In These New Times

A new paradigm for a post-imperial world

Posts Tagged ‘quantitative easing’

Germany says federal reserve heading `wrong way’ with monetary easing push

Posted by seumasach on October 24, 2010

European Central Bank President Jean-Claude Trichet said that the G-20 made “no particular conclusion” after some members expressed concern about proposals for further quantitative easing in the U.S.

I think the conclusion is that the US plan has been quietly but firmly rejected. What will their next step be? Nice to see a bit of straight speaking from the Germans – they’re becoming increasingly uppety.

Bloomberg

23rd October, 2010

The Federal Reserve’s push toward easier monetary policy is the “wrong way” to stimulate growth and may amount to a manipulation of the dollar, German Economy Minister Rainer Bruederle said.

Read the rest of this entry »

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Cheap dollars are sowing the seeds of the next world crisis

Posted by smeddum on September 13, 2009

Cheap dollars are sowing the seeds of the next world crisis
After years of selling cheap goods to debt-fuelled Western consumers, China now has $2 trillion dollars of foreign exchange reserves. That’s 2,000 billion – a reserve haul no less 25 times bigger than that of the UK.

By Liam Halligan

Published: 12 Sep 2009

Telegraph

In a world of systemic instability, reserves mean power. Reserves mean you can defend your currency, stabilise your banking system and boost your economy without resorting to yet more borrowing – or, worse still, the printing press. Read the rest of this entry »

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UK will grow sicker until it swallows the bitter pill of economic reality

Posted by smeddum on September 4, 2009

UK will grow sicker until it swallows the bitter pill of economic reality

Millions of ordinary Britons are worried sick about debt and falling incomes. Unemployment and house repossessions are soaring – glib statistics which mask a welter of human misery. Countless UK firms are struggling with cash flow as they try to balance the books. And we’re all sick of the grim economic news.
Telegraph

By Liam Halligan

29 Aug 2009

No wonder the UK’s “imminent recovery” is getting a lot of coverage. Last week, I returned from holidays abroad to find our media banging the “recession is over” drum. In truth, though, the UK remains in economic dire straits.
I write this not to “talk down the economy” – although I’ll be accused of doing so. I’m countering the prevailing consensus because of the evidence. I’m also concerned that by insisting everything is rosy, a vast panoply of political and financial vested interests can claim their counterproductive “rescue measures” are working, while avoiding the tough regulatory changes we need to prevent another “sub-prime”. Read the rest of this entry »

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Quantitative easing- cure or kill?

Posted by smeddum on June 12, 2009

Inside investment: Quantitative easing – Kill or cure?
Monday, June 08, 2009
Andrew Capon
Euromoney
Quantitative easing is being hailed as a policy panacea. The problem is that it sounds a lot like a prescription that causes the very problems it is designed to treat.
When the world was a happier place, before economists annexed the lexicon of forensic pathologists, there was much talk about global imbalances. In the final quarter of 2005 the US current account deficit peaked at 6.4% of GDP. Some thought this was a bad thing, although few pinned down exactly why. Others thought it was a “stable disequilibrium”. Export-driven economies, principally in Asia, could in effect provide vendor financing to the US via their high savings rates, foreign exchange reserves and sovereign wealth funds.
We now know that this stable disequilibrium did not beget stability. Instead, it inflated bubbles everywhere. Federal Reserve chairman Ben Bernanke presciently called the rise in current account surpluses in Asia and oil-exporting economies a “global savings glut”. By contrast the US household savings rate as a share of disposable income gradually declined from 10% in the early 1980s and tipped into negative territory in 2003. The reason US savings went negative was that people were using their houses as ATMs. As house prices soared so did equity withdrawal.
Ultimately, like a Ponzi scheme, debt-fuelled demand will collapse under its own weight. Many point to Bernanke’s predecessor at the Fed, Alan Greenspan, as bubble-blower-in-chief. It is now received wisdom that after the TMT bust Greenspan kept interest rates too low for too long. However, Greenspan could only keep rates so low with the complicity of foreign investors, many of them other central banks and official institutions, which were needed to plug the gap in US savings and fund the current account deficit. By 2007 the US absorbed 65% of global capital imports. Read the rest of this entry »

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China fears bond crisis as it slams quantitative easing

Posted by smeddum on May 7, 2009

China fears bond crisis as it slams quantitative easing
China has given its clearest warning to date that emergency monetary stimulus by Western governments risks setting off worldwide inflation and undermining global bond markets.

By Ambrose Evans-Pritchard
07 May 2009
Telegraph

“A policy mistake made by some major central bank may bring inflation risks to the whole world,” said the People’s Central Bank in its quarterly report.
“As more and more economies are adopting unconventional monetary policies, such as quantitative easing (QE), major currencies’ devaluation risks may rise,” it said. The bank fears a “big consolidation” in the bond markets, clearly anxious that interest yields will surge as western states try to exit their QE experiment.

Simon Derrick, currency chief at the Bank of New York Mellon, said the report is the latest sign that China is losing patience with the US and aims to diversify part its $1.95 trillion (£1.3 trillion) foreign reserves away from US Treasuries and other dollar securities. Read the rest of this entry »

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IMF poised to print billions of dollars in ‘global quantitative easing’

Posted by smeddum on March 14, 2009

 

The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis.

Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression. Read the rest of this entry »

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Bank of England Ignites Quantitative Inflation

Posted by smeddum on March 6, 2009

 

Market oracle


By: Nadeem_Walayat

Interest-Rates

This is an interesting article in that it is written by a deflationist. He also seems to accept that the problem is credit. However, the problem is productivity. Credit for consumption or to pay off bad debts is only adding to the inflationary cycle

Diamond Rated - Best Financial Markets Analysis ArticleEconomic Shock and Awe as Interest Rates are cut to 0.5% coupled with £75 Billion conjured out of thin air by Mervyn King Waving his “Central Bank Magic Wand“. The government through what should be more accurately termed as “Quantitative Inflation” than “Quantative Easing” sanctioned £75 billion in the initial print run which will have a multiplier effect through fractional reserve banking and leverage of anywhere from between X10 to X20 the amount depending on how it filters through the economy, therefore £75 billion increase in the money supply implies the supply of credit should jump by anywhere between £750 billion to £1.5 trillion, but more probably in the region of X10 at £750 billion over the next few months, with expectations of several more doses of “Quantitative Inflation” during 2009 that seeks to devalue the British Pound towards parity to the U.S. Dollar. Read the rest of this entry »

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Bank of England ready to pump money into UK economy

Posted by seumasach on March 4, 2009

I,m intrigued by this notion of pumping money “into the economy”. Could they be more specific? Will I wake to find envelopes stuffed with £20 notes have been pushed through my letter box? Or will it all go to help buy certain worthless securities which our financial institutions have been accumulating? Definately a “no-brainer”. Click here for an explanation of quantitaive easing

Guardian

4th March, 2009

The Bank of England is expected to reduce interest rates to yet another record low tomorrow lunchtime; but with their rate-cutting ammunition all but exhausted, governor Mervyn King and his colleagues are expected to press the button on a much more drastic policy — quantitative easing.

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Reform plan raises fears of Bank secrecy

Posted by smeddum on January 12, 2009

 

The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.

 
The Bank of England will be able to print extra money

The Bank of England will be able to print extra money

The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet – a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel’s Government in 1844 which originally granted the Bank the sole right to print UK money. Read the rest of this entry »

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Quantitative easing- The nuclear option

Posted by smeddum on December 16, 2008

[Bernanke-QE-Cartoon.png]

Radio report here

Bernanke explains quantitative easing

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