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Posts Tagged ‘QE2’

Britain in the midst of first double dip since the 1970s

Posted by seumasach on January 22, 2012

Here are the main themes of the UK media’s coverage of our economic collapse: the recession is a “technicality”; it’s all Europe’s fault; things will get better with more QE just like they didn’t last time.

It’s hard to know what to say to this. Britain is a consumer economy or it is nothing. The recession is plain for all to see: all three of my favourite coffee shops in the West End of Glasgow have closed since Christmas. The streets and roads are emptying. This is a downward spiral, a reverse multiplier.

Since our exports to Europe never amounted to much, even with the pound approaching parity with the euro, Europe can hardly be to blame. Of course, hedge funds may be losing bullions speculating against the euro but that is a different matter.

QE did nothing to help last time: it merely generated inflation and gave the financiers a number of ingenuous options such as carry trades to make a quick buck.

As I say we’re a consumer economy or we’re nothing. It looks like nothing. Mired in debt, stuck in homes which can’t sold, overwhelmed by rising prices of food and fuel, facing unemployment and frozen wages, facing cuts in benefits, overburdened by unfair taxation such as the notorious council tax, a virtual poll tax   which hasn’t been introduced elsewhere, facing endless fines for trivial driving or parking offences, unable to afford the exorbitant cost of public transport, watching our business fail as disposable income dries up, wandering around half-empty supermarkets looking for bargains and finding everyone gathering round the reductions shelf, unable to get simple house repairs done and paying through the nose for the failed attempt, buried under a cruel and corrupt benefits system, fighting failing health as the government blasts us with dangerous and carcinogenic radiation. All this only to be told by the media and politicians that everything is fine apart from the Eurozone, to be lied to incessantly by an army of irremediably corrupted experts, to have our intelligence insulted and our pockets emptied. This is Britain before the abyss, blind and befuddled, threatening or hectoring our international partners, hubristic and delusional, smug and stupid, rejoicing in the woes of others whilst seemingly unaware of where we are going. We are going to hell.

Telegraph

22nd January, 2012

This week official growth numbers are expected to show that the economy shrunk by 0.1% in the final three months of last year.

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‘Printed money’ and regulatory diktat are keeping UK gilt yields low

Posted by seumasach on January 11, 2012

To view Britain’s crisis from the point of view of controlling expenditure alone is very one-sided: Britain’s problems lie, above all, in the lack of a productive base. Still, Halligan provides some useful insights into the real state of Britain’s finances.

Liam Halligan

Telegraph

11th January, 2012

Ten-year sovereign yields dipped below 2pc during the last week of 2011. As Chancellor George Osborne often points out, UK state borrowing costs are now similar to those of Germany. In fact, they are at their lowest since the late 19th century.

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More QE ‘practically a foregone conclusion’.

Posted by seumasach on November 24, 2011

Bank of England warns risk of calamitous outcome to eurozone debt crisis is rising

The risk of a calamitous outcome to the eurozone debt crisis is rising, according to a stark warning from the Bank of England.

Minutes from this month’s meeting of the monetary policy committee, published yesterday, showed growing concern about the impact on the UK of the financial storm.

‘Concerns over the sustainability of the debt positions of some euro area countries had led to increases in the cost of borrowing for those countries and widespread falls in confidence,’ the report said.

While the worst risks had not so far crystallised, the threat of their doing so had increased, exacerbating the already severe strains in bank funding markets and financial markets more generally.’

The minutes showed the MPC voted unanimously in favour of leaving interest rates at a rock bottom 0.5 per cent and continuing with its programme of quantitative easing.

The Bank launched so-called QE2 last month when it agreed to pump another £75bn of newly created money into the economy, on top of the £200bn already printed.

The minutes suggested another round of QE will follow – but not until early next year once the latest £75bn has been exhausted.

The report showed some members of the nine-strong MPC thought another round ‘might well become warranted in due course’ to support the faltering recovery.

It warned the economy was likely to stagnate in the current fourth quarter of the year – leaving it perilously close to recession – having grown by 0.5 per cent in the third quarter.

Nida Ali, economic advisor to the Ernst & Young Item Club, said more QE was ‘practically a foregone conclusion’.

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Britain turns on ‘disreputable’ Germany

Posted by seumasach on November 5, 2011

Behind all the bluff and bluster, the sheer hysteria, the reality is quite simple: in order to protest the relative value of the pound the British want to see the euro devalued by quantitative easing just as the pound has been. The same applies to the dollar. They fear a resolution to the crisis which leaves the pound in freefall. Their fears are justified: that is exactly what will happen.

Britain turns on ‘disreputable’ Germany as relations sour over eurozone crisis

Guardian

5th November, 2011

Downing Street inadvertently provided a reminder last week of the depth of Britain’s ties with Germany.

In a briefing on the merits of David Cameron‘s plans to end male primogeniture in the royal line of succession, No 10 pointed out that Queen Victoria’s daughter would have succeeded her if the rules had been in place in 1901. Downing Street overlooked the fact that this would have meant that Kaiser Wilhelm II would have been our King during the First World War. Britain’s monarch would now be Princess Marie Cécile of Prussia.

