Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” - 20th Nov 17
Trump’s Asia Strategy, Goals and Realities - 20th Nov 17
Crude Oil – General Market Link - 20th Nov 17
Bitcoin Price Blasts Through $8,000… In Zimbabwe Tops $13,500 As Mugabe Regime Crumbles - 20th Nov 17
Stock Market More Correction Ahead? - 19th Nov 17
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17

Market Oracle FREE Newsletter

Traders Workshop

New NS&I 2.2% Savings Bond Ahead of 2017 Stealth Inflation Theft of Purchasing Power

Personal_Finance / Savings Accounts Nov 24, 2016 - 06:26 PM GMT

By: Nadeem_Walayat

Personal_Finance

With my forecast for CPI inflation expected to accelerate to over 3% per annum during 2017 and RPI perhaps nudging above 4%. The chancellor Philip Hammond in his first and last Autumn statement took the time to announce a 3 year fixed rate NS&I savings bond paying 2.2% available to all over age 16 from spring 2017. Yes 'currently' with RPI at 2%, 2.2% whilst not great sounds reasonable given the desert like landscape of today's savings market. But by the time it actually goes live and becomes available to UK savers, the now near decade long trend of the stealth theft of the purchasing power of peoples earnings and savings will continue which this propaganda bond will not provide any protection against, especially since its capped at just £3k!


This illustrates a perpetual trend of the consequences of tax payer subsided sub inflation interest rates for two primarily reasons -

1. To funnel artificial profits by means of low interest rates and QE money printing into the banking crime syndicate as I have been writing of since before the financial crisis of 2008 and repeatedly since as illustrated by my following in-depth analysis of October 2013.

14 Oct 2013 - The Illusion of Freedom - Democracy, Religion, Science and Propaganda), excerpted below:

DEMOCRACY and the Illusion of Freedom

The financial crisis has given the general population a window into the reality of the system of slavery that exists in the west to the extent that the bankster elite rule the country and not the politicians who in large part are nothing more than propaganda servants in the service of their elite masters whom they hope to eventually join the ranks of on leaving office.

This is why instead of holding the bankster criminal elite to account the politicians have in action rather than rhetoric gone out if their way to protect their masters, which means in Britain no bankster's have even been charged with a crime let alone gone to prison, instead they have ALL been BAILED OUT to UNLIMITED extent by ordinary tax payers, by the SLAVES who work for the elites in their factories, offices and retail outlets.

So all that happens each time a new bankster elite fraud is revealed is that the UK Treasury and Bank of England step forward to bail out the banks with ever escalating amounts of tax payer monies all the whilst deploying mainstream media smoke and mirrors to hide the extent of the bailouts, as exampled by the mis-selling scandals with another scandal revealed virtually every other month such as PPI mis-selling and the tens of billions that will need to be paid out as compensation for the LIBOR price fixing fraud, whilst the Bank of England's brethren continue to bank billions in bonuses on the basis of fictitious taxed wage slaves funded profits.

Meanwhile the politicians play with smoke and mirrors such as alluding to the fact that the share prices of many tax payer bailed out banks are now showing a profit. What they fail to mention is that the Bank of England has stuffed the banks full of some £500 billion of free money to ensure that the stock prices would be inflated so that the Politicians can announce a small profit on for instance the £40 billion capital injection in LLoyds HBOS, that I am sure the share holdings will be sold at a deep discount to the bankster elite just as Royal Mail had recently been sold for just £1.7 billion after the companies debts and liabilities such as the pension's liability of £12 billion was dumped onto tax payers. In total the cost to the tax payers could be as high as £20 billion for a £1.7 billion return.

The Liberal Democrats betrayal of virtually everything that they stood for from student tuition fees to electoral reforms, to rail fares illustrates the degree to which virtually ALL politicians SYSTEMATICALLY LIE. The truth is that in today's western democracies politicians just cannot get elected unless they LIE.

At every election promises are made and after every election virtually NONE are kept! Because politicians primarily serve the interests of the ruling elite and the primary purpose of politics is to create a dense layer of smoke and mirrors for the elite to hide behind so as to continue to keep the slave populations as docile and as productive as possible, which is far more difficult to achieve under dictatorships which tends to result in far less productive slaves.

At this point I can imagine that many people will be arguing that countries such as Britain have the welfare state and the NHS and myriad of other state interventions that support the general population. However, that is just what all farmers do, they tend to look after their live stock! The elite want healthy baby slaves to be born and then looked after, educated upto a certain level and kept in good health so as to maximise their productive capacity in the service of the elite. But slaves who imagine that by educating themselves to a high level will allow them to gain freedom will soon find themselves saddled with increasing amounts of debt for the whole of their lives for that is how the debt based system of slavery is designed to work. For most people all that more education will achieve is an even greater amount of debt. Like wise when slaves cease to be productive they are dealt with by systematically taking away much of the wealth they may have accumulated and finally being eliminated by the NHS.

2. To erode the value of government / sterling debt, as UK debt is inexorably trending towards £2 trillion, some 90% of GDP which demands higher inflation to erode its real terms value. Which is why the government scrapped the RPI index linked savings bonds some 5 years ago!

So if the government really wanted to help savers then it would INDEX LINK the savings bonds to RPI, otherwise the bond is PURE PROGANADA that WILL NOT KEEP PACE WITH INFLATION!

This is nothing new! For I have been writing of the consequences of the money printing debt fuelled inflation mega-trend for a decade as illustrated by my January 2010 Inflation Mega-trend book (FREE DOWNLOAD), which warned of what was likely to transpire for a decade and that the only way to protect oneself against is though accumulating assets such as stocks and housing that are leveraged to the inflation mega-trend. That are just as valid today as near 7 years ago!

UK Inflation is set to soar as I covered in my earlier analysis illustrates. And so the chancellors announcement will do nothing to prevent the inevitable stealth theft of peoples hard earned savings and purchasing power of wages.

04 Jul 2016 - BrExit Implications for UK Economy, Interest Rates, Bonds, Markets, Debt & Deficit, Inflation...

Therefore both of these factors look set to drive UK CPI inflation significantly higher to above CPI 2% and very probably to spike above 3% early 2017, and RPI probably spiking above 4%. However, beyond that unless the surge in inflation triggers significant wage inflation then CPI inflation should then soon start retreat to back below 2% and the trend towards that of the inflation rate of the US at that time a year from now.

So the bottom line is that despite brexit inducing economic weakness, expect UK CPI Inflation to spike towards 3% and RPI to above 4% by early 2017, probably peaking for January 2017 data before trending lower into mid 2017

For more on the prospects for post Brexit Britain see my in depth pieces of analysis that are likely to increasingly become manifest.

Ensure you are subscribed to my always free newsletter for in-depth analysis and detailed trend forecasts as we escape the Trump delirium vortex for a few weeks at least.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2016 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 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 focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 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

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife