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Only connect, only connect

This from the man who insists that everyone should save for their pensions in bonds with a nice high interest rate of 1%:

Inflation is over 10%. It may not stay that way. It probably won’t. With luck interest rates will fall as well. But, right now these interest rates are massively negative. In reality the interest cost is not in any way making up for the fall in the value of the capital saved in government bonds. The rate is, actually, therefore, at a real massive low point.


8 thoughts on “Only connect, only connect”

  1. Haven’t Goldman (obviously neoliberals but still) just postulated inflation at 22% in Q1 of Next Year?

    That said I agree with Steve’s assessment that given the sheer scale of the issues arising at the moment and likely water shortages, power outages and possible shortage of food and basic goods at the same time, the Conservatives will be around as popular as Sir Jimmy Saville by this time next year.

  2. RSM

    I’d say either TIPS or I Series would be useful investments to a degree (At least compared to standard GILTs) at the minute. Murphy’s bonds have never been suggested to be inflation proof and indeed the whole rationale for investing was to ‘benefit society’ – that’s why the investment needs to be compelled. He’s moved away from his earlier position where private bonds would be available to invest in. Now it will only be green bonds which deliver (And are designed to deliver) negative actual returns which will be permissible under the ‘Courageous State’/ Green New Deal. I believe North Korea (closest real world example of a state following Murphean principles) has a similar scheme.

  3. @V_P

    I am sure Murphy would allow citizens luxuries. They could be encouraged to save towards owning a car with automatic deductions from their wages, the car to be built in huge state owned factories.

    Delivery dates would perhaps be a little vague but it would be a People’s-Car.

  4. Martin Near The M25

    I think certain citizens would be allowed luxuries in a Tatocracy. And he’ll make sure the model railways run on time.

  5. The creatures outside looked from potato to man, and from man to potato, and from potato to man again; but already it was impossible to say which was which.

  6. The Ukraine war, Putin’s gas export policy, Global supply chain snarl ups, China shooting itself in both feet…
    These things may turn out to be temporary. At which point the price hikes begin to drop out of the inflation index, to be replaced by cheaper stuff.

    I predict that this happy state of affairs will panic the central banks with the bogeyman of deflation and emergency measures will be enacted.

  7. Usually when the government has catastophically destroyed the economy, we kick Labour out and and elect the Conservatives to clear out the Augean stables. How do we do that now?

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