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Mervyn King maps out road to lower inflation

Posted by seumasach on October 26, 2011

This is quite amusing: Mervyn King’s claim of declining inflation is obviously based on anticipated deflationary pressures i.e. collapsing consumption. This fails to take into account the effect of QE on the value of the pound. It is likely to fall substantially especially once the rescue package for the Euro has gone through with the help of China. Our prosperity over the last 20 or 30 years has been dependent on the high value of the pound and its acceptability as a means of payment to cover permanent trade deficit, as well as the desirability of UK gilts. QE, or the bailout of the banks by any other name, must undermine these fragile foundations of our well-being. It will provoke an inflationary surge whilst doing nothing to enhance growth since none of it is being directed into rebuilding our productive base. The higher interest rates when they come will devastate the middle-class overnight.

Mortgage and Remortgage

25th October, 2011

The governor of the Bank of England has explained in detail his forecast that inflation to fall back to target levels over the next two years.

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“QE is a back-door bail-out to refloat insolvent banks”

Posted by seumasach on October 13, 2011

Talking up austerity will never bring down the UK’s debt, Mr Osborne

Liam Halligan

Telegraph

8th October, 2011

I don’t envy George Osborne. The Chancellor of the Exchequer has a very tough job. It should be acknowledged that, since coming into office 18 months ago, Osborne and his Treasury team, not least Danny Alexander from the Liberal Democrats, have acted with courage.

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Britain in grip of worst ever financial crisis, Bank of England governor fears

Posted by seumasach on October 6, 2011

The TUC’s general secretary, Brendan Barber, said the decision to expand QE was the right one, but added: “While it is better than not doing anything, quantitative easing is no economic magic wand.

“We worry that it does more to help the finance sector than the rest of the economy and could fuel further inflation at a time when living standards are already being squeezed.”

That’s very perceptive of Barber to spot that QE aims to bail out the City whilst continuing the impoverishment of everyone else- yet he supports it!

Britain in grip of worst ever financial crisis, Bank of England governor fears

Guardian

 

6th October, 2011

 

Sir Mervyn King expressed fears that Britain is in the grip of the world’s worst ever financial crisis after the Bank of England announced it was injecting £75bn into the ailing economy.

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QE2 launched as Titanic sinks

Posted by seumasach on September 22, 2011

The inevitable will happen: here comes the next bailout of the banks, euphemistically described as “quantitative easing”. Prepare for further falls in the value of the pound with attendant inflation leading eventually to a raise in interest rates and mortgage rates. Attempts to offload the crisis onto the euro zone will probably fail given emerging economies support for euro. The disastrous and reckless war against Libya only adds to our disarray. The British people can only save themselves by moving to stop the wars and stop the bailouts which finance them.

Bank of England minutes indicate more quantitative easing on the cards

Guardian

22nd September, 2011

The Bank of England appears almost certain to expand its economic stimulus programme before Christmas, in an attempt to prevent the UK economy worsening.

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The most predictable financial calamity in history

Posted by seumasach on January 25, 2011

Greg Hunter

USA Watchdog

24th January, 2011

In November 2010, the Federal Reserve announced a second round of economic stimulus commonly referred to as Quantitative Easing (QE2).  The reason, according to the Fed, was“progress toward its objectives has been disappointingly slow.”   So, to try and turn the economy around, the Fed said, “. . . the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter (June) of 2011, a pace of about $75 billion per month.” (Click here to read the complete announcement from the Fed.) QE means the Fed basically creates money out of thin air to buy debt.  The current money printing orgy is financing more than half of U.S. government right now.  The first round of QE bought toxic mortgage debt and bailed out the bankers.

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Ideological and hostile- Commentary and weekly watch by Doug Noland

Posted by seumasach on November 23, 2010

“I find it embarrassing – to blame our trade partners and creditors for our predicament. Worse yet, it is frightening that there is obviously no plan of attack for dealing with the structural issues of the US. The Geithner/Bernanke “global rebalancing” gimmick is to have China and the “developing” economies inflate domestic demand and stimulate imports. In the meantime, we stay the course with massive deficits, monetization and near-zero interest rates. This approach has no chance of rectifying the country’s deep structural impairment nor resolving global imbalances. It does, however, increase the odds of a crisis of confidence in the US debt markets and currency.”

Doug Noland

Asia Times

23rd November, 2010

Click on above link for full bulletin

With eurozone tensions on the rise, Wednesday’s headline from the Financial Times read “Anger at Germany boils over”. “Bernanke Fires Back, Takes Aim at China,” was how the Wall Street Journal titled its analysis of the Federal Reserve chairman’s speech on Friday morning in Frankfurt. Paul Krugman also takes direct aim at Germany and China – and throws in the Republicans – with his “Axis of Depression” piece in Friday’s New York Times. In a troubled backdrop beckoning for level-headed analysis and cooperation, the mood has turned decidedly ideological and hostile.

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