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TheCountOfNowhere

Inflation or deflation

Inflation or deflation?   

33 members have voted

  1. 1. Are we about to experience inflation or deflation?

    • Inflation
      14
    • Deflation
      10
    • No idea
      9


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55 minutes ago, spunko said:

Short term or long term?

Next couple of years

11 hours ago, sancho panza said:

you need to be more specific imho.

You coudl eb referring to credit or price.

Credit deflation can occur at the same time as price inflation see 1970's.

 

Price.

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Up - Food will go up due to supply disruptions and natural changing weather patterns affecting crop yields.

Down - TVs, phones computers, cars etc as people cut back spending

Up - Tax, council tax (this will cause up roar and will be a political problem to address.

Up - holidays. Flying to exotic destinations may become once again only for the rich.

Down - wages

Down - business rates, rents as a whole although we may see regional variations. Property values over a two year period down yet this will be regional.

My guesses for a bit of fun.

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24 minutes ago, Agent ZigZag said:

Up - Food will go up due to supply disruptions and natural changing weather patterns affecting crop yields.

Down - TVs, phones computers, cars etc as people cut back spending

Up - Tax, council tax (this will cause up roar and will be a political problem to address.

Up - holidays. Flying to exotic destinations may become once again only for the rich.

Down - wages

Down - business rates, rents as a whole although we may see regional variations. Property values over a two year period down yet this will be regional.

My guesses for a bit of fun.

And down: petrol and car prices; particularly used car pices.

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21 minutes ago, Frank Hovis said:

And down: petrol and car prices; particularly used car pices.

Interesting Frank, I'd have conversely thought used cars would go up if PCPs/credit are less easily available and there's less new metal

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This is all a bit of a nightmare for me in my job. One facet of which is predicting tender price inflation for construction projects. I can go to the RICS and their BCIS indices but their predictions are usually wrong when seen in hindsight. I'm including double underlined caveats in my latest estimates for clients!

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22 minutes ago, Loki said:

Interesting Frank, I'd have conversely thought used cars would go up if PCPs/credit are less easily available and there's less new metal

I'm going on the basis of there being an oversupply - more new metal.

The temporary shutdown is just that but there was already oversupply which was compounded by the new Chinese factories.

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Posted (edited)
12 minutes ago, Frank Hovis said:

I'm going on the basis of there being an oversupply - more new metal.

The temporary shutdown is just that but there was already oversupply which was compounded by the new Chinese factories.

You think they'll sell them cheap?  I honestly wouldn't be surprised if they shredded them straight off the storage lots, to prevent the glut in supply

Edit: My opening line look confrontational in just plain text - it isn't.

Edited by Loki

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4 minutes ago, Loki said:

You think they'll sell them cheap?  I honestly wouldn't be surprised if they shredded them straight off the storage lots, to prevent the glut in supply

Edit: My opening line look confrontational in just plain text - it isn't.

I think manufacturers and finance houses together will have to scrap cars coming off lease or finance, but this won't prevent prices of cars of all ages (except the sub-£1000 bangers) dropping through the floor.

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6 minutes ago, Loki said:

You think they'll sell them cheap?  I honestly wouldn't be surprised if they shredded them straight off the storage lots, to prevent the glut in supply

Edit: My opening line look confrontational in just plain text - it isn't.

Yes I do.  They have huge capital investment in the factories and they have to make a return on that.  Similar to how countries who have receievd $100 for a barrel of oil in the past have been still producing and selling at sub $20 recently.   If they just sit on their hands they still have to pay debt interest and car companies tend not be veyr well capitalised.  Also they don't work in co-operation; any car company reducing supply would see that gap filled by other companies.

Not that it proves my argument but that's what the two car people I follow on YouTube - Scoitty Kilmer, US and John Cadogan, Aus - are also saying.

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1 hour ago, Agent ZigZag said:

Up - holidays. Flying to exotic destinations may become once again only for the rich.

I think down, they have to get people into the habit of flying away in holiday to get the numbers up. Making it more expensive will just put people off, they need numbers for the business model to work. Remember they make a lot of money in add-ons per person,  kickbacks from resorts etc.

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Just for fun, I've dusted off the crystal ball* to make some predictions.

The current cheap oil will be a big driver of a short term drop in inflation (RPI & CPI). But, as oil prices go back up, even if just back to a 'normal' price it will be back up from an exceptionally low price.

So my guess is a blip of low inflation ~1% (12 months), followed by high inflation ~7% (12 months) followed by a long spell of highish inflation ~5%  (10 years).

I subscribe to the idea of wealth being ultimately based on fundamentals such as energy production (oil, gas, solar, wind etc) and digging stuff out of the ground. The next layer up being able to exract or divert that wealth from the countries that do the fundamentals.

 

* I don't even have a crystal ball. I'm a fraud and just making stuff up, nothing more than guesses.

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39 minutes ago, null; said:

The current cheap oil will be a big driver of a short term drop in inflation (RPI & CPI). But, as oil prices go back up, even if just back to a 'normal' price it will be back up from an exceptionally low price.

 

(US) WTI oil just dropped 35% !!!! Back to 1980s prices  !!!!!

I saw a tweet that canda oil prices went negative as they have no more storage.

The economy is not just fucked, it's totally fucked.

 

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On 20/04/2020 at 11:54, Loki said:

Interesting Frank, I'd have conversely thought used cars would go up if PCPs/credit are less easily available and there's less new metal

low emission zones will end 2nd hand car values.. anything pre 2006 should eventually be worthless as emission zones spread..

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3 minutes ago, macca said:

low emission zones will end 2nd hand car values.. anything pre 2006 should eventually be worthless as emission zones spread..

That's a good point sadly

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Posted (edited)
6 hours ago, macca said:

VW polo se £6995 in 2006

VW polo se £15.995 2020

 

inflation or cheap credit and pcp

The salesmen aren't interested in selling you a car now, the price is based on getting £200, £300 a month out of someone to rent it.  If the interest rates go down they can advertise the asking prices at crazy levels.

The low IR economy has screwed people over right royally.

 

https://www.autotrader.co.uk/classified/advert/new/202001206364461?onesearchad=New&onesearchad=Nearly New&onesearchad=Used&maximum-mileage=500&advertising-location=at_cars&sort=price-asc&year-from=2019&make=VOLKSWAGEN&radius=1500&postcode=nn15an&model=POLO&page=1

 

RRP £16,630

Price£13,846

 

As you say, you could pick these up for 6 or 7 K before the banks collapsed.

 

Edited by TheCountOfNowhere

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13 hours ago, macca said:

low emission zones will end 2nd hand car values.. anything pre 2006 should eventually be worthless as emission zones spread..

True but this might actualy slow the spread of the zones

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