One thing I want to know is - does the Treasury pay the coupons on the gilts the BofE buys through it's reverse auctions?Anyone know the answer?
Dumped deliberately on the Tories by that spiteful moron, Brown!
Yes SL, they do, shuffling paper around the Government is one reason QE has not been all that effective.
It's £175B and counting......
Anon - it iwll match the government overspend, so you are right. I wonder how many people realise we have 10x the QE of the USA>
Couldn't agree more. But, hey, inflation will make the public debt seem less. There appears to be no regard being made to the finances of UK citizens, especially those that pay tax. Not even a heartfelt apology.It won't be easy to reverse the trend in 2011/12. Perhaps it will be dressed up by joining the euro. C@W, what a sorry State we find ourselves in! Least I am not the Governor.
theres a worrying number of people going along with this though. why isnt king resigning? or any of the others for that matter?in fact why isnt anyone in a position to do so saying anything out loud?
Only the story won't end in 2011. I'd give it a couple more decades.
QE and a decent inflation seems to me to be one of the least worst options for sorting out the financial mess. I don't condone the effect it will have on people who hold their savings in cash, but surely it is preferable to a protracted zero growth era?That said, I would prefer that the new money was spent by the private sector not the incompetent state.
QE did not cause inflation in Japan. If m4 growth remains below 0 there is no inflation. I think that inflation is the aim, it just may not be achieved. What IS achieved already is a screwing of our structural deficiet for maybe a decadge.
Surely printing the deficit means that there is nobody there who has to be repaid?
Issue debt-free notes and abolish the BofE, raise reserve requirements.
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