Timm Posted December 16, 2009 Share Posted December 16, 2009 Two intelligent, noisy and well informed posters who seem to hold opposing views. But are they two sides of the same coin? Injin seems (to me) pretty clear on his opinion: QE could allow all deposits in the banking system to be withdrawn, thus threatening imminent immanant hyper inflation as all the boomers rush to the banks, grab their cash and buy lots of stuff. Scepticus meanwhile (appears) to be arguing that QE is increasing the money held by banking institutions as reserves, and that as these institutions are limited in the amount of credit they can create by their Capital and not their Reserves, then QE cannot lead directly to high inflation of credit. Let's suppose for a moment they are both right. That assumes that there is little new credit money available, but lots of cash available. Wouldn't that mean we should be wondering what the cash rich boomers will be spending their dosh on, rather than credit junky Gen X and Y? Will it be blue rinses, slippers and pipes, or will they all be splashing out on house deposits and.. erm, bank shares? Quote Link to comment Share on other sites More sharing options...
Lepista Posted December 16, 2009 Share Posted December 16, 2009 Never mind that. (a) In a fight, which would win? ( Who has the best avatar? Quote Link to comment Share on other sites More sharing options...
Injin Posted December 16, 2009 Share Posted December 16, 2009 On the topic title? No! My position is that that QE is basically providing money that the commercial banks have already told people was there (but wasn't.) And paying the states bills as tax take is down. Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted December 16, 2009 Share Posted December 16, 2009 Two intelligent, noisy and well informed posters who seem to hold opposing views. But are they two sides of the same coin? Injin seems (to me) pretty clear on his opinion: QE could allow all deposits in the banking system to be withdrawn, thus threatening imminent immanant hyper inflation as all the boomers rush to the banks, grab their cash and buy lots of stuff. Scepticus meanwhile (appears) to be arguing that QE is increasing the money held by banking institutions as reserves, and that as these institutions are limited in the amount of credit they can create by their Capital and not their Reserves, then QE cannot lead directly to high inflation of credit. Let's suppose for a moment they are both right. That assumes that there is little new credit money available, but lots of cash available. Wouldn't that mean we should be wondering what the cash rich boomers will be spending their dosh on, rather than credit junky Gen X and Y? Will it be blue rinses, slippers and pipes, or will they all be splashing out on house deposits and.. erm, bank shares? forget all that, whats with the spelling cross out thing? right over my head, oed says immanent n adjective existing or operating within. Ø(of God) permanently pervading the universe. Often contrasted with transcendent. DERIVATIVES immanence noun immanency noun immanentism noun immanentist noun ORIGIN C16: from late Latin immanent-, immanere 'remain within'. Quote Link to comment Share on other sites More sharing options...
Timm Posted December 16, 2009 Author Share Posted December 16, 2009 On the topic title? No! My position is that that QE is basically providing money that the commercial banks have already told people was there (but wasn't.) And paying the states bills as tax take is down. Thats's what I thought. (I'll leave the monetization of national debt for a moment). I'd be interested to hear if I've understood Scepticus right, he does tend to use more words... Quote Link to comment Share on other sites More sharing options...
Guest KingCharles1st Posted December 16, 2009 Share Posted December 16, 2009 Never mind that. (a) In a fight, which would win? ( Who has the best avatar? Could be Luke and Darth all over again Seems to me, QE has had little effect on the high street. As far as people spending cash- no way. People are shit scared of anything and everything to do with money now. They are confused, and running scared. I almost feel people would rather lose "interest" (haha) by storing it under their bed in a box, and watching it's value remain the same. People will only start spending huge tracts of cash IF they are scared of huge inflation- that they can actually see happening around them. Quote Link to comment Share on other sites More sharing options...
Orbital Posted December 16, 2009 Share Posted December 16, 2009 Or maybe they are both wrong ! Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted December 16, 2009 Share Posted December 16, 2009 this is how it works. Bankster borrows 100bn from Boe long term with haircut against impaired asset. Bankster BUYS Gilt for Government with borrowed cash. Bankster sells Gilt to BoE for QE cash. so the Boe has the crud, tha bankster has cash and a repaired ( temporarily) balance cheat. Bankster buys stocks, keeps the profits and remaining cash for Christmas party. Quote Link to comment Share on other sites More sharing options...
the_duke_of_hazzard Posted December 16, 2009 Share Posted December 16, 2009 this is how it works. Bankster borrows 100bn from Boe long term with haircut against impaired asset. Bankster BUYS Gilt for Government with borrowed cash. Bankster sells Gilt to BoE for QE cash. so the Boe has the crud, tha bankster has cash and a repaired ( temporarily) balance cheat. Bankster buys stocks, keeps the profits and remaining cash for Christmas party. Why do the gilts have to be involved? Why not just buy the "marked to whatever" asset? Quote Link to comment Share on other sites More sharing options...
