace with the rate of inflation.
Several weeks ago the Bank of England announced they were going to pump another £75 billion into the economy & one of the contributing factors as to why inflation is higher then wage increases is essentially due to a process known as quantitative easing. The first time I ever heard of quantitative easing I knew the consequence would be bumper inflation & wage incomes not being able to keep pace etc, because all quantitative easing happens to be is basically the printing of money 7 anytime you ramp up the printing of money it will create bumper inflation.
Inflation always will hurt those at the bottom of the income scale & of course government knows this & this is why the government will say its disappointed in another inflation rise etc. Thing is though the government might say its disappointed in another rise in inflation, but in private government won’t mind there being a hike in inflation because it devalues the currency & makes British exports more competitively priced & British debt cheaper.
The official rate of inflation has pasted the 5% mark; though the true rate of inflation is about treble that & then some. Its not as if inflation has past the 5% mark in the near past, in the late 80s the inflation rate was about 9% & of course a decade earlier it was around about 15%. Though in the past the rate of inflation might have been higher then it is now, in the past wage increases had generally kept pace with the rate of inflation & that’s currently not happening.
The current rate of inflation might only be 5% but the average household income is only rising by just over 2%. When average incomes aren’t keeping pace with inflation the upshot is there’s a substantial increase in the cost of living & there can be a serious decrease in living standards.
Wages aren’t increasing with the pace of inflation because there’s very little growth in the economy & the reason there’s smeg all growth in the economy is due to there being no consumer demand & the reason there’s no consumer demand is due the consumer having less money to spend because average incomes aren’t keeping pace with the rate of inflation.
Several weeks ago the Bank of England announced they were going to pump another £75 billion into the economy & one of the contributing factors as to why inflation is higher then wage increases is essentially due to a process known as quantitative easing. The first time I ever heard of quantitative easing I knew the consequence would be bumper inflation & wage incomes not being able to keep pace etc, because all quantitative easing happens to be is basically the printing of money 7 anytime you ramp up the printing of money it will create bumper inflation.
Inflation always will hurt those at the bottom of the income scale & of course government knows this & this is why the government will say its disappointed in another inflation rise etc. Thing is though the government might say its disappointed in another rise in inflation, but in private government won’t mind there being a hike in inflation because it devalues the currency & makes British exports more competitively priced & British debt cheaper.
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