As readers of this blog probably know, I’m not averse to some inflation. In fact, I think it pretty well nigh on essential that successful economies embrace some inflation, and probably a little higher than the UK has had for some time. It seems to make that this is the only way to ensure debts are repaid without too much pain, wealth is passed appropriately between generations, and that the environment in which investment will occur exists………This is good Keynesian economics – the sort we need now, and which the EU needs to embrace very quickly if the Euro is to save and the European ideal – which has prevented war for more than 60 years – is to be saved.
So private and public sector pay seems to be moving at the same rate, which is almost not at all, as inflation takes off, fed by shortages, or speculation, or both.
The absurd notion that we will have growth in this scenario looks more ridiculous by the day.
The reality is we will have increasing poverty, real falls in income, and declining demand for non-essentrial items, all of which suggest a counterbalance to inflation on core foodstuffs and essential items, paid for however by a reduction in well being, especially for the poorest in our communities.
This is the scenario where without doubt Bob Diamond’s bonus is paid for by the poorest in the UK. And that’s why action on such issues has to happen. We can do without Bob Diamond and the vast majority of what his investment banking colleagues do. But we can’t live with the poorest getting poorer in our communities. It’s tough enough already for them.
Now that we\’ve got the inflation that The Great Man called for of course it\’s terrible: and all caused by Bob Diamond;s bonus to boot.
Do note further that Ritchie is the man insisting that we should all invest in bonds for our retirement (thus losing vast chunks of our pensions to the inflation he desires to stoke) and further, that there must be vast investment in the economy through \”green quantitative easing\”…..printing more money to invest in real assets being one of the great known ways to increase inflation.
Apropos not very much I do have to admit to preferring consistent fools to inconsistent ones.