Timm Posted December 16, 2009 Author Share Posted December 16, 2009 Or maybe they are both wrong ! Well, I've come to the conclusion almost everyone else is, so they would be in good company... this is how it works. Bankster borrows 100bn from Boe long term with haircut against impaired asset. Bankster BUYS Gilt for Government with borrowed cash. Bankster sells Gilt to BoE for QE cash. so the Boe has the crud, tha bankster has cash and a repaired ( temporarily) balance cheat. Bankster buys stocks, keeps the profits and remaining cash for Christmas party. Maybe you are right too! But are the banksters allowed to spend their reserves on canapes and Krug? I thought is was against possible claims by creditors? Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted December 16, 2009 Share Posted December 16, 2009 (edited) Could be Luke and Darth all over again Seems to me, QE has had little effect on the high street. As far as people spending cash- no way. People are shit scared of anything and everything to do with money now. They are confused, and running scared. I almost feel people would rather lose "interest" (haha) by storing it under their bed in a box, and watching it's value remain the same. People will only start spending huge tracts of cash IF they are scared of huge inflation- that they can actually see happening around them. heres an example of that inflation - fan heaters, were £5.99 now £8.99 i see i'm not going to be told what the spelling thing is about, i'll introduce some mistry of my own then Edited December 16, 2009 by loginandtonic Quote Link to comment Share on other sites More sharing options...
Fairies Wear Boots Posted December 16, 2009 Share Posted December 16, 2009 heres an example of that inflation - fan heaters, were £5.99 now £8.99 Were they 5.99 in summer? And now it's snowing? Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted December 16, 2009 Share Posted December 16, 2009 Were they 5.99 in summer? And now it's snowing? good point but no, last december 5.99 the fan heaters, £10 the static halogens Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted December 16, 2009 Share Posted December 16, 2009 Well, I've come to the conclusion almost everyone else is, so they would be in good company... Maybe you are right too! But are the banksters allowed to spend their reserves on canapes and Krug? I thought is was against possible claims by creditors? what reserves?..these were financial assets they were unable to sell when they ran out of cash. Quote Link to comment Share on other sites More sharing options...
Timm Posted December 16, 2009 Author Share Posted December 16, 2009 forget all that, whats with the spelling cross out thing? right over my head, oed says immanent n adjective existing or operating within. Ø(of God) permanently pervading the universe. Often contrasted with transcendent. DERIVATIVES immanence noun immanency noun immanentism noun immanentist noun ORIGIN C16: from late Latin immanent-, immanere 'remain within'. One suggests it is coming, the other that it is already here. The end of the world thing is just a happy accident. Honest. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted December 16, 2009 Share Posted December 16, 2009 Why do the gilts have to be involved? Why not just buy the "marked to whatever" asset? money laundering comes to mind. no lying is involved this way...the banks have their "haircut", and dud assets become cash. Quote Link to comment Share on other sites More sharing options...
Timm Posted December 16, 2009 Author Share Posted December 16, 2009 what reserves?..these were financial assets they were unable to sell when they ran out of cash. So would you see QE as unimportant when measured against schemes that buy or borrow impaired assets? Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted December 16, 2009 Share Posted December 16, 2009 One suggests it is coming, the other that it is already here. The end of the world thing is just a happy accident. Honest. you're unlikely to be a recent product of the uk educational system, then Quote Link to comment Share on other sites More sharing options...
Timm Posted December 16, 2009 Author Share Posted December 16, 2009 you're unlikely to be a recent product of the uk educational system, then Gen X I think. (Isolated upbringing, lots of books). Quote Link to comment Share on other sites More sharing options...
Fairies Wear Boots Posted December 16, 2009 Share Posted December 16, 2009 good point but no, last december 5.99 the fan heaters, £10 the static halogens When I first started reading this site in approx 2006, they had held the base rate down too low too long. People were borrowing shed loads of money while interest rates were cheap. It's going to be dealing with inflation, and rate rises that's really going to be the kicker to a HPC. Quote Link to comment Share on other sites More sharing options...
loginandtonic Posted December 16, 2009 Share Posted December 16, 2009 Gen X I think. (Isolated upbringing, lots of books). don't become a teacher whatever you do, the bluffers in the staff room hate anyone who actually knows their subject, you'll get your tyres slashed by the head of your subject's department When I first started reading this site in approx 2006, they had held the base rate down too low too long. People were borrowing shed loads of money while interest rates were cheap. It's going to be dealing with inflation, and rate rises that's really going to be the kicker to a HPC. will they put the rates up though, considering they can't afford the repayments? i say they as in boe/govt which are supposed to be separate entitiies but they are all zanulabour Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted December 16, 2009 Share Posted December 16, 2009 its like comparing Gordon Brown with Adam Smith Quote Link to comment Share on other sites More sharing options...
Timm Posted December 16, 2009 Author Share Posted December 16, 2009 its like comparing Gordon Brown with Adam Smith In that order? Quote Link to comment Share on other sites More sharing options...
scepticus Posted December 16, 2009 Share Posted December 16, 2009 Thats's what I thought. (I'll leave the monetization of national debt for a moment). I'd be interested to hear if I've understood Scepticus right, he does tend to use more words... not this time. I suspect injin and I are both right in the sense that you can have a cash economy, or a credit economy, but not a combination of both. it's not stable, and its not compatible with democracy. Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted December 16, 2009 Share Posted December 16, 2009 (edited) In that order? no did you have to ask Edited December 16, 2009 by lowrentyieldmakessense(honest!) Quote Link to comment Share on other sites More sharing options...
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