Whilst this is all genuinely very interesting - I think my issue with it, is the fact there is very little I can do about it all over and above what I'm already doing, i.e. not putting any purchases on credit cards, no stupid purchases of things I don't need, saving as much as possible, keeping my nose clean at work.
In fact - it has occured to me if we all did all of the above is probably a sure-fire way of ensuring an economic downturn.
Aside from that, we can debate the relative vulnerability of our employers, the safety of our cash stuffed in our mattresses vs. in our bank, the possibility of it all going arse over tit but it all seems a bit Chicken Little to me. I also feel that all this excessive fear could quite probably turn the doomsday senario into a self-fulfilling prophesy.
Interest rates (apart from the Bank of engalnd's repo or base rate) are going up at the "retail end" of the process, for both individuals and companies. While some people and comapnies may be able to finance themselves out of current earnings many more cannot and need access to working/revolving credit. That is the problem. Higher credit charges affect everyone either directly or indirectly. If you are a net saver then maybe you will be getting a bit more for your money but for those who are borrowers they are paying a good deal more. This will then impact on everyone as companies can't afford to invest as much (or at all) as previously they might and individuals have to rein in their spending. In many cases this may be a good thing after the spending binge of the last 5 years but it will impact on all aspects of the economy and no-one will be insulated.
And of course you have to decide how to measure inflation....CPI, HICP, RPI, RPI-X or Y and several more too. And when you have decided on one there is the problem that these are all useleass as everyone has an individual personal spending pattern, and that is the problem with our current system. The government's preferred measure (CPI) just doesn't feel representative to the great majority of people for their own experience of higher prices over the last few years, with its focus on durable goods (which have been falling due to globalisation) and its lack of input for house prices/costs and daily service charges.