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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

UK Petrol Prices to Hit Record High As Stealth Inflation Rages

Personal_Finance / Inflation Mar 16, 2010 - 11:56 PM GMT

By: Nadeem_Walayat

Personal_Finance

Best Financial Markets Analysis ArticleUK Petrol prices are set to hit new record highs over the coming weeks despite Crude Oil at near half its mid 2008 peak of $150, Why ?


The current petrol price has already risen to £1.16 a litre from £1.09 a litre from the start of the year, the AA now expects this to continue rising to a record high of £1.23 a litre in a matter of weeks (existing record high is £1.19 a litre) as a consequence of scheduled fuel duty hike that looks set to add 3p to petrol prices in April, rising gasoline prices due to refining bottlenecks and the 10% fall in sterling.

Current Petrol Price Breakdown - Stealth Taxation / Inflation

Contrary to What people may imagine the petrol price per litre is far less susceptible to the market price than it is to stealth taxation / inflation as the following breakdown illustrates.

Fuel Duty = 56p

Market Petrol Supply Price = 37p

VAT = 17p

Forecourts = 6p

Petrol Price Total £1.16p

The AA has requested that the Government delay the 3p duty hike in April, given the huge budget deficit this is highly unlikely.

Rising petrol prices to new all time highs is just another manifestation of the Inflation Mega-trend, The New FREE Inflation Mega-trend Ebook that you can download right now provides over 100 pages of analysis and recommendations of how you can protect and grow your wealth.

Excerpt from the FREE Inflation Mega-trend Ebook - Page 50 (Download now)

The inflation mega-trend continues to gather momentum, fed by literally out of control budget deficits that are being monetized by the printing of money (electronically) by ALL developed countries, for example this year the UK government will issue £225 billion of debt or £3,750 per every man women and child in the country, this IS out of control borrowing that risks national bankruptcy that will manifest itself as ever higher inflation that looks set to accelerate over the coming years.

All of the developed countries are running huge budget deficits in the order of 10-15% of annual GDP which is resulting in the loss of value of all fiat currencies against which people MUST seek to protect their wealth. The huge official debt burdens of approaching and passing 100% of GDP (Real debt is many times higher than official debt) are not going to go away, the only way government's can respond to such debt is through competitive currency devaluations i.e. INFLATION.

The government's of the world have been busy writing unlimited cheque's to bailout the bankster's who they primarily serve, the only problem is ALL of the pain will be felt by ordinary tax payers and NOT the politicians, who as we saw in the UK during 2009 have been busy burrowing their snouts in the expenses troughs so as to ensure that virtually every day to day living expense is a freebie at tax payers expense whilst tax payers are about to be hit by huge taxes.

Meanwhile Deflationists continue to look to Japan as the example of what is to transpire, however all Japan has done is to set itself up for an ever bigger inflationary BUST, Japanese public debt is now over 200% of GDP, this debt will resolve into high inflation. The Japanese government's response instead of addressing inflation will be pour more petrol onto the inflationary fires and could spark HYPERINFLATION. That is where Japan is heading and we SHOULD NOT MAKE THE SAME MISTAKE. However that is what academics and journalists that delude themselves that they are economists continuously advocate i.e. Keynesian deficit spending without end.

Furthermore, low interest rates plus rising inflation amounts to THEFT FROM SAVERS and WORKERS and all existing currency holders, including bond investors, therefore the best strategy to protect ones wealth is to diversifying OUT of fiat currencies. This strategy must remain in force as long as government's continue to run budget deficits that results in more accumulated debt resulting in higher debt to GDP ratios and hence more money printing and inflation as part of a perpetual inflationary debt spiral.

People have been conditioned by politicians and the mainstream press to think that inflation is not only normal but it is good, it is NOT GOOD nor NORMAL, Inflation is a stealth tax on your savings and earnings that over time seeks to STEAL the value of all that you have accumulated during a life time of hard work which is why most pensioners in Britain retire with savings that have little real value, whereas if there were NO inflation ALL of your savings would retain the SAME value throughout your life.

Inflation is created by government's and the banking cartel by a number of means but primarily as a consequence of the fractional reserve banking system that effectively allows the banks to continuously conjure new money out of thin air that continues to erode the value of all existing money as manifested by near continuous year on year high growth in the money supply far beyond that which is necessary as a consequence of economic growth.

Furthermore whilst people are forced to link their earnings against the official inflation indices such as the CPI and RPI, the real rate of inflation is usually significantly higher due to the fact that over time successive government's have sought to raise the stealth tax on their citizens by means of manipulating the official inflation indices lower. This has been illustrated earlier in this ebook which shows that the real UK inflation rate usually tends to be between 1.5% and 3.5% above the official CPI rate.

You are reading this at the very beginning of the inflationary mega-trend that will probably culminate in an inflationary super spike many years from now, whilst many commodities have rebounded somewhat from the crash of 2008-2009, however we have yet to see the inflation mega-trend manifest itself in the various manipulated inflation indices of the world, especially as the consensus view amongst academic economists and the mainstream press is still that of DEFLATION. However once inflation manifest itself in these manipulated indices then watch as the wage price spiral kicks in and pushes fixed assets and scarce resource prices such as commodities to unimaginable heights over the coming decade.

The full implications of the unfolding Inflation Mega-Trend including forecasts trends for major markets for many years are contained within the NEW FREE Inflation Mega-trend Ebook, which includes analysis and precise forecasts for:

  • Interest Rates
  • Economy
  • Inflation
  • Gold & Silver
  • Emerging Markets
  • Stock Markets
  • Stock Market Sectors and Stocks, including ETF's
  • Natural Gas
  • Agricultural Commodities
  • House Prices
  • Currencies
  • Crude Oil

The 109 page ebook is being made available for FREE, the only requirement for which is a valid email address.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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