Another month of pretty much on target inflation in the UK...
Next step, sado-monetarists' bingo on why rates are unlikely to fall (yet):
a) still to early to say low inflation trend will continue;
b) some elements (services for instance) well above target rate;
c) shouldn't change ahead of a budget;
d) waiting to see how US-Fed plays it (see earlier post);
e) We need to see more pay restaint(s) first - citing Doctors' deal, perhaps?
f) permutations of some of the above.
@ChrisMayLA6 Since no individual or small group of individuals can ever get the whole picture of the market, the setting of the interest rates by a few magicians is doomed to always be wrong.
I think an artificially controlled interest rate is doomed to fail and will always harm the economy in the long run.
Only the market, all of us in aggregate, is able to correctly price money.
Well, of course, when only the 'market' prices currency you get the volatility - see current experiment in the crypto market - moreover, like markets themselves, there is not 'natural' money without regulation - lie property it is a figment of legal instruments mobilised by the state, which brings us back to our exchange a few days ago....
Certainly, as in the bond market, there are 'auctions' to establish yield but these are (as you would expect) in a highly controlled environment.
I think that moving over to auctions, even though they are done in a controlled environment, would be way better than the current "fiat" currency policy which a bunch of men just decide.
Economics is not natural science, which shows when it gets off the rails such as in keynesian economics, the soviet union, or any other nr of fashions such as the "green" economy and other politically directed policies.
A fun example is Northvolt in sweden, a huge battery factory that was
@ChrisMayLA6 supposed to be the new green wonder of sweden. Now it's on the verge of collapse, and a beautiful example of what happens when politics tries to steer the market, instead of just letting the market run things.
Another example is Hybrit green steel, which is another "green knight" politically driven, with the aim of producing carbon free steel.
The problem? ...
It will require swedens total electricity output in order to produce it and neigher power generation nor distribution
@ChrisMayLA6 is up to the task.
All natural scientists and engineers I know are just popping the popcorn watching the disaster unfold. ;)
Yes, we're seeing similar issues round the switch to green smelting here - and also the dependence on recycled steel sources
@ChrisMayLA6 I'm sad to hear it. =( I always thought the UK to be more rational than sweden.
Maybe we are missing each other bad sides in international media? ;)
After Brexit, here's few who would argue that rationality in the the UK was evident to any great degree
What I don't understand with brexit is that surely the logic must have been that the UK could then be free to deregulate the economy, shake off EU administration, create a tax haven to attract capital and business from the EU. I mean, if not, then why not just stay in the EU who is the opposite of all that?
And what happens?
Nothing, then more nothing, then a few political steps in every possible direction and then more nothing.
So basically, it seems to me that with the
@ChrisMayLA6 current policy you ended up with all the bad thing that EU brought with it, with _nothing_ of the good thing.
So only the bad.
Of course thing will go south.
My theory now is that the current socialist government will further trash the economy and country, and after 4 difficult years with recession and pain, either that nationalist guy will promise the world, and win, or someone will raise the question of going back the the EU.
Ha ha, well here we have the distorting effect of news coverage.... although called the Labour Party, we have nothing like a socialist Govt.; at best reformist centrist, at worst, as many fear, just a centre right Govt masquerading as something a bit different from the last lot.... its a long, long time since the Labour party even approached something we might agree on calling socialism....
On Brexit; no logic - driven by a rich cabal fearing EU scrutiny of their 'tax planning'!
@ChrisMayLA6 Ahh, thank you for that nugget. I thought that labour meant, you know, labour, socialist, but apparently it is similar to the swedish conservative party, who is mostly centrist, except when it comes to immigration where their supporting partner, the sweden democrats, has nudged them towards the right in return for supporting their government.
Yes the name & the policies although not completely detached are no longer (if ever) as close as one might imagine
@ChrisMayLA6 My favourite example is "liberal" which I think has been butchered completely the past 200 years, forcing people to create the word "libertarian" to describe themselves, since liberal no longer has any meaning.
The same is happening in a lot of Europe though not in quite the same way. There's a lot of elections people never would have expected to go a certain way 10 years ago, such as the rise of Marine La Pen in France, AfD in Germany, or Giorgia Meloni's party in Italy. Outside of Europe, we're seeing more like this -- Trump is facing a second term, Milei won in Argentina, and in my home of Soviet Canuckistan the 'far right' Peoples Party of Canada got 5% of the vote in the last election, which was part of the catalyst for the new leader of the conservatives Pierre Poilievre, whose revitalized party is on track to win a massive majority in the next election.
A lot of what is being "conserved" by many of these conservatives is classical liberalism -- they're promising to push back against the left wing parties overreach in areas such as censorship and overwhelming government spending and regulation, but there's also pushback against a lot of the consensus liberal ideas -- why exactly does a little island like the UK have to take on all the world's problems when Bill from da norf is struggling?
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I agree 100%. I think the reason for AfD & Co is that the mainstream politicians have stopped listening to the people. So even though people might just want low taxes and jobs, they have no other option than AfD to "punish" the mainstream politicians.
The EU seems to be dead set on committing green suicide and if that continues, the starving masses will continue their exodus to the political extremes, and eventually we have a new Stalin somewhere.
Yup, so many terms which once meant something have been degraded (though over/miss-use) - I also really don't like Neoliberal, which nowadays juts seems to mean, anything that looks like an economic theory that I don't like....