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No they’re not, don’t be silly

Households are bracing for inflation figures which economists predict will fall to their lowest level since March last year.

Households are doing no such damn thing. Households might be unhappy about suffering the inflation that has already happened and which will be measured, publicly, but they’re not braced for what has already happened.

The Office for National Statistics is expected to reveal tomorrow that the consumer prices index will drop to 8.2pc in June, down from 8.7pc, according to a Bloomberg survey.

However, core inflation is expected to remain at a 31-year high of 7.1pc.

It’s core that matters too, as Ritchie will undoubtedly fail to inform us.

12 thoughts on “No they’re not, don’t be silly”

  1. You would expect better than that in the Torygraph wouldn’t you?

    We can all breath a sigh of relief because inflation is falling, hooray.

    In reality it just means prices aren’t going up as fast as they were.

  2. Wikipedia: “The mind projection fallacy is an informal fallacy first described by physicist and Bayesian philosopher E. T. Jaynes. In a first, “positive” form, it occurs when someone thinks that the way they see the world reflects the way the world really is, going as far as assuming the real existence of imagined objects.”

    There are plenty of journalists who know little and have to assume a knowledge they don’t have in order to generate column inches or pixels.

  3. “There are plenty of journalists who know little”


    Earlier this morning I didn’t know this company existed. ManulifeReit USD (SGX: BTOU) drops 28% on covenant breach and relisting
    This is one of those things we all hope never does happen to a leveraged REIT

    Half an hour later and I’ve forgotten it all again. That’s just the way it works.

  4. This seems like a quiet place to ask an off-topic question.

    Headlines today are excited about Tata planning to open a ‘gigafactory’ in Somerset and employ 9000 people. Isn’t that just a lie? It’s Tata, so nobody knows more about sucking subsidy. How can a factory need 9000 people and still be sensible. Don’t they have machines? Automation? Isn’t this just a pile o’ money being made available for the usual suspects to dip their beaks in? Or the Indian subset of the usual suspects?

    To return to topic, doesn’t this add to inflation?

  5. Rhoda: and everybody is claiming “this will create X thousand jobs”, “that will create Y thousand jobs”. Where are all these people going to come from to do these jobs. There’s only us humans here. If 9000 are making batteries and 5000 mining lithium and 30,000 doctorin’, what’s going to be stopped being done to provide those bodies?

    One of Tim’s pertinent statments: the NHS only exists because those people aren’t digging food out of fields. This extends to all jobs. People can only do job X by not doing job Y.

  6. The Reuters coverage gives “Gigafactory to create 4,000 jobs in the country”, where “in the country” somewhat gives the game away.

    The headline number is usually ramped up to include the construction workers digging holes and pouring concrete and general stuff, and everyone else they can possibly think of, and clearly, if they weren’t building a factory in Somerset, they’d be doing else. Like filling potholes or something something skools’n’ospitals.

  7. @Mr Duck
    It’s the same with “all these jobs will be created from the installation of heat pumps.” When I had the business offered plumbing services we generally had 6 months worth of work pre-booked for that sort of operation. My partner in crime now ru8nning it reckons it’s no different now. Where are they going to find all these competent heating engineers? Retrofit is a whole other world from new build. Probably takes 5 years experience to do it properly. You need to be understand the what & the why of what some guy maybe 15 years before was installing. And quite a lot of building construction or you can be cutting through stuff that’s structurally vital. Or making a mess that’s going to cost a few thousand quid to make good.

  8. REITs. A while ago I decided we might do better with shares that paid income rather than ETCs invested in gold’n’silver. So I looked at REITs. I know bugger all about the formalities of assessing shares. All I did was ask myself whether I saw any evidence that their values had fallen enough to reflect the risk that WFH would reduce the value of their offices and delivery services would reduce the value of their shops.

    Not seeing any persuasive evidence I decided not to buy any. Maybe I could have bought some that invested in warehouses or medical property or whatever but I did worry that once the major REITs had fallen to the extent that might be justified, fear might then reduce the share price of the others too.

    Anyway my principal defined benefit pension fund is heavily invested in shops and offices so it’s probably best if we keep our pennies out of that sector. Needless to say I have no idea which sector we should invest in but am mighty tempted to construct an anti-woke portfolio. (Last time I raised this idea someone suggested that my proposed investment fields had overlooked gambling. Thanks to him it’s on my list now.)

  9. As with hte other comment. Vice.

    But the Vice Fund has performed badly. Becasue they went into gambling in a big way. And gambling has just gone through the online tech revolution which completely upended the performance of the old companies – which the Vice Fund was in.

    Baccy – Imperial say – currently yields perhaps 8%.

    This is not investment advice etc.

  10. Back in around 2004/5 or so, one of the Board members of one of the UK-listed private equity/VC trusts got arrested at a US airport, as he was transiting back to the UK, from a family holiday, I think.

    Reason for the arrest, was that the investment manager had an interest in another fund that had a holding in an internet sports betting firm.

    I spoke to one of his colleagues, who found the whole thing slightly amusing, but their broad idea was that the US gambling laws were a complete mess, and would be sorted out fairly soon-ish. Possibly.

    Did it really take that long?

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