Ajay Ahuja Blog Post on Headline News and Investors

Headline news is the official rate of inflation is 3.7% AND the Bank Of England keep rates ON HOLD at record low levels of 0.5%.

Seems strange doesn’t it?  Well not really when you think about it.

Inflation is a very powerful thing especially if you are in debt to your eyeballs.  The government are so indebted they are on the verge of bankruptcy.  Inflation is like the “Get Out Of Jail” card for the government.

So the cynical are all saying that the bank is happy to let inflation get out of control for a while and then reign it in when their debt levels look sensible relative to GDP.

So what does this mean for us investors?  Well if you are in debt up to your eye balls then you will benefit also.

Expect the cost of living to go up
Wages to go up
Rent to go up

All resulting in:

POSITIVE CASHFLOWS GOING UP

So expect some healthy margins in the future.  For those of you who can see through all the hype will see the biggest buying opportunity for many many years.  The fear within the property market will mean some will panic sell.  So are you ready to frenzy buy?

Do I think rates will go up? Not likely but who knows in this strange world we live in.

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