UK input inflation
As noted here input inflation was over 15% in the UK, in the year to March 2011.
It's getting worse, the input inflation to April 2011 was 17.6%. No that's not a misprint. Not only is it very high, but it's increasing - quickly.
This will be squeezing company margins very hard. This can have number of effects; companies will try to increase their prices, to the extent that they are successful they will cause further consumer inflation; they will find themselves unable to pay their employees and will reduce their hours or lay them off; they could try to increase their volumes and sell more - but shoppers have less money because they are repaying debt, and because they are paid less, and can buy less because of inflation.
In all cases the employees lose because they may get paid less and are more fearful of losing their jobs; the company owners lose because they have less profit (surplus exchangable fiat tokens) and so spend less in the economy; the customers lose because inflation passed on to them means they can buy less, and as businesses go out of business they have fewer choices. There are few winners when inflation takes hold.
It's getting worse, the input inflation to April 2011 was 17.6%. No that's not a misprint. Not only is it very high, but it's increasing - quickly.
This will be squeezing company margins very hard. This can have number of effects; companies will try to increase their prices, to the extent that they are successful they will cause further consumer inflation; they will find themselves unable to pay their employees and will reduce their hours or lay them off; they could try to increase their volumes and sell more - but shoppers have less money because they are repaying debt, and because they are paid less, and can buy less because of inflation.
In all cases the employees lose because they may get paid less and are more fearful of losing their jobs; the company owners lose because they have less profit (surplus exchangable fiat tokens) and so spend less in the economy; the customers lose because inflation passed on to them means they can buy less, and as businesses go out of business they have fewer choices. There are few winners when inflation takes hold.
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