Wednesday, 23 December 2009
QE not yet working according to Bank of England!
But there latest Bank of England meeting notes are very interesting. The line I am intrigued by is the one that says with Money Supply growth falling QE is not working. Funny that, I agree with regards to money supply, but assets have boomed these last 6 months. The FTSE is up 53%, Gold is up, oil is up etc.
Now the Bank expects the real impact of QE to be felt in the economy with a lag, so that will be next year then!
Does this mean that instead of a big bust in the first few months of the year we will have a huge boom? Clearly the Bank think that..makes pickaing a strategy hard. Except that the Bank have been wrong about nearly everything for 2 years now - so perhaps the best thing to do is plan for the opposite.
I do also get the impression that QE is not about to be stopped on these numbers, which is bad for the Pound and good for Equities.