The situation we face now in relation to inflation is an interesting one. I think many in the government would like to blame Covid all the quantitative easing that has taken place since the 2008 banking crisis.
The key for me is that government departments of known about this pending inflation for sometime, simple economics dictates what was likely to happen and indeed has happened.
It is not possible to shut down and economy effectively for a two-year period and then force that demand build up to to just disappear. That would not make any economic sense at all.
Even on current reported figures I think inflation is already out of control and the only way this is going to be resolved will be by the recession. Can’t see it ending any other way.
None of the central banks want to deal with the problem indeed, dealing with the problem will cause further pain for mortgage holders and we have a political problem seemingly across the globe.
So how does this end, for me or fancy the global economy starting to be hit quite hard this is already been reflected in the price of oil and I think we’ll see some more political instability along with the unions continuing to kick off because a devaluation of your money at 10% of year with increase in taxation is going to be painful for many.
As I have always said cash is king and you need to be preserving all you can just in case but at the same time you need to be mindful of staying in the markets in order to to make sure your money is working hard for you. You should make sure that all of your portfolios are geared towards income and make sure that income is not reinvested back into the same funds but held as cash in order for you to move on volatile markets.
As always these are interesting times. To be fair, markets are always volatile the issue I have is a political one and how that is being played out at the moment, in particularly in the UK.
When you are ready to get a shimmy on with some of the stuff and would like some help don’t hesitate to get in touch.