Are we heading for deflation? Are we heading for deflation?
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    Default Are we heading for deflation?

    deflation?

    discuss
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    yes

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    Wherelse? If the real inflation figure is +5 or 6 over the government figure, then as the government figure heads towards zero, the real inflation figure will go negative. Which is deflation. Unless, of course I'm missing something.

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    Quote Originally Posted by Purple Dalek View Post
    Wherelse? If the real inflation figure is +5 or 6 over the government figure, then as the government figure heads towards zero, the real inflation figure will go negative. Which is deflation. Unless, of course I'm missing something.
    ... remain +5 or 6 over the government figure?

    Plank.

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    If house prices were included in the inflation index, would we not already be well deflated?

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    Quote Originally Posted by expat View Post
    ... remain +5 or 6 over the government figure?

    Plank.
    I was thinking more of the government figure being a fiddled version of the real. Now as a small amount of inflation is thought to be good, then the government will fiddle the figures to show a small amount, but the reality will be that one can consider the government figure as more a bias point on an amplifier and the real figure swings around it, as the government figure approaches zero, then the swings will go negative.

    Another way is that as the government figure is ramping down the real figure has a steeper gradient and will go passed.

    Or something like that.

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    Default Govt Figures

    Well when we have runaway inflation govt says its 2-3%

    So I reckon the will say inflation has "stabilised" thanks to GB's intervention at about 1,5 - 2%

    Which will mean it will be about -2% .

    Cue the birth of more obfusticative terms eg

    "reinflation" - really deflation but not real deflation becuase steps have been taken blah blah....

    "subinflation" - below par inflation, definately not deflation because steps have been taken blah blah... but could however be a negative number.

    To be honest , I dont care. We live global lives so my main concern is the devaluation of the £ and I am taking steps to hedge myself against that.

    Theoretically its all relative so if you earn less you need to spend less. Some people will beat the curve some wont.
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