Wednesday, April 22, 2009

UK inflation rate falls to 17.6%

The latest M4 money supply inflation figures are out.

In a move which shocked Maturin Towers this morning, the UK inflation rate actually fell from 18.6% in February to a (provisional) 17.6%, in March, despite our prediction a month ago that it would go over 20%. And this follows the month in which quantitative easing (QE) began!


So where has all of the newly counterfeited QE money gone? The money supply is only up by £0.9 billion, at £15 pounds per person, but the Bank of England directly created approximately £25 billion from out of thin air in March, which in the fullness of time will multiply to £250 billion due to the effects of fractional reserve banking, and this doesn't even count any other open market operations shenanigans they have been playing with, or discount window lending. So where is the money?

Well, the guess from Maturin Towers is that this tsunami of cash is building up in the banks' reserves, behind a dam of fear, in the same way that the tide recedes just before a tsunami hits the shore, with all of the water sucked up into a gargantuan wave of destruction. But this cash is still there, friends, waiting to keep the bubble expanded. Have no fear of that, especially with a UK government in place which has an election in 12 months time in which to re-secure its ministerial cars and where this week's budget is the first plank in that election campaign.

Even with all their current problems, if the Burghers of Downing Street time their fiat currency deluge correctly, they could still win that election. Let's face it, they're only up against hapless Dave and gormless George.

Yes, all Gordon will need to do is to persuade enough sheeple that borrowing and spending are the routes out of the trouble caused by borrowing and spending, and he will have it in the bag, so long as this mountain of bank reserve cash can be released with exactly the right leverage.

And who controls the banks' levers, either through direct ownership or threats to ownership, after having spent half a trillion pounds on the process? Yes, step forward folks, it's Gordon Brown.

So don't rule Gordon out just yet. He is a cunning devil and he knows just how stupid people can be; after all, they did vote his party in three times previously, despite his obvious evil crookedness. Even now you'll still find some Russians praising the evil monster Stalin for his deviousness and for his iron political will.

Brown is a creature cast from the same mould as Uncle Joe Gulag and we have not seen the last of him yet, unless Guido can somehow nail Brown into the history books.

He controls the money supply, the tax system, the mainstream media, the legal system, the banks, the army, the street police, the secret police, the education system, the health system, the transport system, the energy infrastructure, and all of the other tendrils of the political power system. So I'm confident that with that little lot at his disposal, he'll do more than whimper off into the footnotes of history, just because the Daily Mail has had a bout of fickleness over him.

Expect that same newspaper to be singing his praises again in a few months time, when all of this cash is washing all over us, prior to the next stage in the depression, of course, caused by this fiat currency folly. But that may be after the next election, so who cares?

At least there do seem to be more mainstream opinions out there which will question this 'happy green shoots recovery', when it starts to bear the sick malinvested fruit of bubbleland:

=> There are just two options remaining for Labour: austerity or inflation

So let us see what Gordon gets up to with the budget, via his puppet Darling, both on its announcement, and when the real measures trickle through in supplementary papers over the next few days.

Hang onto your wallets, folks. Because they are in for a heck of a ride.

The provisional figures for April will be available here on the 21st of May, at 9:30am.

Link to February 2009 M4 Chart.

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