Smoke and Mirrors Inflation Statistics

Leading economist Simon Ward has accused The Bank of England of using “smoke and mirrors” to present official forecasts for inflation. With the annual rate of price rises currently double the official target at 4pc and showing signs it will keep rising, the Bank’s central projection that the rate should return to 2pc next year is looking like pure fantasy.

Mr. Ward, chief economist of global investment fund Henderson’s, thinks the Bank is diverting attention from a far more worrying presentation of how fast it thinks prices will rise in the future.

“Inflation-targeting has become meaningless,” he said. “The opacity of the forecasting process and scope for creative interpretation of the remit and presentational manipulation imply that there is no effective constraint on the Monetary Policy Committee’s [MPC] ‘discretion’.”

Arguing that the Bank’s most recent quarterly forecasts show its mean forecast – the mathematical average of projections – is for inflation of 2.48pc two years ahead, if interest rates do not rise he said that as the mean forecast takes account of the skew of risks, it is a useful indicator as to whether the MPC is on track.. He warned that the latest figure was “the largest positive deviation from the target since February 1998 and clearly signal the need for higher interest rates”.

Since the numbers lying behind the forecasts are only revealed a week after the report is published, Mr Ward said “the caravan had moved on by the time the numbers are published”.

Mr Ward also thinks the Bank is being disingenuous when it refers to the projected path of inflation if interest rates rise as markets expect.
That, he said, allows the doves on the MPC – the members who wants interest rates to stay low – “to take credit for market-implied tightening without ever delivering.”

For instance, when the last set of forecasts were put out in February, the mean forecast looked to be on target two years away, when market expectations were factored in. However, at the time, markets expected a rise to come in the second quarter of this year. Mr Ward said the consensus among economists is that would not now occur.

In addition to these “presentational tricks”, Mr Ward argued that MPC members can change the forecast to suit the policy they want, as the process is reliant on judgement. He thinks the Bank should put more emphasis on where inflation will be in the nearer term, such as 12 months ahead.

The Daily Stirrer’s economic expert John de Roe has been warning for over a year that inflation was running much higher than official figures showed.

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The Daily Stirrer

Eurodebt Threatens Portugal – Inflation Threatens Your Pocket

No good news this wee. Then to cap it all today we hear the latest on inflation. Oh well tht’s goodbye o our savings, pensions and lifestyles.

Meanwhile Portugal looks set to become latest eurozone member to be threatened by speculative attacks in the bond markets as borrowing costs soar

The European Central Bank (E.C.B.) has stepped in to the financial markets to buy Portuguese bonds on Thursday amid growing fears that the eurozone’s rolling crisis is about to claim its third victim.

Policymakers in Frankfurt intervened for the first time in three weeks as borrowing costs on Portugal’s debt remained at a level that proved to be unsustainable for both Greece and Ireland.

Left Bloc, one of the smaller parties in Portugal’s parliament, said on Thursday it would table a motion of no confidence in the minority socialist government.

There is a pattern emerging here. Oo – er we have a coalition government with a minority party whose members are not happy.

Roll on The New World Order.

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Drop in UK inflation Is Not Good News
The Office for National Statistics has reported a sharp fall in the Consumer Prices Index – down from 4.8 per cent in November to 4.2 per cent last month – was the sharpest drop in the annual rate since December 2008 when the UK was in recession and VAT was reduced. Government ministers and propagandists will try to talk this up as a sing that the economy is starting to recover. We should be wary however, in the current economic circumstances a drop in inflation, especially one this rapid in what is traditionally the best month of the year for retailers, is not good news …

Economic Doom: Sovereign Debt Leads To Inflation“The bond vigilantes are walking out on Greece, Spain, Portugal, the U.K. and Iceland,” “Unfortunately in the U.S., the bond-market vigilantes are not walking out.” Roubini said during a panel discussion on financial markets at the Milken Institute Global Conference in Beverly Hills, California. “The thing I worry about is the buildup of sovereign debt,” said Nouriel Roubini, a former adviser to the U.S. Treasury and IMF consultant who in August 2006 predicted a “painful” …

The Debt Threat To Our Way Of Life
Japan’s Triple A credit rating has just been downgraded, that of the USA is looking a long way short of secure.What is going on in the world of finance when economic powerhouses like these are in trouble? Is the continuing financial criis and the threatened meltdown in the bond market just a knock on effect from 2008’s problems or is something bigger going on?

Inflation Tax
Inflation is the cruellest tax, it hits the cautious, prudent and hard working, rewards the feckless, reckless and downright foolish. We have a bout of inflation under way, engineered by governments to reduce their unsdustainable levels of debt incurred in the business of buying otes to stay in power. What will be its effect on ordinary people?


Workers Hit By Wage Cuts As Prices Rise

US Says Obamanomics and Quantitative Easing Is Not To Blame For Food Prices Rising

Ben Bernanke, the head of the US Federal Reserve, yesterday rejected suggestions that the central bank’s policies of deficit spending and printing moneyt are to blame for the rise in global food prices and commodity to record highs that have contributed to political unrest in Egypt and other developing nations.

Little Nicky Machiavelli was warning of food price inflation before Obama was elected so the guys at the Federal Exchange are part right at least.

Mr Bernanke said the rapid rise in living standards in developing economies was behind the increase in food prices, rather than the Fed’s much criticized decision to embark on a second, $600bn (£371bn) round of quantitative easing (effectively printing money by buying in its own bonds). “Clearly what’s happening is not a dollar effect, it’s a growth effect,” Mr Bernanke said in a question and answer session with journalists at the National Press Club in Washington on Thursday.

Well he would say that wouldn’t he?

He is completely wrong of course. By printing money the Obama administration is deliberately trying to recuce the burden of debt their loonyoons public spending programmes have incurred. That is not working however as creditor nations are driving down the value of their currency in parallel with the sinking dollar. The net effect of this is to keep currency exchange rates fairly stable while causing prices of commodities to rocket.

The United Nations Food and Agriculture Organization (UN FAO) has warned that high prices for staple foods and essential minerals, already above levels in 2008 which sparked riots, were likely to rise further.

The FAO measures food prices from an index made up of a basket of key commodities such as wheat, milk, oil and sugar, and is widely watched by economists and politicians around the world as the first …

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Food prices are inflating

While the warmists rant about carbon and the Church of Scienceology Cult rave about climate science. there are three real and immediate problems facing us that nobody is talking about. These are overpopulation, water shortage and food price inflation. This article deals with food prices, links at the bottom lead to our posts on population and water scarcity.
Soaring wheat and other commodity costs on world markets have pushed up UK wholesale food prices at the fastest rate in two years, official figures revealed today.

Prices for foods produced in the UK were 9.8% higher last month than a year ago. This is the biggest annual increase since October 2008 figures compiled by the Office for National Statistics reported. Imported food prices climbed 4.5% on the year, the fastest rate since

Again Little Nicky Maciavelli and The Daily Stirrer was first to warn you of this. Hope you stocked up with baked beans, tinned soup and SPAM.

While the warmists rant about carbon and the Church of Scienceology Cult rave about climate science. there are three real and immediate problems facing us that nobody is talking about. These are overpopulation, water shortage and food price inflation. The article linked below deals with food prices, furtherb links at the bottom lead to Daily Stirrer posts on population and water scarcity.
The Growing Problem Of Rising Food Prices (politics)

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