Tuesday, March 24, 2009
As we've blogged many times, our currency is being systematically debauched. Interest rates have been slashed, the printing presses are roaring, and savers are being raped.
It's all being done on the pretext of fighting the bogeyman of deflation. Deflation, we are told, will destroy our economy and leave us in Japanese-style penury.
Never mind that Japan's per capita GDP is still virtually identical to ours despite their supposed "lost decade", and despite our 15 years of unsurpassed nomoreboomnbust. And never mind that inflation is just as good as deflation at destroying economies, and that as the 70s showed, you can easily end up with inflation and recession side-by-side.
And where exactly is this much touted deflation?
We were told that it would break cover this morning in the latest inflation stats from the ONS. All morning the BBC was saying that the year-on-year RPI would go negative for the first time in 60 years.
But guess what - it hasn't. It's actually just shaded down from 0.1% in January to zero in February. And that is entirely down to the sharp fall in mortgage rates - the RPI excluding mortgage costs (RPIX) is running at 2.5% pa, up from 2.4% last month.
Worse - for our deflationary scaremongers - inflation on the CPI measure, which is the government's preferred measure, has actually increased.
Let's say that again:
INFLATION HAS INCREASED
The price of food is soaring - up 12.5% year-on-year (compared to 11.1% last month). The price of non-alcoholic beveridges is also increasing faster. Drink and tobacco are going up faster. And many imported items like clothing and footware, which have been falling in price for a long time, are now falling less fast because of the weakness of sterling.
Right across the board, inflation is accelerating. The ONS groups its CPI shopping basket into 12 major headings, and all bar one show higher annual inflation compared to last month's figures. The one exception is domestic fuel supplies, but even that can offer only the scant comfort of an inflation rate falling from 36% to 23%.
You need to remember this the next time you hear someone spouting about the dangers of deflation.
We haven't got deflation.
It's not your imagination increasing the price of your supermarket trolley.
Our clothead rulers are turning a drama into a crisis.