bookmark_borderMore about inflation

Readers of this blog might be aware that I think inflation is about to go up.

It seems I’m not alone any more.

Guido Fawkes today had a shocking posting revealing that the Bank of England’s own pension fund is betting on inflation going up. Please do read this! It also shows they saw the crash coming as early as 2006.

Do also read the article mentioned there by Liam Halligan, suggesting various reasons why many people want us to believe deflation rather than inflation is the problem just now, and more reasons to believe inflation is coming.

bookmark_borderTheory test



disAstra
Originally uploaded by kevin (iapetus)

I passed my theory test today!

It consisted of two parts: The actual theory questions and a hazard perception test.

The first half was quite easy, given that you can buy a CD with all the questions and answers so that it’s “just” a question of memorising all 882 of them. (I got 50 out of 50 in this part, which is why I might be sounding a bit cocky.)

However, from the perspective of giving you knowledge that you’ll actually need as a driver, I’m not entirely impressed. For instance, consider this:

The cost of your insurance may reduce if you

  1. are under 25 years old
  2. pass the driving test first time
  3. do not wear glasses
  4. take the Pass Plus scheme

Isn’t this just an ad for the Pass Plus programme?

Other questions seem to be about the English language rather than about your abilities as a driver, e.g.:

‘Tailgating’ means

  1. using the rear door of a hatchback car
  2. following another vehicle too closely
  3. reversing into a parking space
  4. driving with rear fog lights on

Yet others can be answered with a bare miminum of common sense. For instance:

    You see a car coming out from a side road in front of you. What do you do?

  1. Swerve past it and sound your horn
  2. Slow down and be ready to stop
  3. Flash your headlights and drive up close behind
  4. Accelerate past it immediately

I’m not much happier about the perception test. It’s not just because I only got 61 out of 75 in this part, but I think it’s fundamentally flawed.

They show you brief video clips of a car driving through actual traffic, and you then have to press the mouse button whenever you see a hazard.

However, there are no minus points for clicking too often (unless you really overdo it), and you’re not asked to identify the hazard, so I’m pretty sure you could just about scrape through if you just click every time you see something move.

In an ideal world, you should be sitting next to an examiner, telling them which hazards you spot and why you think they’re hazards, but even within the current system, surely it would be easy enough to make people click on the hazard itself.

bookmark_borderSpeed limits



Netherlands Speed Limits
Originally uploaded by celesteh

In all other countries I know, motorways are the fastest type of road.

The speed limit is typically 130 km/h, but it can be as low as 100 km/h in some countries, but in those countries all other roads are then often limited to 80 km/h.

I think the Dutch situation on the photo is typical for mainland Europe: 50 in built-up areas, 80 on normal roads, 100 on dual carriage-ways, and 120 on motorways.

However, the UK is really odd (official speed limits converted to km/h and rounded): 48 in built-up areas, 97 on normal roads and 113 on both dual carriage-ways and motorways.

What’s going on? What’s the point of motorways if you can drive just as fast elsewhere?

bookmark_borderRPI inflation about to rise?



Absurd Inflation
Originally uploaded by jurvetson

I predicted months ago that prices would go up, and Phyllis has now also pointed out that it’s no big surprise prices aren’t falling.

However, economists are still predicting that prices are about to fall.

I don’t understand this. CPI is way above target mainly because import prices are rising because of the fall in the value of the pound.

So far, RPI has been much lower because of lower mortgage payments.

But is this likely to continue? As far as I know, most good tracker rates were removed a year ago, and most new deals are now much worse.

This means that lots of people will be coming off their great deals over the next year.

Let’s take our mortgage as an example: A year and a half ago we got a mortgage tracking the base rate minus 0.2%. This means we’ve been experiencing constantly falling mortgage payments for the past year, thus being part of the downwards movement of the RPI measure.

At the moment, we pay a ridiculously low 0.3% – practically free money.

However, when our two-year deal expires in September, the best we’ll be able to get will probably be 3-4%.

Given that the interest rate can’t go down much further, tracker payments won’t fall any further, and the amount of people coming off good deals will add to the RPI.

So very soon the RPI will rise, and the CPI and core inflation will still be rising because of the low pound.

So why are the economists still worried about deflation?

bookmark_borderLoyalty abroad



brussels_099
Originally uploaded by saketvora

Some people seem to think that non-Labour MEPs shouldn’t criticise Gordon Brown in the European Parliament.

For instance The Economist’s Bagehot states this:

But on the other hand—and while I hate to be or seem a killjoy—I wonder whether Mr Hannan was really right to behave as he did. Whether he and we like it or not, Mr Brown is Britain’s prime minister. He was in Strasbourg to rally support for his plan to combat the downturn (and for baser personal motives, of course). Is it proper for an elected representative to ambush his national leader, on diplomatic duty as Mr Brown was, in the virulent way that Mr Hannan did? Does such a bilious public attack improve Britain’s image or its chances of achieving worthwhile international agreements? I doubt it. Wouldn’t it perhaps be better to keep this sort of thing in the family?

And Labour’s Tom Harris says this:

What was truly repugnant about his speech was the total absence of any sense of patriotism. Some Tories on the extreme right of the party share the problem of some Republicans in the States: they don’t regard the head of government to be the nation’s leader unless he or she is also a member of their little party.

Gordon Brown isn’t just Labour’s prime minister; he’s Britain’s prime minister, and for any UK politician to launch such a disgraceful, personal attack on his country’s leader — in a foreign country — is nothing short of disgraceful.

I really don’t get this. If this had happened in a truly foreign parliament, such as the US Congress, I could understand what they were getting at.

But the European Parliament is elected by all of the EU, including the UK, so it’s not a foreign parliament any more than Westminster is a foreign parliament for Scots.

As far as I can see, Daniel Hannan’s attack on Brown is no more out of order than it would be for Tom Harris, as a Scottish Labour MP, to say something similar to First Minister Alex Salmond in Westminster.

Is he suggesting Scottish politicians of all colours (including Gordon Brown) should refrain from criticising Alex Salmond when in England (including Westminster) out of a sense of patriotism?!? This simply would not make any sense.

The European Parliament is not foreign soil to Gordon Brown and Daniel Hannan, so obviously there’s no reason why the latter should keep shtum.

bookmark_borderLibel

There have been some really important articles recently about the escalating cost of libel cases in England, and the dire consequences it is having for free speech.

Please read this (hat tip: The Bright Stuff) and this!

As the latter article notes, “the cost of litigation is so high ($200,000 for starters, and $1m-plus once you get going) that they cannot afford to defend themselves. The plaintiffs often win by default, leaving their victims humiliated and massively in debt.”

It’s a disaster, pure and simple. It needs to be changed. Now.

bookmark_borderOpen-arse



Medlar
Originally uploaded by Nick Saltmarsh

As I wrote recently, we’ve now planted a medlar tree.

The medlar (“mispel” in Danish) – which is edible only after it starts to rot – is not widely known these days, but it used to be popular.

In those days, it was colloquially known as an open-arse, however, as in Romeo and Juliet:

O Romeo, that she were, O that she were

An open-arse and thou a poperin pear!

Phyllis seems to be insinuating that I shouldn’t mention our open-arse tree in front of the kids.

Doesn’t she appreciate Shakespeare?