Friday, Dec 05, 2008
Savers caught in the blast zone - everyone annihilated in the fall out
telegraph: Bank of England mulls "nuclear option" of cash injection
the Bank is considering pressing the button on printing presses by engaging in a so-called policy of quantitative easing
Posted by matt_the_hat @ 10:34 AM (741 views) Add Comment
13 Comments
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1. paul said...
Sound financial judgment.
2. mrmickey said...
I wonder how long it is before this website is shut down for disseminating negative and anti government propaganda, not long me thinks.
3. harold said...
Arm wrestle with the invisible man.
4. fjcruiser said...
It used to be called using the printing press, now it is called quantitative easing. Socialist propaganda talk. Thanks Mr Gobbelson.
5. sold 2 rent 1 said...
If M3 money growth is in resonance in Calleman's Underworld's model then we could see money supply surge to a high in October 2009 (mapped to 1971 peak) with gold reaching a peak 6 months later (April 2010) (mapped to 1980).
Remember what took 10 years (M3 peak to gold peak) now will only take 6 months as change is 20 times faster as we zooooooooom into the Consciousness Singularity of 2011
6. paul said...
I just knocked this together. Not sure if it will animate here though ...
7. fjcruiser said...
great.
8. planning4acrash said...
Paul, would work better if you get pics without hands by the face. The hands are screwing with the animation. Would be good to have one where Blair morphs into Brown, morphs into Mugabe, morphs into King, Morphs into Mugabe, morphs into Blair!!
Just an idea.
9. stillthinking said...
Well, don't forget that King's strategy for reflation is to 'credibly' guarantee a future inflation rate. We are certainly in a deflationary period now, so the longer you hold cash the more assets you ultimately end up with.
If you jump out now, but nobody else does, then you end up holding assets losing value while the deflationary period continues. If this announcement only panicks a few people then it won't work, particularly as there is global deflation, not just in the UK. Of course it is best that the whole group jumps out, but unfortunately best for the individual to stay in (as in hold on to cash).
Another thing that occurs to me given the other articles posted today, is that gilt issuance is coming to the end of the line sooner than expected. There is a mainstream view that yields go up in the end due to flooding the market. I think that government borrowing is heading straight for a higher yield -now-, or basically, the additional borrowing by the government is no longer a solution, because it will force interest rates up and exacerbate the deflationary forces.
I was thinking when people talk about foreign reserves and the vast amounts of sterling held abroad, that automatically makes me think oh they have cash. Maybe they don't, maybe the foreign reserves are already in gilts. You can't buy gilts with gilts(!).
Really, it comes down to this, do you believe Kings announcements to be in your personal, individual best interest, when they are designed for the good of the whole. Maybe the government are desperate for those staying out of housing to get back in, and are trying to scare them into doing so.
10. george monsoon said...
Hyperinflation here we come!!!!
11. stillthinking said...
I really don't think this will happen. Its one thing to threaten people with a gun at your own head, but another to pull the trigger. Printing money=currency collapse. A threat maybe. They haven't done it though, there is no actual date, additional government borrowing is still available, additional rate lowering is still possible. It isn't even necessary yet.
@georgemonsoon, thats why I think it won't happen. You can't restore a 2% inflation target with money printing, as you say the situation just goes immediately to hyperinflation.
12. matt_the_hat said...
9. stillthinking - the thing that I worry about is the speed that the government expects this to turn around - a new announcement every day - I think they will print money til the tanker turns then the rowing boat will have no chance of topping rampant inflation.
13. planning4acrash said...
A response to Sold2Rent's call for an end to money, on my blog, comments here and there are welcome:
End legal tender laws, but resist calls for prohibition of money.