Cost of living crisis. What crisis?

[IC1967]

After six years, wage rises match inflation. Labour's main fox shot.

http://www.bbc.co.uk/news/business-27047966

[IDM]

From the link you provided:

"However, when bonus payments are excluded from the figures, wages rose by 1.4%, still below the rate of inflation."

"Other statistics from the ONS show how inflation has eroded the value of pay over the last six years."

"While earnings rose by 8.6% since July 2008, prices rose by 16.9%."

"Although the figures suggest that people's purchasing power is now improving, it will be several years yet before real wages are back to the level they were before the financial crisis."

"The Office for Budget Responsibility (OBR) has estimated that real incomes will not return to their 2009-10 levels until 2018 at the earliest."

"And since the start of the financial crisis, real pay has fallen by a "colossal" 10%, according to Capital Economics."

Not my views, just quoting from the source you provided.  Just goes to show that the devil is in the detail, which doesn't always reflect the headline.

[RTID75]

Wish my wages had gone up 8.6% since 2008. They've gone up 2% since about 2007.

[River Don]

After six years, wage rises match inflation. Labour's main fox shot.

http://www.bbc.co.uk/news/business-27047966

You are joking, aren't you?


Official numbers wage rises barely scrape above official inflation.

The inflation stats are dodgy, for a start it doesn't take into account mortgage costs. Products like massive TVs are cheap while food is not so cheap and products like meat is expensive.

There are question marks about wage rises too. How much of that is at the top end? How much are bonuses? Yes minimum wage has gone up by 2% recently but government pushing that up is hardly indicative if a healthy economy.

We all know this 'recovery' is an artificial government planned mini boom, principally based on housing in London. Help to buy.

How is the defecit looking? How is the national debt going? How is private debt looking?

Christ, this Tory government make me sick.

[IC1967]

There is still a long way to go to repair the damage Labour wreaked on the economy. All I'm saying is that now that wages are rising faster than inflation the cost of living crisis is going to become yesterday's news. If Labour carry on banging on about it they are going to make themselves look stupid. They should be looking forwards not always backwards.

[River Don]

The only thing that really fell in price was petrol and diesel. I doubt that will continue, oil prices have hardly shifted over the year.

Labour created the entire global recession did they?

How is the economy doing in Europe, the States, China? Aren't we entwined with the world economy?

I just don't believe this 'recovery' is built on anything sound. Sorry.

[RedJ]

Just leave him to it guys. He'll get bored eventually if he stops getting bites.

I'm not sure why he keeps coming on here though considering it's fairly obvious he couldn't give a f**k about Rovers and knows absolutely nothing about football.

[BillyStubbsTears]

RD

Leave him be. He has no comprehension of the difference between an instantaneous rate and the overall absolute value. I've said times many that if you sit on your arse for 2 hours at the start of a marathon, then start sprinting like Usain Bolt, you might be the fastest person in the race at that moment, but you've got f*** all chance of winning the race.

That is what has happened to our economy over the past 4 years. We've stagnated due to Austerity. We've seen the longest depression in GDP per capita and productivity since the 1870s. We've let most of the rest of the world run away from us, whilst we wilfully beggared ourselves to the tune of something like £0.5trillion by the loss of economic growth. We then have yet another unsustainable housing boom (timed for an Election) and call it "success".

The idiocy of it is obvious to anyone who stops and thinks about it, but that immediately precludes Mick.

And that is before you factor in your comment on where the pay rises that make up the average are going. We've had 35 years (including, shamefully, the time under New Labour) in which the proceeds of GDP growth have gone disproportionately to the wealthiest 10%. I suspect that this time is no different.

Mind. Labour on 39% and 6% ahead of the Tories in tonight's poll. Looks like we've only got another 13 months of this lot.

[BillyStubbsTears]

Just leave him to it guys. He'll get bored eventually if he stops getting bites.

I'm not sure why he keeps coming on here though considering it's fairly obvious he couldn't give a f*** about Rovers and knows absolutely nothing about football.

Red. You're being harsh. He knows enough to pontificate about possession efficiency. I can't for the life of me think why every manager doesn't listen on that score.


Oh aye. I remember now. They don't listen because it's facile bullshit, that's why.

[IC1967]

Labour created the entire global recession did they?

They didn't. However they over-borrowed like there was no tomorrow and left us with our trousers well and truly down when the global recession hit. They failed to regulate the banks properly as well.

