More Qe Pressure From Adam Posen

[Tenubracon]

Adam Posen adds another BoE voice to the calls for more QE:

http://www.independent.co.uk/news/business/news/posen-pleads-for-new-stimulus-to-save-economy-and-democracy-2092488.html

The article also mentions buying mortgage books from the banks - what effect would that have on house prices, I wonder?

[Realistbear]

Looking at this I just had a vision. It was of a misty Ocean somewhere off the coast of Ireland. Coming toward us from out of the mist was this Zeppelin shaped thing. It was heading for a giant offshore wind turbine. Looking closer and I saw that the Zeppelin shaped thing was not an airship but a giant turd! The wind turbine was not one of those green energy things at all but a monster fan with blades turning at hyper speed. I wonder what the vision could possible mean?

Edited September 29, 2010 by Realistbear

[MrFlibble]

Looking at this I just had a vision. It was of a misty Ocean somewhere off the coast of Ireland. Coming toward us from out of the mist was this Zeppelin shaped thing. It was heading for a giant offshore wind turbine. Looking closer and I saw that the Zeppelin shaped thing was not an airship but a giant turd! The wind turbine was not one of those green energy things at all but a monster fan with blades turning at hyper speed. I wonder what the vision could possible mean?

Cypher: I know what you're thinking, 'cause right now I'm thinking the same thing. Actually, I've been thinking it ever since I got here: Why oh why didn't I take the BLUE pill?

[spongeh]

Cypher: I know what you're thinking, 'cause right now I'm thinking the same thing. Actually, I've been thinking it ever since I got here: Why oh why didn't I take the BLUE pill?

Cos you'd have a 3 day stiffy?

[MrFlibble]

Cos you'd have a 3 day stiffy?

Would it be as large as the one the BoE are shafting us all with though?

[fluffy666]

Looking at this I just had a vision. It was of a misty Ocean somewhere off the coast of Ireland. Coming toward us from out of the mist was this Zeppelin shaped thing. It was heading for a giant offshore wind turbine. Looking closer and I saw that the Zeppelin shaped thing was not an airship but a giant turd! The wind turbine was not one of those green energy things at all but a monster fan with blades turning at hyper speed. I wonder what the vision could possible mean?

It started in America?

[Tenubracon]

It's also in the Guardian:

http://www.guardian.co.uk/business/2010/sep/28/adam-posen-more-quantitative-easing

Inflation is not a threat, so fire up the printers!

""If there was going to be a recovery that either was inflationary or otherwise meaningfully different from that established pattern, it should have been evident by now," Posen said. "Instead, we have seen global interest rates on long government bonds, determined by forward-looking markets, at historic lows. Absent evidence of a truly different recovery, the analysis of mainstream macroeconomics should apply, as it did in Japan in the 1990s and in the US and Europe in the 1930s.

"That proven analysis tells us that, under the present circumstances, sustained high inflation is not a threat, that persistent high unemployment and output gaps are the threat, and we should take further monetary action to sustain and promote recovery."

[Pent Up]

Cos you'd have a 3 day stiffy?

Problem?

[richc]

"That proven analysis tells us that, under the present circumstances, sustained high inflation is not a threat, that persistent high unemployment and output gaps are the threat, and we should take further monetary action to sustain and promote recovery."

Does anyone know of an historical example of where massively expanding the money supply was effective in helping an economy avoid the consequences of a debt overhang? The Great Depression and Japan are constantly used as examples of where loose monetary policy supposedly wasn't employed, which lead to slow economic growth, but where's the example of where this worked? I never hear anyone cite any evidence of this being an effective strategy for cleaning up an unsustainable boom in credit growth. Am I missing something?

Edited September 29, 2010 by RichC

[Realistbear]

"That proven analysis tells us that, under the present circumstances, sustained high inflation is not a threat, that persistent high unemployment and output gaps are the threat, and we should take further monetary action to sustain and promote recovery."

Does anyone know of an historical example of where massively expanding the money supply was effective in helping an economy avoid the consequences of a debt overhang? The Great Depression and Japan are constantly used as examples of where loose monetary policy supposedly wasn't employed, which lead to slow economic growth, but where's the example of where this worked? I never hear anyone cite any evidence of this being an effective strategy for cleaning up an unsustainable boom in credit growth. I'm I missing something?

My theory is that we are in unchartered waters. This mess began with the South Sea Bubble 300 years or so ago. Banks began the great 300 year bubble by lending more than they had on deposit (fractional reserve banking--liar lending) and the whole thing began from there growing and growing until Brown gave it that final puff of air that began popping the stitches. What we had 2 years ago was the beginning of a STRUCTURAL collapse which has not happened for 300 years, after the South Sea Bubble burst. These things are not really cyclical in nature, or do not seem to be that way, because of the centuries that pass before something on a grand scale happens.

