If it looks like a pig, snorts like a pig and stinks like a pig, then it's a pig.

Sterling's death warrant was signed today.

This is 100% correct, guaranteed.

http://news.bbc.co.uk/2/hi/business/7094262.stm
Last Updated: Wednesday, 14 November 2007, 12:24 GMT

The Bank of England has turned much more gloomy in its latest forecast for the UK economy - in a clear sign that damage from the US sub-prime crisis will not be contained just to North America.

In its first report since the August credit crunch, the Bank says it expects a sharp slowdown in UK domestic growth in the next year - and higher inflation as well.

It hopes that further rate cuts, and a fall in the value of the pound, which could boost exports, may bring UK growth back up to its long-run average by 2009.

But it is worried about maintaining its credibility as an inflation-fighter, with inflation expectations not changing despite higher price growth expected over the next year.

Mervyn King, the Bank's governor, warned that there was a high degree of uncertainty in their forecast this time, and that most of the risks to the economy were that things might get worse.

The governor refused to call the situation stagflation, which is the combinaton of a recession and high inflation, saying things were much worse in the l970s when rising oil prices and spiralling government spending pushed the UK economy deep into recession.

Nice bit of irony from King there. Or is it sarcasm?

Hold on...wasn't it a 100% guaranteed hyperinflationary depression / mega recession?

Is it now S T A G F L A T I O N, 100% guaranteed?

What will you 100% guarantee next?

Can I have my money back now?

Ask Adam Applegarth.

Is that who cgnao is?

Explains a lot!

The best Sterling can hope for is a slow decline and not an abrupt fall. However, sterling has a nasty way of correcting.

Look for parity with Euro, and cable to be around 1.70 in coming months. A loaf a bread around 3 quid and a liter of petrol around 1.25.

THE MUSIC HAS STOPPED!

So now the bank of englands remit is to boost exports?

I thought they were trying to keep inflation at 2% or summat.

What is it that they are trying to fooking do?

The remit of the BoE is to keep the bankers in power at any cost - social, financial, political.

100% correct..etc

From
http://en.wikipedia.org/wiki/Stagflation

"Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession. "


"Out of control price inflation". whats the definition of hyperinflation again?

*looks it up*..

from http://en.wikipedia.org/wiki/Hyperinflation

In economics, hyperinflation is inflation that is "out of control," a condition in which prices increase rapidly as a currency loses its value. No precise definition of hyperinflation is universally accepted. One simple definition requires a monthly inflation rate of 20 or 30% or more. In informal usage the term is often applied to much lower rates.

Oh. .Out of control price inflation.. hold on.. THATS THE SAME!

with bread @ £3 a loaf, god knows how much those prepacked sarnies are going to be - £6-£8 course if they drop of the CPI, then everything will be OK

1) Stagflation = high inflation + recession
We are there already (actually we've been for quite a while)

2) Hyperinflationary collapse = extremely high inflation + economic depression
The current stagflation has just started morphing into this.

This is 100% correct, guaranteed.

Oh yeah...thanks for doing my research for me. He's still a girl's blouse though

Edit: actually, no - I was right - stagnation is not the same as a depression / end of the wold recession that cgnao has been trumpeting. So take it back and apologise...!

The problem with being a sensationalist is that you are limited to sensationalising whatever the story of the day happens to be.

I'm opening an Euro account on Saturday.

that's 100% correct, Guaranteed.

It says this on their website - although it is worded differently.

The 2% inflation comes from gold. The increase in Gold every year is about 2% - so fiat paper around the world tries to emulate the increase in gold supply.

This gives fiat credibility. The interest you get from paper money is to keep your money in the financial system and not hoard it elsewhere.

As you can see. The 2% inflation is a joke and faith in the financial system has been rocked - which the financial system is not adequately compensating for.

As interest rates lower look for holders of sterling to abandon ship.

Now... is it just me, or does that just BEG to be quantified?

Exactly _how_ much worse was it in the 1970s?

Where could we get hold of this sort of information?