All in all things turned out much worse for us than it should have been due to their mismanagement of the economy. The Tories are putting things right but it's going to take many years. The alleged cost of living crisis that Labour keeps on banging on about was actually caused by them! How they've got the nerve to blame the Tories beggars belief.

As far as extrapolating a current alleged 6% opinion poll lead into Labour winning the next election is laughable. At this stage of the electoral cycle that is nowhere near enough. The smart money is on the Tories winning. Trust me I know what I'm talking about.

[River Don]

And if we are seeing payrises whilst productivity isn't improving... Isn't that just a pointer to yet more unwanted inflation?

[River Don]

Labour created the entire global recession did they?

They didn't. However they over-borrowed like there was no tomorrow and left us with our trousers well and truly down when the global recession hit. They failed to regulate the banks properly as well.

All in all things turned out much worse for us than it should have been due to their mismanagement of the economy. The Tories are putting things right but it's going to take many years. The alleged cost of living crisis that Labour keeps on banging on about was actually caused by them! How they've got the nerve to blame the Tories beggars belief.

As far as extrapolating a current alleged 6% opinion poll lead into Labour winning the next election is laughable. At this stage of the electoral cycle that is nowhere near enough. The smart money is on the Tories winning. Trust me I know what I'm talking about.

The biggest problem for us. The reason why we were left well and truly exposed is the massive size of our financial sector in relation to GDP. Now we are left nursing all these zombie banks.

When do you think uk interest rates will return to something like normal?

[BillyStubbsTears]

And if we are seeing payrises whilst productivity isn't improving... Isn't that just a pointer to yet more unwanted inflation?

Bingo. That's what the textbooks would tell us.

Mind, no. Can't be. We're going to be in deflation by July next year. Or is it this year, I forget now. So it looks like the economic textbooks will have to be re-written.

[IC1967]

Inflation is not going to happen anytime soon. In fact just the opposite is around the corner - deflation. The demographic time bomb is about to explode and there is nothing the BoE or government can do about it.

Secretly the BoE and government are well pissed off that inflation is falling. They've done their best to keep it high to inflate away some of our debt. Unfortunately the power of demographics is much too great for them to overcome.

The sad thing is that there is only me in the UK that is clued up enough to know what's really going on. Take my advice and pile into gold as soon as possible before it's too late.

[River Don]

Oh shut up. They have warned of deflation since 2007, it's never happened, it can't happen. No way will they see their assets devalue. Ever.

They have held interest rates at zero and printed billions, that isn't going to disappear, they have devalued the currency massively.

[BillyStubbsTears]

Deflation. That is the appreciation of the value of fiat money. So, obviously, the response to that threat is to get out of fiat money and get into gold.

f*** me, no wonder there's only Mick in the country who understands that logic.

Me, I WOULD get into gold. But I'm now bankrupt as I got into gold in 2012, last time Mick read Peter Schiff's website and told us to do that. I pawned every last copy of Razzle that I owned and put the lot on gold.

And gold has lost 33% of its value since then.

Bugger.

If only if waited and put the lot on Mick's Grand National tips...

[IC1967]

The biggest problem for us. The reason why we were left well and truly exposed is the massive size of our financial sector in relation to GDP. Now we are left nursing all these zombie banks.

When do you think uk interest rates will return to something like normal?

I totally agree about the zombie banks. They should have been allowed to go bust. We could have then got on with rebuilding a proper economy and a proper banking sector. There are also many zombie companies that should also have gone bust. We should have allowed a much deeper recession to clear out all the dead wood. Instead all this dead wood is proving to be a real drag on productivity.

I can't see interest rates returning to normal for aprox. 10 years. My best guess would be that we will be suffering from deflation by summer 2015. This will devastate the economy and mean a period of low or negative interest rates for many years.

Our birth rate is rising and provided we continue to allow uncontrolled immigration eventually the demographics will start to turn in our favour. I need to look at future projections before I know when this corner will be turned, however we are talking I would say of a period of at least 10 years.

[River Don]

Dead wood?

What is this dead wood, since most of our poductivity advances are based on automation?

We need a lot of new machines? Maybe?

But then what of the price of energy?

I have severe doubts about the viability of an economic model based on unlimited growth.

