Thursday, Mar 12, 2009
First attempt deemed a qualified success
The Telegraph: Bank plan to 'print money' begins
Investors piled into gilts after the Bank of England officially launched quantitative easing, buying £2bn worth of UK government bonds at its first auction. In what economists deemed a success, the Bank received £10.5bn worth of offers for gilts - more than five times what it sought. However, doubts remain as to whether the money the Bank is creating has found its way to the pension funds and insurance groups the Bank is keenest to target.
Posted by wanderinman @ 12:13 AM (362 views) Add Comment
2 Comments
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1. Koala Bear said...
A qualified success? The pound dropped 7p against the Aussie dollar overnight!
2. Economist said...
You have got this the wrong way around. The Government is buying gilts. Hedge funds now have a one way escalator in the gilt market. They can buy gilts in the sure knowledge that the Bank of England will buy them back in future at a tidy profit. Hedge funds are not about to lend mortgage money. Owners of 10 billion gilts have figured out a way to easy money. Expect 100 billion to be offerred at the next buy back. Is this smart?