Fancy a bit of inflation? What does a $700bn bailout and the 6% national wage agreements have in common?

There are two types of inflation, ‘headline’ and ‘core’. Put simply headline inflation takes into account everything, petrol prices, the cost of food etc. it’s cosidered volatile (lots of up and down) and therefore is not used for economic forecasting. Core inflation however is used all the time, because it is considered more consistent and measurable.

So let’s take a look at things that might cause inflation? Well, for a start the US plan for a $700 billion bailout is going to cause inflation, the cost will effectively be $2,300 for every man woman and child alive in the USA. That is quite a consideration, and it is coming directly from tax money, the question I would have as an American would be ‘Why will I give $2,300 dollars to banks who didn’t and likely never will repay me?’, adopt an underwriting approach to it and yo would quickly give it the stamp of ‘failed application’. However, the coffer strings are not …

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