We face an unclear future but it is safe to say that what began 2 years ago is perhaps only the very beginning of what is yet to come.

http://www.historic-uk.com/HistoryUK/England-History/SouthSeaBubble.htm

Edited September 29, 2010 by Realistbear

[General Congreve]

Stop talking about it and get on with it, QE NOW!!!! DO IT!!! (Strokes golden/silvery cat)

[R K]

It looks very much like they're going to put a ceiling on yields like Benjamin.

He's nailed the problem - excess capacity - the trouble is they're looking for a monetary centric solution i.e. support asset prices rather than tackling the very obvious and necessary elephnat in the room which ain't going away which is China exporting her excess capacity to everybody else (and everybody else trying to do the same) via the currency markets.

We need China (and others) to remove their capacity and penalise them aggressively if they refuse. It's their problem and they're trying to shift it onto everyone else.

But in the meantime it looks to be going the way some of us have long thought - bumping asset prices and a lid on yields. (I'd probably include houses in that, but clearly I'd be shot at dawn, so have learned to keep my gob shut).

[babesagainstmachines]

It looks very much like they're going to put a ceiling on yields like Benjamin.

He's nailed the problem - excess capacity - the trouble is they're looking for a monetary centric solution i.e. support asset prices rather than tackling the very obvious and necessary elephnat in the room which ain't going away which is China exporting her excess capacity to everybody else (and everybody else trying to do the same) via the currency markets.

We need China (and others) to remove their capacity and penalise them aggressively if they refuse. It's their problem and they're trying to shift it onto everyone else.

But in the meantime it looks to be going the way some of us have long thought - bumping asset prices and a lid on yields. (I'd probably include houses in that, but clearly I'd be shot at dawn, so have learned to keep my gob shut).

Does everybody in the world have everything that they want?

The answer if of course a resounding no, so there is no excess capacity problem, only a wealth distribution problem.

Everything else is obfuscation, lies or stupidity.

[mikthe20]

It's also in the Guardian:

http://www.guardian....titative-easing

Inflation is not a threat, so fire up the printers!

""If there was going to be a recovery that either was inflationary or otherwise meaningfully different from that established pattern, it should have been evident by now," Posen said. "Instead, we have seen global interest rates on long government bonds, determined by forward-looking markets, at historic lows. Absent evidence of a truly different recovery, the analysis of mainstream macroeconomics should apply, as it did in Japan in the 1990s and in the US and Europe in the 1930s.

"That proven analysis tells us that, under the present circumstances, sustained high inflation is not a threat, that persistent high unemployment and output gaps are the threat, and we should take further monetary action to sustain and promote recovery."

Also in the Guardian:

Nazi £20 note on sale

A rare fake £20 note printed by the Nazis as part of a scheme to wreck the British economy is to be sold at auction for an estimated £400.

During Operation Bernhard, £134m of counterfeit notes were produced by prisoners in concentration camps.

Originally the idea was to get the Luftwaffe to drop them into Britain on the assumption that people would not be able to resist spending money that dropped out of the sky and disrupt the economy.

That plan was discounted as impractical and instead the Nazi agents were briefed to bring the fake notes into Britain.

Richard Westwood-Brookes, from auctioneers Mullock's in Ludlow, described it as an audacious plot.

He said: "They clearly believed that in addition to a physical attack on the UK they could also wreak havoc with the country's economy."

Westwood-Brookes said it was "ironic" that quantitative easing was brought in to try to ease the financial crisis.

Very few Nazi counterfeit notes are thought to have reached Britain and most were destroyed, though some continued to emerge after the war.

"These notes are incredibly rare because most were destroyed and they are quite fragile. Collectors are keen to own one of these fakes as they rarely come up for sale," added Westwood-Brookes.

The sale takes place on Thursday.

and double :angry: :angry:

Edited September 29, 2010 by mikthe20

[Alan B'Stard MP]

It looks very much like they're going to put a ceiling on yields like Benjamin.

He's nailed the problem - excess capacity - the trouble is they're looking for a monetary centric solution i.e. support asset prices rather than tackling the very obvious and necessary elephnat in the room which ain't going away which is China exporting her excess capacity to everybody else (and everybody else trying to do the same) via the currency markets.

We need China (and others) to remove their capacity and penalise them aggressively if they refuse. It's their problem and they're trying to shift it onto everyone else.

But in the meantime it looks to be going the way some of us have long thought - bumping asset prices and a lid on yields. (I'd probably include houses in that, but clearly I'd be shot at dawn, so have learned to keep my gob shut).

Racist pig.