tag:blogger.com,1999:blog-32841798.post8456020164270776558..comments2024-03-29T11:01:01.401+00:00Comments on Capitalists@Work: Stop QE and raise UK interest ratesCityUnslickerhttp://www.blogger.com/profile/15929544047783163175noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-32841798.post-89155899967261047362012-10-29T19:13:09.475+00:002012-10-29T19:13:09.475+00:00C, for the avoidance of doubt, I'm not against...C, for the avoidance of doubt, I'm not against the ending of QE. Just now now, without any other kind of change. The BoE is buying time; the question is, what are we doing with the time bought?Sackersonhttps://www.blogger.com/profile/17284329249862764601noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-60537504017764683802012-10-29T16:45:00.104+00:002012-10-29T16:45:00.104+00:00I'm guessing it will be unwound when inflation...I'm guessing it will be unwound when inflationary pressures call for it to be unwound. I'm not sure I understand your point at all. You are calling for real rate tightening but also saying that real rate tightening till be terrible. Confused.Blue Eyesnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-65194177851546752772012-10-29T14:01:18.988+00:002012-10-29T14:01:18.988+00:00BE -you make my point, there is no limit to QE, so...BE -you make my point, there is no limit to QE, so how will it ever get unwound without terrible consequences? Japan is a very bad example here given they actually save domestically and even then have ended up with 200% GDP debt. <br /><br />I don't see it, but he consensus is against me at the moment. It won't be in a year or two.CityUnslickerhttps://www.blogger.com/profile/15929544047783163175noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-32789423087483162142012-10-25T13:49:17.055+01:002012-10-25T13:49:17.055+01:00Did Mervyn really surprise you when he said he did...Did Mervyn really surprise you when he said he didn't want helicopter money and he wanted to sell the gilts back at some stage?<br /><br />"What is enough QE?" Really?<br /><br />That's a bit like saying "what is the right interest rate" or "what is the ideal price of a pint of milk".Blue Eyesnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-45852061291388892372012-10-24T23:47:15.502+01:002012-10-24T23:47:15.502+01:00Inflation
Soros fucked the BoE 2o years back by ...Inflation<br /><br /> Soros fucked the BoE 2o years back by banking £700 million in an afternoon, nowadays the BoE doesn't get out of bed for half a Trillion. I got sacked for saying it's inflationary and I completely stand by my wrong decision. But FFS, I don't care if Mervyn's left a dump in the bottom drawer - we are where we are.<br /><br /> I don't buy conspiracy theories against the bank. They had to work with an egregious mind that had an authority beyond normal channels. As soon as they became too big to fail everyone hunkered down - the politics was fine but the economics fucked. I used to work in the gutters of Halifax and to lose that town over the whims of the Belgians seems satyrical.<br /><br /> Guilt synonomous with gilt; ah, what the fuck are you gonna do? It is amazing that we have debates about energy security based on price. I'm gonna sit here and fume about inflation and be wrong every time - fucking marvelous. Merv's been a good lad, better than that O'Donnell chap - tried to make out he was the bees knees - wanker! Application withdrawn - yeah? Too fucking right.<br /><br /> DtPDick McPricknoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-84343016643025852972012-10-24T23:19:21.303+01:002012-10-24T23:19:21.303+01:00it is hard for the madarins to break the cycle of ...it is hard for the madarins to break the cycle of "the man in Whitehall knows best". They retained the bread ration till 1957! it takes a minister of guts to say "no". can anyone explain why nit mtook so long for WW2 rationing to be dissolved....POWER is the answer. Ministers want POWER. They should be trained and rewarded to devolve power. But they are not. So our democracy is always going to work poorly.Graemehttps://www.blogger.com/profile/11007306140530173428noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-72374822587236587402012-10-24T22:24:35.236+01:002012-10-24T22:24:35.236+01:00Also, he lack of activity caused by zombie fiction...Also, he lack of activity caused by zombie fiction is also killing the service economy.CityUnslickerhttps://www.blogger.com/profile/15929544047783163175noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-4527678390114010212012-10-24T22:23:26.618+01:002012-10-24T22:23:26.618+01:00What is enough QE?
How do you unwind it?