It took me over a month to get mine opened, during which time the exchange rate dropped from 1.51 to 1.49 .

hyperbole

/hiperbli/

• noun deliberate exaggeration, not meant to be taken literally

I'm opening one tomorrow just so my eggs are'nt all in one basket.

that's 1000% correct, guaranteed.

This is the plan.

Get the sheeple to beg for the Euro so the government doesn't have to force it on you.

I would stay out of Euros. The Euro is dropping against Gold.

The story is only one. We have been in a stagflation for a while, central banks have lost control of money supply and interest rates while trying to fight it, the banking system is as a result insolvent and nothing can be done to fix it. I have been consistently warning about this for a long time.

The problem with being an idiot like you are is that it is incurable.

OT question for those who are saving in Euro: what account to go for?

Cheers

*tries incredibly hard to get his words right, accutely aware that forum posts can appear both incredibly aggressive and defensive*..

Stagflation isn't the same as stagnation. I dont think cgnao argues it is. Stagflation is however a hyperinflationairy recession, which is exactly the doomsday scenario cgnao is warning about.

terminal, incurable, idiocy

I would argue we have been in a period of stagflation since 2002.

The growth figures we have been fed were based on credit expansion. If you remove the credit expansion from the figures you will get negative growth or a recession. That is the STAG part the FLATION part is everywhere, no need to explain that.

Now the credit has been removed the situation will get much worse as growth is exposed for what it is.

Thank God we had Gordon Brown as chancellor to shield us all from this disaster

I thought stagflation was the increase in the cost of stag parties.

That's a rather inflationary guarantee.

Whichever, I see staglation as relatively mild on both fronts. Would you say Zimbabwe has stagflation or a hyperinflationary recession / collapse?

Let me tell you something Mr King. If you don't get the pound under $2 pretty fast, you'll have far worse problems on your hands, and it won't matter a damn about 2009, you will be thinking more of a recovery plan for 2050.

I would suggest the USD/GBP needs to be about 1.9 for people exporting to USD countries to stand a chance.

Yes, we've been in stagflation ever since the rates were dropped to 1% post tech bubble collapse and 911. I however, do not believe that credit is being wholesale removed from the system. Sure, there's a credit crunch on interbank lending and subprime, but we are now entering an altogether, much more dangerous stage. We are now entering the phase of DEBT MONETISATION.

This is where the Central Banks of the world start bailing out the Financial sector by
1) becoming the buyer of last resort of toxic debt and bad collateral, using printed money (lets not say lender, because the chances of getting the money paid back is...?).
We've seen this with Northern Rock already:
http://www.guardian.co.uk/business/2007/no...nglandgovernor1
- Not a penny of interest so far recieved, and looking unlikely we will ever see it.
2) Holding interest rates artifically lower than the market would otherwise have them, and the only way they can achieve this is to provide the liquidity into the system themselves by, you guessed it, printing money.
This is why we will not now see a sudden contraction of money supply growth, quite the opposite. If central banks were to put a halt to money supply growth EVERYTHING would collapse overnight. They've made it more than clear that they will not allow this to happen.

No, it is the state of sexual arousal which occurs at stag parties held in lap-dancing establishments.

Things inflate but there is no real fulfilment or payoff.

Do we export *anything* to the USA - except, of course, credit derivative trading services?

http://en.wikipedia.org/wiki/Stagflation

hmm. CPI 2.1% per annum, or just 0.1% above target. RPI 4.2%.

I hope you will excuse those of us that lived through the seventies from quietly sniggering at you. In August 1975 inflation hit 26.9%. That was heading towards out of control, but somehow we survived. To believe that 2% or even 4% is out of control is beyond silly.

http://today.reuters.co.uk/news/articleinv...RLING-CLOSE.XML


UK trend GDP growth is somewhere between 2.0% and 2.5%, 3.3% is worryingly high, and POTENTIALLY (but not yet) inflationary.

3.3% is most certainly NOT "slow-to-no output growth".

As the housing market starts to fall flat on it's face, we are certainly at a turning point, which makes financial policy particularly difficult. Currently the BoE, eminently sensibly, are sitting on their hands, and holding IR's.

A housing crash will be profoundly and painfully disinflationary, and will almost certainly cause GDP growth and inflation to drop.

