Thursday, June 19, 2008

Banks and business can legitimately protect their incomes. People cannot

There’s was a spot of light-relief on the economics side of things today with the news that…

The light-hearted relief comes not from the news that UK retail sales ‘soared’ last month but from the dissonant, deceitful way the news has been covered.

The BBC wins the prize

‘Food sales rose 3.3% as people bought salads and stocked up for barbecues’

So, it’s not the Evil Chinese or the Crafty Indians to blame for all that hyperinflation, it was the lettuce all along


The implication is that ordinary people are stoking up price inflation by going out and buying more stuff

The possibility that they are buying the same amount or less stuff but are having to pay through the nose for it seems to have eluded the geniuses in the commentariat and over at the Bank of England

If the banks, as they are, create money like there’s no tomorrow, of the course the price of stuff goes up

I’ve no doubt that Zimbabwe has seen some record retail sales figures in recent years – though I doubt very much if many people there are buying plasma TVs and langoustines


There’s something very pernicious about the news media’s coverage of the price of stuff shooting up, interest rates and the language being used by the bankers and politicians describing what’s going to be done about it all

There’s a comment over at Lord Patel’s blog which sums things up pretty well...

‘Mervyn King has warned workers not to ask for pay rises which match inflation because that would trigger an inflationary spiral.

Of course, the other side of the spiral is not addressed. Prices have already risen far above inflation but this is not a problem for Mr King. After all, with the rising costs of production it is obvious that prices would rise to protect profits.

The spectre of inflation is only raised by the governor when people try and compensate for the situation they find themselves in because of higher prices. He also makes it clear that lower profits are not acceptable because he insists that prices and interest rates (over which he is supposed to exercise control) would "inevitably" rise.

Bottom line according to Mr King. Banks and business can legitimately protect their incomes. People cannot.’

And the problem for many ordinary people now is that not only are they facing steep rises in the costs of the essentials of life, the bankers are getting ready to shaft them twice over by pushing up the costs of servicing their debts as well

It’s hard enough facing what is happening if you are debt free but if you are unfortunate enough to have been suckered or forced into debt bondage, groups of unaccountable sociopaths sitting in boardrooms also get to play with your life like you are a puppet, or a serf

But remember, blame the letttuce



paul said...

Practically all the experts are deeply concerned that that bad (wage)inflation is about to return, spoiling all the good work done by good (asset price) inflation.
You just have to remember that there are good and bad variations of everything.
A good rule of thumb is that if it benefits labour, its generally a bad thing.

Anonymous said...

The serial inability(or perhaps unwillingness) of all the media and all the politicians to understand what inflation is is deeply frustrating. Inflation isn't rising prices, that's a symptom of inflation. Inflation is an increase in the amount of money in the economy and anyone who says otherwise is either ignorant or a liar.

Inflation is caused by the banks, the government and the speculators. Sadly they're probably the last 3 groups that the press or New Lab will blame, somewhere after the towelheads, lettuce and chaffinches.

The Underdoug said...

Basic economics:
Price x Volume = Value (i.e. revenue)

Basic horticulture:
Growbag (window box) + sh*tbag (compost) = That 'basket', lettuce.

Basic viticulture:
Bank with a licence to create money out of thin air = time to crack open the Moet.

This sort of thing (including cynicism about banks) was being taught at my crappy inner suburban comprehensive at CSE level, how come the Oxford PPEs (anyone with an Oxford PPE or its Cambridge equivalent should be excluded from government automatically given the past track record) don't get it? Different people with the same degree are more likely than not to have been taught by (mostly) the same tutors/lecturers over the years - errors in common sense will get perpetuated (hence my desire to eliminate PPE graduates from the levers of power).

Anonymous said...

"You just have to remember that there are good and bad variations of everything. "

Alan Partridge distinguished between good aids and bad aids. He thought that one of his guests had good aids (blood transfusion victim); whereas it transpired that he had bad aids (homosexual activities), so he kicked him off the show.

So, hurrah to good aids (inflation in the form of houses) and boo to bad aids (inflation in the form of food 'n' fuel).

Lastly, a big, knowing me knowing you, a-ha!

"anyone with an Oxford PPE or its Cambridge equivalent should be excluded from government automatically given the past track record"

I'd expand that to anyone who is Oxbridge educated should be excluded from any job whatsoever. For the reasons given by the original poster. Also, to ensure that any latent talent went elsewhere.

paul said...

