Inflation in the UK has just hit 10.1%, says the Office for National Statistics. That is five times the Bank of England’s stated target of 2%. FIVE TIMES! Sorry to shout. The joy of the public sector is that you can be this bad at your job and still keep it.
Aug 18, 2022·edited Aug 18, 2022Liked by Dominic Frisby
Looking forward to more variety again in the pod's.
Recycling the MoneyWeek articles has limited value for me. Dominic, I've read a couple of your books, would extracting an idea and expanding on it hold appeal for anyone beyond myself?
Also, you juggle an incredible number of different employment hats, could you speak to how you manage that or what your working week looks like?
Just a few ideas. Hope you enjoyed the Fringe. Was sorry I couldn't make it this year.
Aug 18, 2022·edited Aug 18, 2022Liked by Dominic Frisby
In the main I wholly agree, at least with the explanations for the causes of inflation and the short comings of both government and central bank policies. However the desirability of gold is more nebulous and unclear. It works well in panicky environments and we may well get to that soon, there is certainly plenty to worry about.
That inflation is five times the target does not mean that interest rates 'have' to rise, the MPC will be agonizing over the consequences and their history is so dismal it would be unwise to second guess their decisions. Money markets forecast base rates of 3.75% by the end of Q2 next year, I am doubtful they will act that quickly. Further the money markets expect the tightening to end then and rates to start falling soon thereafter. I am again skeptical.
There are alternative 'real' assets that are worth considering. I bought some Great Portland Estates shares today and some index linked gilts a few weeks ago. They are an inflation hedge and have come down a long way from when while inherently desirable they were just too expensive to own imo.
imo the Bank of England needs to raise interest rates to >15% before inflation and housing prices start to come down so that this massive man-made economic decline can end but the government will also need to cut spending by at least 20% of 2019 spending figures in order to stop the national debt from growing which is forcing the state-owned BoE to print so much money. But I'm not an economist so I don't know if raising interest rates to a high figure and the government cutting spending by a huge amount would help end this massive economic downturn that was largely caused by the government...
Looking forward to more variety again in the pod's.
Recycling the MoneyWeek articles has limited value for me. Dominic, I've read a couple of your books, would extracting an idea and expanding on it hold appeal for anyone beyond myself?
Also, you juggle an incredible number of different employment hats, could you speak to how you manage that or what your working week looks like?
Just a few ideas. Hope you enjoyed the Fringe. Was sorry I couldn't make it this year.
In the main I wholly agree, at least with the explanations for the causes of inflation and the short comings of both government and central bank policies. However the desirability of gold is more nebulous and unclear. It works well in panicky environments and we may well get to that soon, there is certainly plenty to worry about.
That inflation is five times the target does not mean that interest rates 'have' to rise, the MPC will be agonizing over the consequences and their history is so dismal it would be unwise to second guess their decisions. Money markets forecast base rates of 3.75% by the end of Q2 next year, I am doubtful they will act that quickly. Further the money markets expect the tightening to end then and rates to start falling soon thereafter. I am again skeptical.
There are alternative 'real' assets that are worth considering. I bought some Great Portland Estates shares today and some index linked gilts a few weeks ago. They are an inflation hedge and have come down a long way from when while inherently desirable they were just too expensive to own imo.
https://www.barchart.com/futures/quotes/J8Z22/futures-prices
imo the Bank of England needs to raise interest rates to >15% before inflation and housing prices start to come down so that this massive man-made economic decline can end but the government will also need to cut spending by at least 20% of 2019 spending figures in order to stop the national debt from growing which is forcing the state-owned BoE to print so much money. But I'm not an economist so I don't know if raising interest rates to a high figure and the government cutting spending by a huge amount would help end this massive economic downturn that was largely caused by the government...
If you had to choose between owning a house in London or keeping your money in cash (GBP) for the next 4 years, what would you choose? Thanks.
I've STILL to pull the trigger on physical gold.
Need to do some reading / research, I have ZERO experience in this field, so not wanting ripped-off etc.
If I was going for coins, I'd want them as cheap as possible - i.e. not interested in premiums for whatever is stamped on the faces.
I also quite fancied the idea of silver coins, then I heard there was a MASSIVE spread (probably dealers trying to recoup losses??? I don't know).
Lack of knowledge has held me back (also not sure I'm keen on registers - how does that work with physical gold you've taken delivery of?)