Do we really want to fill our overcrowded island ever more? And yes it is overcrowded particularly in the South East where the problems are becoming acute.

[BillyStubbsTears]

Negative interest rates. Now THERE's an idea. Do enlighten us on how that works Mick.

Why do I put my money into a bank that pays me negative interest? Why don't I just put it under the mattress and buy a f**king big stick?

[IC1967]

Me, I WOULD get into gold. But I'm now bankrupt as I got into gold in 2012, last time Mick read Peter Schiff's website and told us to do that. I pawned every last copy of Razzle that I owned and put the lot on gold.

And gold has lost 33% of its value since then.

I can see why you are financially illiterate. Any sensible investor knows that you shouldn't put absolutely every penny you've got on one asset. Even though this is what you've done you've still got 66.66% of your money as gold has only gone down by 33.33%. So how can you be bankrupt?

Just because gold has gone down in value in the short term doesn't mean it isn't going to rise considerably in the medium to long term. The fact is has gone down in the last 18 months should be seen as a buying opportunity if you had any financial nous.

Gold has gone down because the people that sold it aren't as savvy as me. Trust me. I'll be having the last laugh.

[IC1967]

Negative interest rates. Now THERE's an idea. Do enlighten us on how that works

Once again you display your financial illiteracy. It's called QE.

[River Don]

IC if you're buying gold now you must be expecting... Inflation?

[IC1967]

Dead wood?

What is this dead wood, since most of our poductivity advances are based on automation?

We need a lot of new machines? Maybe?

But then what of the price of energy?

I have severe doubts about the viability of an economic model based on unlimited growth.

There are many businesses out there that are inefficient and badly managed. They survive because they can still get hold of cheap money. They should be put out of their misery quickly. Then the better more efficient companies would have less competition and they could take up the slack in a more productive manner and our productivity would improve.

Shale gas will sort out our current energy problem but this will take years. We are in for a lot more pain over the next 10 years but eventually (providing Labour are kept out of office) I'm very optimistic for our future.

[BillyStubbsTears]

Mick

I was so certain that you were right that house prices would go down and gold prices would go up, that I re-mortgaged my house to get £150k of liquid capital and I put the lot on gold. With the plan that I could handle the increased mortgage payments for a couple of years, then I'd cash the gold in, pay off the mortgage and retire to a life of sybaritic excess.  Instead, I have lost £50k and am now unable to keep up the payments on my increased mortgage. I am about to lose my house and I've sold my kids off into private service.

Thanks a f**king million for the advice.

[River Don]

Shale gas is a short term plaster.

Ask yourself why Shell and BP are getting out of the oil business, why are they selling off their difficult plays to pay dividends. They are spending more and more just to play catch up.

The oil business is in trouble.

[IC1967]

IC if you're buying gold now you must be expecting... Inflation?

No. I'm expecting deflation for the foreseeable future. I'm buying gold on a regular basis as a hedge against all kinds of economic uncertainty. As time goes on governments are debasing their currencies with a race to the bottom ensuing. It won't be long before savvy investors realise that gold offers protection against this.

I'm also a long term investor, so unlike Billy I think it's great that gold has fallen in value recently. When I sell it will be many years into the future so the fact it's a bit cheaper now will only add to my wealth. Billy seems to want to buy at the top of the market. What a silly Billy.

[River Don]

Governments are debasing their currency? How is this different to inflation?

I'm buying gold too I might add because I think we will see inflation.

[IC1967]

I was so certain that you were right that house prices would go down and gold prices would go up, that I re-mortgaged my house to get £150k of liquid capital and I put the lot on gold. With the plan that I could handle the increased mortgage payments for a couple of years, then I'd cash the gold in, pay off the mortgage and retire to a life of sybaritic excess.  Instead, I have lost £50k and am now unable to keep up the payments on my increased mortgage. I am about to lose my house and I've sold my kids off into private service.

Thanks a f***ing million for the advice.

Like I say, you are demonstrably financially illiterate. Why didn't you use savings to buy gold? Why not consider it a long term investment? Why not downsize to an affordable house instead of letting the bank sell it off for a song? Why have kids when you clearly couldn't afford it?

You really are a silly Billy.

[BillyStubbsTears]

I just followed your advice Mick. Just your advice.

I've pauperised my family by following your advice. What should I do now?

[scaley back rover]

I am investing into traffic lights as the council love buying them