Alan Partridge distinguished between good aids and bad aids.
I think it was chris morris that did that one.
As for the last days of rome style retail explosion, which has produced stern mutterings about interest rates, I am reminded of a friend who went through bankruptcy a few years ago.
"If I'd known it was that easy, I would have gone for a lot more"

Wolfie said...

Interesting you picked up on this one. The recent statements from Mr King got myself and a gaggle of analysts huddled around a desk poo-pooing and raving for about two hours the other day; the truth is we know that he knows better but what is he doing making such clearly false statements? Wage restraint will only harden and deepen the slowdown/recession with no benefit whatsoever to inflation figures. Is he worried the proletariat will "burn the banks" if they knew the truth?

There is an astonishing load of bull emanating from the backsides of both journalists as well as politicians of late and it has many of us scratching our heads because we can't put it down to stupidity and I don’t think any of you should either. Snout in the trough is generally the cause of economic blindness but there are moments when I find it hard to see who benefits beyond the genuinely spiteful.

Stef said...

re. good aids vs bad aids

it was Chris Morris but it's the same scriptwriters so AP was near enough

re. PPE and Oxbridge

A lot of people argue that it would be impossible for a small cabal of elitists to control the way an entire nation thinks

Not so difficult if your journalists, economists, politicians and senior servants are recruited almost exclusively from just two universities and vetted like fuck

re. sales figures

My understanding is that they are discounted to account for inflation - but a lot swings on what inflation figure you plug into the calculation. Anyone using the BoE figures whilst keeping a straight face needs to have their head examined or receive a stonking annual bonus

Anonymous said...

"A lot of people argue that it would be impossible for a small cabal of elitists to control the way an entire nation thinks"

They even claim have a monopoly on knowledge and intelligence. Astounding.

Anonymous said...

"Female PsyOps soldier dies in Afghanistan" link from Mindhacks. Focuses on psyops.

blobfish said...

15 (UK) PSYOG have their own web page...

“PSYOPS are planned, culturally sensitive, truthful and attributable activities directed at approved target audiences within the Joint Operational Area in order to achieve political and military objectives by influencing attitudes and behaviour.”

S said...

The follow up to Chris Morriss' Captain Brugge.

(& I think inflation is/will be going up because the BoE has given security to all the 'off-balance sheet securitisations' held by the UK banks, in order to release some credit/liquidity into the markets?)

Anonymous said...

"15 (UK) PSYOG" - interesting to think that Lord Haw-haw was hung for this sort of thing. (More so when you look at the lengths that they went to in order to legally hang him).

Stef said...

of course, the difference between Lord HH and outfits like 15 Pysog is that Haw Haw told fibs and 15 Psyog states quite clearly that it is concerned with the dissemination of Truth™

and if, in these difficult and trying times, you can't place your faith in military psywar specialists who can you trust?

Stef said...

/ checks passport expiry date

Anonymous said...

Wolfie said...

Bull (well bear maybe)!

Anonymous said...

"Analysis: criminals will go free unless ministers act on anonymity"

"Scores of trials around England and Wales appeared to be [at] risk today as the impact of a House of Lords ruling last week begins to bite."


"The truth is that the law lords ... re-stated a long-standing common law right that an accused has the right to know who his accuser is."


"In the meantime, though, if trials are not to be abandoned and a mockery made of the criminal justice system, ministers need to act – emergency legislation, in the short-term, may be the only answer."

Not a squeak, in this story or any other MSM story about the shambles. Whoever had the idea of having anonymous witnesses doesn't appear to have had the idea checked by lawyers; if he did, did he ignore their advice? If he didn't ignore their advice, who were these lawyers?

There's a cretin causing chaos in the prosecution system such that people accused of murder aren't being subject to trial because someone thought that it would be clever/convenient/easy/whatever to have unlawful trials. Who is this person? Why isn't he/she being called to account?

Instead we have these nonsense stories such as the one above.

Of course, there is the competing hypothesis that this was done purposely so that the "long-standing common law right that an accused has the right to know who his accuser is" can be taken away.

If true, quite a contemptuous manner to treat the victims of these crimes.

Anonymous said...

Fitts has posted a link to an old news clip about Nugan Hand bank.

Question is ... which bank has the baton now? As far as I can see, after Nugan Hand, the baton was passed to BCCI. Who has it now?