Friday, January 02, 2009

The pound has lost a third of it's value.

We are in for some very serious stagflation in my view as the gains made to our economic efficiency in the Thatcher Major years are unpicked with ease by Brown.

As the recession knocks out competitors the survivors boost margins to protect gross income; the opposite of what people are saying will happen (ie that greater competition will keep prices low).

I sometimes wonder if people have forgotten the 1970's. If there are less shops to buy things from, prices *rise*.

And the situation is made much worse by the pound losing a third of it's value against most other world currencies (and not simply the Euro and Dollar as the BBC would have you believe).

All those super cheap deals on manufactured consumer items like plasma TV's and sat nav units from China are over, and at just the point when consumers are having doubts about spending anyway.

Your car is going to cost a third more to replace, and the reasale value of the existing one has dropped by about another 40% last year so the cost to change has rocketed. Keeping your car then? servicing and repairs will skyrocket as parts costs will double - manufacturers will keep less in stock and charge you more to try and make up lost profits on new car sales.

I damaged my mobile over Christmas and all those free mobile phone offers are gone already, o2 won’t do 12 month contracts anymore, you have to sign for at least 18 months. Nearly all mobiles are imported and costs to the mobile company of providing them have gone up by 30-50%.

I can remember before Thatcher and it wasn't the socialist utopia many seem to remember (or imagine) it was. I remember 'panic buying' as a weekly occurrence, regular queues for petrol, bread - even toilet rolls were rationed at one point.


Anonymous said...

Marcus, you'd better take a look at Nick Bye's bit in the Herald on 2nd Jan.

lower prices... turning point sometime this year...recovery in share prices.

Marcus Wood said...

Thanks for your comment.

Nobody can be sure about what the economy is going to do; I am simply giving my view.

I am talking about the UK, I think he was talking about the local economy.

As it happens I do believe that Torbay might be among the least affected parts of the UK by this recession.

anyonebutthetorbaytories said...

Why would anyone take ANY notice of ANYTHING Bye says ?

Nice to see the Tories keener on internal squabbles and personalities than attending to the issues that concern residents of the bay.

Nice too to see Gordon Oliver 'explain' the rationale behind keeping the council chairman at great cost whilst social care funding gets cut. Brilliant! Don't you just love all this 'compassionate' and 'liberal' conservatism ?!

Have you had a postcard from Nick Bye ? I hope he's enjoying / enjoyed one of his regular lengthy 'holidays' funded by the council tax payer.

Most of all readers remember Marcus' unswerving support for Bye and his running of the campaign that lumbered us with that appalling man.

I see today Andrew Lansley thinks recession might be good for us. I'm sure the thousands losing there jobs each week are lining up to agree with that. Crazy party you Tories !

Anonymous said...

How can you argue that Torbay will be one of the least affected areas when some of the main people to suffer are those retired and reliant on shares (a large proortion of those living in the bay?!). Shares in RBS are now worth 90% what they were this time last year, and there are many more examples of this. Isn't it true that Torbay has an aging population with large numbers moving to the area to spend their retirement in the English Riviera? If these shares lose their value, then their savings will be wiped out - but they apparently won't be affected?