The UK money supply has been increasing between 10% and 14% every year for the last 10 years. This increase has been via lending. True inflation is the money supply less growth. Growth is typically 2-3% - therefore inflation is running around 8-10% per year.
CPI is a work of fiction - a politically expedient lie.
Stock market growth... Simply inflation.
Housing growth... Simply inflation.
Commodity increases... Simply inflation.
Money supply increasing at 10% is a doubling of the money supply every 7 years. Is there twice as many cars, computers, roads, houses, businesses as 7 years ago of course not.
If real inflation is running at 8% and your salary is not going up at 8% or more then you are loosing out.
If real inflation is running at 8% and your bank pays 6% on your savings, you are loosing out.
Its a transfer of wealth from you to the markets.
Its going on all the time - Most people dont realise so they dont mind.
Yes - Bankers have made a fortune from the liquidity boom (facilitating this inflation through lending).
Yes Bonuses encourage short-termism
But ultimately it is the government who are responsible for the control of the money
supply not bankers.