What ar...What is enough QE?<br /><br />How do you unwind it?<br /><br />What are your ideas for stopping the government thinking it has discovered the free money tree.<br /><br />I wrote this before Mervyn's speech - he is clearly trying to set the blame up for the next guy,<br /><br />I fear I have few shumpterian readers....CityUnslickerhttps://www.blogger.com/profile/15929544047783163175noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-16860577467544095842012-10-24T22:00:05.122+01:002012-10-24T22:00:05.122+01:00I agree with Sackerson particularly on this, but e...I agree with Sackerson particularly on this, but every comment has good points. Sorry, CU.Budgienoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-8098060283835762802012-10-24T13:34:52.268+01:002012-10-24T13:34:52.268+01:00There are two ways of looking at house price infla...There are two ways of looking at house price inflation of course.<br /><br />Old people getting richer<br /><br />Young people getting poorer<br /><br />And if I were a young and skilled person I'd make sure that the old people paid top dollar for my rare talent and if they didn't respect me enough I'd bugger of and leave 'em to fester in their own wee. Electro-Kevinhttps://www.blogger.com/profile/18073103431166273080noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-21098486008779323372012-10-24T10:57:42.294+01:002012-10-24T10:57:42.294+01:00Is it just me or is the timing of this thing a bit...Is it just me or is the timing of this thing a bit odd? Is Mervyn trying to get out of jail scot free and at the same time screw the next guy? Does he know something that he's not letting on? Everyone knew this before it started so why speak up now? A bit smelly.<br /><br />DtPAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-66395806643511130812012-10-24T10:19:26.455+01:002012-10-24T10:19:26.455+01:00And the Japanese outcome is unlikely. We didn'...And the Japanese outcome is unlikely. We didn't enter the crisis as a creditor nation, our people have lost what savings culture they had, and we've merrily sent away our productive capacity.<br /><br />http://maxkeiser.com/2012/10/23/japan-is-not-a-good-example-of-how-deflation-typically-plays-out/<br /><br />Marc Faber recently repeated his advice to buy a farm. He lives in the predominantly agricultural region of Chiang Mai in Northern Thailand. Chnces of me buying and running a small farm - safely - in the overcrowded and unruly UK?Sackersonhttps://www.blogger.com/profile/17284329249862764601noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-49183697237628657272012-10-24T10:01:44.552+01:002012-10-24T10:01:44.552+01:00I said right at the beginning of this Depression t...I said right at the beginning of this Depression that the best we could hope for was the Japanese outcome - zero growth bumping along the bottom for (possibly) decades, but without the whole thing slipping violently into a deflationary liquidation or an inflationary (possibly hyper-inflationary) spiral. Either of which would have massive destructive effects on society. Indeed it's possible society as we know it might not survive either of those extremes.<br /><br />There are no sunny uplands to be reached by some cunning economic sleight of hand. No return to 2-3% growth year on year. We have increased our living standards for a good part of the last 40 years by taking on more and more debt. It might take 40 years to work through the effects of that. <br /><br />This is the normal for the foreseeable future.Jimnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-34861247165305311732012-10-24T09:19:34.894+01:002012-10-24T09:19:34.894+01:00So CU you think QE won't be reversed because i...So CU you think QE won't be reversed because it will cause interest rates to rise killing everything in their wake so you propose raising interest rates instead?<br /><br />Government policy at the moment is a confidence trick. Enough QE to keep the government's borrowing costs down while it reduces the deficit to a sustainable level without the mad deflationary policies being implemented in Spain and elsewhere. Keep the economy stable for long enough for private debts to fall a bit and get a bit of private sector momentum going. <br /><br />We are in a massive depression. Zombie banks and zombie firms we may have but keeping them alive while we wait and hope for something else to turn up must surely be the least worst option.<br /><br />In the 19th century everything would have been allowed to go bust, trashing the economy but allowing it to rebuild. Nobody would tolerate that now.Blue Eyesnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-67463214100549696132012-10-24T09:07:03.541+01:002012-10-24T09:07:03.541+01:00Here's a view:
QE is not to promote growth, b...Here's a view:<br /><br />QE is not to promote growth, but to ward off deflationary collapse caused by declining velocity.<br /><br />If QE stops, government finance unravels at high speed and we get major economic dislocation as loads of people lose their jobs and demand plummets.<br /><br />If interest rates rise, ditto, because of massively increased debt servicing costs. Plus the bond market takes a bath and "cautious"-oriented pensions and investments are hit for six.<br /><br />Keep clapping your hands and Tinkerbell may live a little longer.<br /><br />The time for what you suggest is when velocity picks up. But because of overall debt load, the sea-change in sentiment and the longterm transfer of productive capacity overseas, I don't see that happening for a long time.Sackersonhttps://www.blogger.com/profile/17284329249862764601noreply@blogger.com