Stuff That Interests Me

Here’s something to contemplate this Sunday morning: where are rates going?In many ways it’s the most important question in finance - the biggest question in investing: what is the future price of money going to be?Policy makers are caught between a very big rock and a very hard place. Official UK inflation stands at 8.5%. It’s higher if you use the traditional RPI as a measure. But real inflation is much higher still. Official measures only look at the price of goods and services, which are mostly prone to the deflationary forces of increased productivity. If you include things like house prices and financial assets inflation is much, much higher - over 10%. The same argument applies pretty much everywhere across the developed world.Looked at another way, money is losing value at over 10% per year. The same salary in a year’s time will effectively be 10% lower in that it will buy you 10% less . The purchasing power of your savings will be 10% lower. The already extraordinarily la