Once that happens, but hopefully (unlike 2005) not before, I hope the BoE will cut IR's to drop the pound and prime the economy.

If the BoE cuts IR's while either GDP or inflation is still above trend, then yes that would be very foolish, and might eventually lead to runaway inflation, re-increased IR's, stalled growth, and finally stagflation.

Currently, although I think things will shortly get worse as the consumer boom ends; with above trend GDP, historically low inflation and unemployment, we have yet to leave the goldilocks era.

what's the differnece?

[oops... point already made]

This is important. Note taken, thanks.

I refer the honourable gentleperson to the argument I had earlier. Which I won quite clearly.

I have been wondering about this. On another thread Nationwide International Euro account was suggested
www.nationwideinternational.com Personally I find this Euro Savings account interest rate to be bit too low (2.6%).
BTW The exchange rate for sterling was quoted me as being the days spot rate with no commission charge. Dunno if it works the same the other way. Euro to sterling, I should have asked.

Are you being funny? What do you think stagflation means?

It's like someone saying "I thought you said we'd all get the sack and now your saying we'll be fired make your mind up"

I would not consider stagflation to imply hyperinflation as most admit stagflation in the 1970s, but I've never heard it being referred to as a hyperinflation.

the thing is, under a period of high inflation the best thing to do is to buy a house.

assets and commodities hold their value, whilst money does not. under high inflation the debt of your mortgage will get wiped out, whereas physical asset values will increase.

I'd say Zimbabwe are suffering from a hyperinflationary recession.

I suppose you could say they're suffering from a rather bad bout of stagflation.

the other thing is, under a period of credit crunch, even if they wanted, people wouldn't be able to buy it at inflated prices.

I'm still trying to figure out the motivation/interest of the non-UK residents in using this site to push their PMs agenda......beyond the obvious of course.....

I already had an account with Fidelity (.co.uk) and bought some Euros and Swissies a few weeks back and at regular intervals since.

You get the price the same day (although around 5.30pm I think).

However, I already had an online ISA account from way back (long since cashed in at completely the wrong time, but we needed the money) so I don't know what their Money Laundering rules are and how much ID they now require to open an account, which is presumably why it takes so long normally.

I ought to point out I used to work for them, which is why I know about it, but have no connections now and certainly don't get any sort of commission.

I am assuming that as they aren't really a bank they are quite safe, but of course they probably put that money into bank accounts...

I suppose it depends when you consider inflation to be high, and when very high inflation is considered hyper.
The 70s really was a period of high inflation but could it be considered hyper? Many products had to be repriced monthly and at the height in the mid 70s even weekly. Officially inflation was around 20 to 25% during the period but seemed higher. Inflationary cycles seem very easy to get into but very difficult and very painful to get out of.
I have found more price increases over the last 2 months (last few weeks in particular) than the last 10 years in total, in fact many things had previously gone down. The inflationary pressures that have been building up for several years will at some point manifest itself into price increases and it looks as if theres a lot of pressure to be converted.

Look to the east for the true picture on inflation that excludes asset only inflation.

Nationwide looks good...

Assets are most definitely better than cash, but only to an extent when it comes to houses. Nominal values of houses doesn't respond to rapid inflation as much as, say, stocks or commodities do. Because of the parabolic nature of inflation, and laws regarding rents, one cannot increase rent fast and often enough to cover for the lost value of the currency. So in this sense, you could almost consider houses more similar to fixed-income investments that tend to do relatively poorly in a hyperinflationary scenario. Unfortunately, for the most of us here, who are probably also on fixed income, we would be pretty much wiped out, as we too live off essentially static wages. Unless you have enough wealth already to live off the yield of your investments, or profits of business, there is very little you can truly do to protect yourselves. Even Gold won't save us, I'm afraid, ..although every bit helps..

A&L looks better: paying 3.86% Gross:

http://www.alil.co.im/offshore-euro-us-dol...ngs.aspx?bhcp=1



I feel pretty certain that sterling will be the sacrificial lamb.

CG

Nothing that we discuss is 100% correct, guaranteed