Producer inflation shocker

onebrickshort said:
Oooh They would. But they're just *****footing around.
Rather like giving you three thumps in the arm rather than a kick in the head
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They cant - the economy would fail with such a massive move on interest rates. The slow pain method balances consumers AND investors' interests...
 
DJStealth said:
They cant - the economy would fail with such a massive move on interest rates. The slow pain method balances consumers AND investors' interests...
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Not necessarily. Such weak actions as the last small increase leave inflation expectations high and these inflation expectations can then carry through to wage increase negotiations, raising the cost of labour to businesses and causing an inflationary spiral (this is especially bad as it might not be entirely necessary, the spike increase in food prices component is likely to drop off and out of Y/Y comparisons within a year leaving us with somewhat lower actual inflation than expected, plus the speculative component of the oil price may drop too). To some degree this 'spiral' effect is already happening. An aggressive interest rate increase would help temper inflation expectations and help prevent a wage/inflation spiral, even though it may push us (further?) into recession, it'll probably hurt more in the short term but be better for us in the long term. Higher rates would send a signal to investors that we're serious about tackling inflation, which is actually good for investors. Problem is whether by inflation or by higher interest rates, we're all getting hurt. At least higher interest rates help curb more luxury spending than it curbs spending by the poor, while higher inflation screws the poor too. I think the interest rate should have been made higher already. But I don't actually really know what I'm talking about.
 
Turtle said:
Not necessarily. Such weak actions as the last small increase leave inflation expectations high and these inflation expectations can then carry through to wage increase negotiations, raising the cost of labour to businesses and causing an inflationary spiral (this is especially bad as it might not be entirely necessary, the spike increase in food prices component is likely to drop off and out of Y/Y comparisons within a year leaving us with somewhat lower actual inflation than expected, plus the speculative component of the oil price may drop too). To some degree this 'spiral' effect is already happening. An aggressive interest rate increase would help temper inflation expectations and help prevent a wage/inflation spiral, even though it may push us (further?) into recession, it'll probably hurt more in the short term but be better for us in the long term. Higher rates would send a signal to investors that we're serious about tackling inflation, which is actually good for investors. Problem is whether by inflation or by higher interest rates, we're all getting hurt. At least higher interest rates help curb more luxury spending than it curbs spending by the poor, while higher inflation screws the poor too. I think the interest rate should have been made higher already. But I don't actually really know what I'm talking about.
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I dont dispute a more aggressive approach, in fact I advocated it in one of the previous threads. But answer me one thing - 3% :confused:;)
 
Turtle said:
Not necessarily. Such weak actions as the last small increase leave inflation expectations high and these inflation expectations can then carry through to wage increase negotiations, raising the cost of labour to businesses and causing an inflationary spiral (this is especially bad as it might not be entirely necessary, the spike increase in food prices component is likely to drop off and out of Y/Y comparisons within a year leaving us with somewhat lower actual inflation than expected, plus the speculative component of the oil price may drop too). To some degree this 'spiral' effect is already happening. An aggressive interest rate increase would help temper inflation expectations and help prevent a wage/inflation spiral, even though it may push us (further?) into recession, it'll probably hurt more in the short term but be better for us in the long term. Higher rates would send a signal to investors that we're serious about tackling inflation, which is actually good for investors. Problem is whether by inflation or by higher interest rates, we're all getting hurt. At least higher interest rates help curb more luxury spending than it curbs spending by the poor, while higher inflation screws the poor too. I think the interest rate should have been made higher already.
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+1

The SA economy and consumer needs a shock / shock treatment. Only way that things will work out. Hence, my wish for a 3% increase! :cool:
 
Fudzy said:
Well at least those who believe adverts are :D

http://www.snopes.com/critters/wild/frogboil.asp
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Not necessarily just them. ;)

The story's origins are rooted in nineteenth-century physiological literature. An article co-written by G. Stanley Hall from 1887 indicates that many experiments were performed on frogs in the 1870s and 1880s for the purposes of determining how reactive their nervous systems were to various types of stimuli, with temperature change being one of these.[8] One source from 1897 lists an experiment done in 1882 at Johns Hopkins as evidence that "a live frog can actually be boiled without a movement if the water is heated slowly enough; in one experiment the temperature was raised at a rate of 0.002°C. per second, and the frog was found dead at the end of 2½ hours without having moved."[9]

The story has been challenged by one or more recent experiments.[10] However, in these experiments, the temperature was increased at a rate of 2°F. per minute (or 0.019°C. per second), which is almost 10 times faster than the rate of temperature increase in the 1882 experiments.

Professor Doug Melton, Harvard University Biology Department, says, "If you put a frog in boiling water, it won't jump out. It will die. If you put it in cold water, it will jump before it gets hot -- they don't sit still for you."[11]

Frog boiling could be sped up without the frog noticing by using the Weber–Fechner law; increasing the temperature by a fixed ratio rather than fixed steps[citation needed].
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Fudzy said:
Well at least those who believe adverts are :D
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Adverts? What has the frog metaphor got to do with adverts?

Regardless of its veracity, the frog in boiling water idea remains just as useful a metaphor. (And of course it always was metaphorical, unless you thought anyone really was trying to claim that we are literally frogs.) Or are you really stating that the metaphorical application is invalidated if the underlying story is false? That's absurd. That means we must throw all fables out.
 
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Turtle said:
Adverts? What has the frog metaphor got to do with adverts?

Regardless of its veracity, the frog in boiling water idea remains just as useful a metaphor. (And of course it always was metaphorical, unless you thought anyone really was trying to claim that we are literally frogs.) Or are you really stating that the metaphorical application is invalidated if the underlying story is false? That's absurd.
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Yeah - the "story" is allegorical.

May as well claim that people who think rich people are not happy do not exist because their is no way a wolf will want to eat grapes.
 
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