inflation vs deflation - again, page-9

Saturn

Yes I am referring to the news out yesterday that article and others and agree fully with your comments - hadn't checked out the REAL NEWS - ie FACTS - so thanks for the link :)

I was scratching my head b/c I know the UK quite well and not having left there too long ago from a short visit - my wallet certainly wasn't telling me "deflation".

Had to chuckle too b/c when you look at the various news stories there was this news item too:

http://www.guardian.co.uk/uk/2009/apr/22/rail-price-rises
Rail passengers to suffer price rises despite deflation

The following article probably articulates the position in the UK better :

http://www.ft.com/cms/s/0/f6a35890-2ea0-11de-b7d3-00144feabdc0.html
Inflated fears

April 21 2009 19:43

to quote:

"Although it was revealed on Tuesday that the retail prices index dropped over the past year, the country is not experiencing widespread deflation. Nor does it seem imminent....


Finally, just as inflation is a monetary phenomenon, so too is deflation. The Bank of England has started quantitative easing; it is now increasing the money supply at rates that it judges to be consistent with 5 per cent nominal output growth. This is appropriately aggressive monetary policy. Deflation is a serious risk. But, despite this week’s negative news, it is not an immediate threat."


The article also points out that thanks to the GBP falling - this will contribute to higher prices - and my comments - they are afterall a large NET importer.