Ringwraith Posted October 6, 2011 Share Posted October 6, 2011 Bank of England fires up the digital printing presses again, to the tune of another £75bn. http://www.bbc.co.uk...siness-15196078 Things are ceasing up again! Link to comment Share on other sites More sharing options...
Nom de plume Posted October 6, 2011 Share Posted October 6, 2011 Will it help the man on the street? ... QEII is another bankers lifeline. Mind you, we are coming up to the Bonus season. Best ensure there's enough in the pot. Get ready to see inflated fuel, utility & grocery bills ... Cameron & Osborne will kill Britain. Link to comment Share on other sites More sharing options...
Cambon Posted October 6, 2011 Share Posted October 6, 2011 Will it help the man on the street? ... No, his wage packet has just been diluted QEII is another bankers lifeline... No, it is the government trying make money available for lending Get ready to see inflated fuel, utility & grocery bills ... Yes to that one Cameron & Osborne will kill Britain. Too late, Gordon Brown has already done the job. Link to comment Share on other sites More sharing options...
Pierrot Lunaire Posted October 6, 2011 Share Posted October 6, 2011 Hmm, give the banks even more money to keep to themselves. That'll work. Link to comment Share on other sites More sharing options...
Nom de plume Posted October 6, 2011 Share Posted October 6, 2011 QEII is another bankers lifeline... No, it is the government trying make money available for lending That maybe the intention but it won't happen. The banks will 'invest' or should we say, gamble the money. The ****ing Charlatans. The weakest get weaker, the poorest become poorer. This Eton based Government is oblivious to everyone. Link to comment Share on other sites More sharing options...
Lxxx Posted October 6, 2011 Share Posted October 6, 2011 Cue more inflation as the pound in your pocket becomes worth less the more of them that get printed into existence. What better time to spend your fiat on some lovely shiny metal, that they've put on sale and discounted for us recently, to maintain your purchasing power. Link to comment Share on other sites More sharing options...
pongo Posted October 6, 2011 Share Posted October 6, 2011 They will then have created a total of £275 bn via QE since the banking crisis began - according to The Guardian. I think that would be about £5000 per UK person assuming that they are using 1bn = 1000 million. If they feel the need to pump money into the economy, they might just as well give it to the poorest people - since the poorest people are more likely to actually spend it. Or better still halt the UK govt cuts. Certainly it is difficult to understand how there can simultaneously be a policy of drastic UK govt cuts whilst money is simultaneously created electronically and used to prop up the finance sector. Better the govt would spend this electronic money surely. The banks should have been allowed to fail naturally back in 2007/8. Link to comment Share on other sites More sharing options...
Chinahand Posted October 6, 2011 Share Posted October 6, 2011 The argument is that QE is less inflationary than you'd expect as it is compensating for the lack of monetary creation from the banks due to them maintaining greater reserve requirements and so lending less. Most monetary creation comes from Banks based on their reserve ratios - these have increased due to bad loan provision etc. - resulting in less money getting into the real economy. By directly buying bonds the BofE is by-passing the banks and directly injecting money into the economy. Link to comment Share on other sites More sharing options...
Pierrot Lunaire Posted October 6, 2011 Share Posted October 6, 2011 Had a little chuckle at the Number Crunching feature in the latest Private Eye: (No. 1298 30 Sept - 13 Oct, Page 5) £1.5bn Amount lost by UBS as result of "rogue trader" Kweku Adoboli, for which he faces prison £850bn Amount given by taxpayers to RBS, HBOS and other banks as result of their own disastrous gambling, for which no one at all faces prison Link to comment Share on other sites More sharing options...
Chinahand Posted October 6, 2011 Share Posted October 6, 2011 @Pongo - how do you protect the depositors, when the banks are 40% down and non-deposit debt and reserves only make up 20%? The Northern Rock bank run was bad enough, but when you've mass retail banks like RBS, Natwest, HBOS etc saying they should just fail isn't a reality most of us would want. The government stepped in - the existing shareholders were massively diluted and lost basically everything and debt holders pushed down the ranking as the government took its place in the queue. That made people pay for their recklessness, but kept depositors safe. I'm not certain how it could have been done better - definitely saying they should have naturally gone to the wall in 2008 would have made the crisis orders of magnitude worse as retail depositors would have paniced causing self fullfilling runs. Link to comment Share on other sites More sharing options...
pongo Posted October 6, 2011 Share Posted October 6, 2011 The argument is that QE is less inflationary than you'd expect as it is compensating for the lack of monetary creation from the banks due to them maintaining greater reserve requirements and so lending less. The counter argument is that QE has fueled much higher commodities market prices via the banks - rather than going into the economy where it was intended. The huge salaries are also unacceptable, obviously. These are failed businesses. I hear what you are saying about depositers but ultimately disagree with govt supporting failed businesses. The same as in the 70s - ultimately they have to be allowed to fail. Better to bail out the depositers directly where necessary. And govts need to stop intervening on the markets too IMO - eg these bogus european moves against short selling etc. By directly buying bonds the BofE is by-passing the banks and directly injecting money into the economy. They are buying assets from the banks according to what I have been reading today. ETA - on the other hand. I am not so arrogant as to pretend that I know better than the governor of the Bank. Also wondering whether the UK govt or the Bank is running economic policy. Link to comment Share on other sites More sharing options...
Cambon Posted October 7, 2011 Share Posted October 7, 2011 They are buying assets from the banks according to what I have been reading today. Was that on Murphy's blog, or some other communist propaganda? Link to comment Share on other sites More sharing options...
pongo Posted October 7, 2011 Share Posted October 7, 2011 They are buying assets from the banks according to what I have been reading today. Was that on Murphy's blog, or some other communist propaganda? My guess would be that the quasi leftists, like yourself and Murph, probably support these sorts of anti market interventions. Link to comment Share on other sites More sharing options...
Cambon Posted October 7, 2011 Share Posted October 7, 2011 My guess would be that the quasi leftists, like yourself and Murph, probably support these sorts of anti market interventions. Me? I am slightly right of Thatcher! Murphy is virtually communist! Link to comment Share on other sites More sharing options...
pongo Posted October 7, 2011 Share Posted October 7, 2011 I am slightly right of Thatcher the banking and corporate finance sector is analogous to the lame duck British motor industry of the 1970s. It's weird that people who are supposedly economically laissez faire would get behind supporting what are effectively corporate bailouts. Link to comment Share on other sites More sharing options...
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