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Telegraph: Bank Of England May Shift To 'heavy-Duty Credit Easing', Says Rate Setter Adam Posen

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apologies if already posted

http://www.telegraph.co.uk/finance/economics/8008291/Bank-of-England-may-shift-to-heavy-duty-credit-easing-says-rate-setter-Adam-Posen.html

He told a confence in Washingon the Bank of England's next step, if necessary, would be to shift into "heavy-duty credit easing".

Mr Posen defined credit easing as the targeting specific sectors, such as the United States did with housing markets.

The Bank of England, like the US Federal Reserve, has embarked on a £200bn progamme of purchases of gilts to boost growth after having lowered benchmark interest rates to an historic low of 0.5pc.

However, further quantitative easing may see diminishing returns in stimulating growth.

Mr Posen played down the usefulness of having the Fed target the yield on the ten-year Treasury note as a possible next page in its playbook.

US officials are contemplating further quantitative easing if the economic outlook darkens, but policymakers may eventually need to find other tools.

Speaking about above-target inflation in Britain, Mr Posen said that to the degree inflation can be explained as being due to a shock, policymakers have some latitude in their response.

If policymakers can credibly say inflation is not being passed through to general rises in inflation, the bank need not overreact, he said.

British inflation was 3.1pc in July, well above the central bank's 2pc target, but the BoE said last month this was mostly due to temporary factors while future growth was likely to weaken, making rate rises inappropriate for now.

The BoE last week kept interest rates at 0.5pc for the 18th month in a row and announced no new quantitative easing purchases.

any ideas what this means in practice?

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I used to get VERY upset by this sort of thing, now i don't.........they just bringing the end closer & quicker!

When we hit the end, we be back to a currancy backed by "some thing" & rates will be 7-11% from now on.

Mike

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I used to get VERY upset by this sort of thing, now i don't.........they just bringing the end closer & quicker!

When we hit the end, we be back to a currancy backed by "some thing" & rates will be 7-11% from now on.

Mike

tell that to the japanese!

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I used to get VERY upset by this sort of thing, now i don't.........they just bringing the end closer & quicker!

When we hit the end, we be back to a currancy backed by "some thing" & rates will be 7-11% from now on.

Mike

Pffft.

Rates might shoot up and stay there, but you're never going to a non-fiat currency in general circulation again, not unless there is some armageddon and billions of people die.

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So just as homes are appearing to head towards a level supported by the current, normal levels of lending (4x 90% LTV commonly available on the high street),and into the affordability of brackets of millions of FTBers and young families, they're seeking to inflate prices artificially again?

Is that right?

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Erm ... debasement, debauchery, inflation, inflation, printy printy, currency death.

to clarify what i am asking, is this going to be a straightforward QE2 or something else?

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http://en.wikipedia.org/wiki/Adam_Posen

Adam S. Posen (born in Brookline, Massachusetts) is an American economist, a member of the Monetary Policy Committee of the Bank of England (2009 - present) and senior fellow at the Peterson Institute for International Economics (1997 - present, deputy director 2007 - 2009). He also sits on the panel of economic advisers to the United States Congressional Budget Office.[1]

Posen's other positions include being a member of the Council on Foreign Relations and theTrilateral Commission, a research associate of the Center for the Japanese Economy and Business of Columbia University, a fellow of the CESifo Research Network.[2]He has been the recipient of major research grants from the European Commission, the Sloan Foundation, the Ford Foundation, and the German Marshall Fund of the United States. He is currently married and living in London.[1]

.....................................

I wonder whose interests Posen represents on the rate setting committee? The UK, the US, the CFR, the Trilateral Commission, all or none of these?

There is no doubt that for the US to get away with the financial shit that they do then the more other countries follow their ludicrous lead into de-industrialization and debt the longer they can get away with it.

Edited by OnlyMe

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The Japanese are only starting to cash-out aren't they?

Where's Sceppy when you need a demographic profile.

japan-debt-16-7.jpg

i have my doubts about 45million in 2105 though, i think it will be closer to 47m :D

Edited by Tamara De Lempicka

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I Don't think they will target the housing Market. So far I get the feeling that the coalition understand what needs to happen for a long term recovery. I think they will specifically target business lending/investment as this is what the economy really needs not endless HPI.

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yep, i keep asking the other half if i can go over there and do my bit for the sake of Japanese kind, but shes not buying it

It wouldnt surprise me to see the Japanese have a go at immigration.

I know they tried it with the Brazilians. I suspect they might cast the net wider to Maidstone.

Edit: I've just appreciated the joke.

Edited by Alan B'Stard MP

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It wouldnt surprise me to see the Japanese have a go at immigration.

I know they tried it with the Brazilians. I suspect they might cast the net wider to Maidstone.

Edit: I've just appreciated the joke.

They may be desperate but they ain't that stupid.

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I Don't think they will target the housing Market. So far I get the feeling that the coalition understand what needs to happen for a long term recovery. I think they will specifically target business lending/investment as this is what the economy really needs not endless HPI.

Best way to help business is cut red tape. Next to that, cut taxes, especially jobs tax. To target specific sectors, or the perennial issue of small businesses having difficulty raising finance, give tax incentives to invest in such areas.

Housing has clearly consumed far too much of our investment and needs the opposite: removal of perverse incentives.

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However, further quantitative easing may see diminishing returns in stimulating growth.

................................

US officials are contemplating further quantitative easing if the economic outlook darkens, but policymakers may eventually need to find other tools.

You mean something not so subtle as trillions of QE?

FFS

:o

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Mr Posen defined credit easing as the targeting specific sectors, such as the United States did with housing markets.

To get an idea of what might be coming should we review what the US did. Although I'm struggling to see which part of what they did to stimulate housing might be actually classed as "credit easing"

I know there was a tax break for home buyers and also a scheme for changing the conditions of the mortgage, but I wouldn't class these schemes as "credit easing", they are more fiscal measures

Were there any other measures?

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I Don't think they will target the housing Market. So far I get the feeling that the coalition understand what needs to happen for a long term recovery. I think they will specifically target business lending/investment as this is what the economy really needs not endless HPI.

...I agree, why would a bank require a house as collateral when they have the government in the form of enterprise finance guarantee. ;)

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  • 244 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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