The Lemon Fool

1nvest wrote:With inflation at 6%, you lose half your money in 11 years. The only way to outperform that is crypto. In less than 3 months alone, from firework night 2021 to 21st January 2021, it already lost half of your money

Crypto strikes me as carrying a larger regulatory risk than the alternatives.

1nvest wrote:

vand wrote:We are now seeing a squeeze in living standards as wages fail to keep up with inflation. This is why inflation has always been historically destructive to the middle classes.

Range Rover a year ago £95,000, recent £100,000 (+5.3% more expensive)
Or 72.2 ounces of gold a year ago, 71.7 ounces recently (-3.3% cheaper)
Or in FT250TR shares 5.71 shares a year ago, 5.84 shares recently (+2.1% more expensive)

Being middle class has a greater tendency towards the option to decide which 'currency' to spend. Working class are more inclined to live hand-to-mouth and be limited to only cash/wage payment currency options.

talk about taking things a little too literally..

what I mean is that inflation is broadly destructive to wealth across large swathes of the population. Look at recent examples from history - Turkey, Argentina, and of course Venezeula - countries where, not so long ago there used to be a growing middle class, - have basically been wiped out by persistent inflation that reduces everyone to below the poverty line.

Latest inflation figures released today:

CPI 6.2%

RPI 8.2%


https://www.ons.gov.uk/economy/inflationandpriceindices


Steve

just announced
5p cut in fuel duty
Should be 6p at the pumps with VAT

There goes my excuse for not cutting the grass.

pje16 wrote:just announced
5p cut in fuel duty
Should be 6p at the pumps with VAT

Helps reduce (very marginally) the inflation number, but will add to it in 12 months time as it reverses.

Source - https://www.telegraph.co.uk/news/0/matt-cartoons-march-2022/

Cheers,

Itsallaguess

Itsallaguess wrote:

Source - https://www.telegraph.co.uk/news/0/matt-cartoons-march-2022/

Cheers,

Itsallaguess

Like the first time I heard about panic-buying. I remember asking my wife if one generally goes panic-buying in jeans or is smart-casual de rigueur?

In the event, there was no need. Shops had plenty of gin, whisky and beer etc.


Steve

Amongst all the doom the way to cushion against inflation still seems to be houses and stocks.

Uk house inflation 10.4% last 12 months. Great for home owners, not so good for first time buyers.

Vwrl 9.5% last 12 months, despite ukraine correction ytd -4.3%. A peace deal in ukraine is possible even though looks unlikely right now, as soon as that happens stocks I think will bounce back to Dec 21 levels.

So if you're lucky enough to owe a house and stocks youre likely to beat inflation, long term.

As uk will always be short of houses, and stocks should outpace inflation long term.

Cash on the other hand, very bad time for cash savers. Losing money in real terms, which act as support for markets.

Adamski wrote:Amongst all the doom the way to cushion against inflation still seems to be houses and stocks.

Uk house inflation 10.4% last 12 months. Great for home owners, not so good for first time buyers.

Vwrl 9.5% last 12 months, despite ukraine correction ytd -4.3%. A peace deal in ukraine is possible even though looks unlikely right now, as soon as that happens stocks I think will bounce back to Dec 21 levels.

So if you're lucky enough to owe a house and stocks youre likely to beat inflation, long term.

As uk will always be short of houses, and stocks should outpace inflation long term.

Cash on the other hand, very bad time for cash savers. Losing money in real terms, which act as support for markets.

Great for multiple house/apartment owners, but most people own only one house. They still need somewhere to live, so I don't see the point of getting excited about the value of my house. It's only higher on paper. Actually, the ridiculous prices make me more nervous than happy. I'd prefer slower rises and a fairer and more fluid housing market any day!

Steve

Adamski wrote:.....
Cash on the other hand, very bad time for cash savers. Losing money in real terms, which act as support for markets.

Yes. Cash is now a seriously wasting asset.

April last year, I took the decision to halve my cash reserve - topping up a number of my existing holdings. Looking at the results, things have turned out a lot better than leaving the money in the bank (not difficult!).

I am now planning a further reduction. A sizeable reserve does provide an element of comfort, but .....

Published today .

CPI 7%

RPI 9%

No doubt Andrew Bailey will be on telly wringing his hands and telling us how tough things are.

scotview wrote:Published today .

CPI 7%

RPI 9%

No doubt Andrew Bailey will be on telly wringing his hands and telling us how tough things are.

And there will be further increases down the line as UK PPI is 5.2%, highest since records began in 1996. The producers costs will need to be passed on

anon155742 wrote:And there will be further increases down the line as UK PPI is 5.2%, highest since records began in 1996.

What does PPI stand for in this context?

Alaric wrote:

anon155742 wrote:And there will be further increases down the line as UK PPI is 5.2%, highest since records began in 1996.

What does PPI stand for in this context?

Producer Price Index (as opposed to Consumer ... or Retail ... )

Price rises at the producer level don't inevitably lead to that same rises at the consumer level as margins can be used to absorb input cost rises all along the supply chain. But they are usually a guide to direction and magnitude, and are a leading indicator.

dealtn wrote:
Producer Price Index (as opposed to Consumer ... or Retail ... )

Price rises at the producer level don't inevitably lead to that same rises at the consumer level as margins can be used to absorb input cost rises all along the supply chain. But they are usually a guide to direction and magnitude, and are a leading indicator.

Just out of interest, DAK if PPI calculated similarly to CPI or to RPI? That is, substitutions/geometric means etc?

I have tried Google, but not sure i have the energy to wade through this! https://www.imf.org/external/pubs/ft/ppi/2010/manual/ppi.pdf

not sure where previous poster is pulling the PPI number from, but I believe it's considerably higher than his 5.2% number
Current number according to this is 10.1% to the ONS.


https://www.ons.gov.uk/economy/inflatio ... bruary2022

vand wrote:not sure where previous poster is pulling the PPI number from, but I believe it's considerably higher than his 5.2% number
Current number according to this is 10.1% to the ONS.


https://www.ons.gov.uk/economy/inflatio ... bruary2022

No: that was the March release, giving the figure for February. April's release is now out, giving the figure to March. 11.9%.

MDW1954

dealtn wrote:

Alaric wrote:

anon155742 wrote:And there will be further increases down the line as UK PPI is 5.2%, highest since records began in 1996.

What does PPI stand for in this context?

Producer Price Index (as opposed to Consumer ... or Retail ... )

Price rises at the producer level don't inevitably lead to that same rises at the consumer level as margins can be used to absorb input cost rises all along the supply chain. But they are usually a guide to direction and magnitude, and are a leading indicator.

Yes, and 10% is quite alarming even for someone who lived through the 70s.
First, the 'margins' can be cut, then the divi, then the executive bonuses... no, now I'm being silly...

V8

88V8 wrote:First, the 'margins' can be cut, then the divi, then the executive bonuses... no, now I'm being silly...

V8

February's numbers again, but they would suggest margins are being cut:

The headline rate of output prices showed positive growth of 10.1% on the year to February 2022, up from 9.9% in January 2022.

The headline rate of input prices showed positive growth of 14.7% on the year to February 2022, up from 14.2% in January 2022.

(Apologies for double post)