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Qe 2 It Is Coming But.....

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http://www.housepricecrash.co.uk/newsblog/2010/10/blog-osborne-to-support-boe-on-further-qe-30630.php

Thoughts.......................

Quote mark wadsworth said...........

QE is NOT 'pumping money into the economy' (the easiest and quickest way to do that would simply be to cut taxes*) it is a massive paper shuffling exercise between two departments in HM Treasury (Bank of England and Debt Management Office) and the commercial banks.

* Tax cuts can be 'progressive' (reduce VAT, Employer's NIC, increase personal allowance for income tax/NIC) or 'regressive' (cut VAT, higher rate tax, capital gains tax). I'd prefer a bit of both. Or even more fundamentally, tax can be made more business friendly (without reducing the total tax take) by shifting from taxes on incomes and output to taxes on consumption of LAND (and other state protected monopolies).

Any thoughts i tend to agree.

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http://www.housepric...er-qe-30630.php

Thoughts.......................

Quote mark wadsworth said...........

QE is NOT 'pumping money into the economy' (the easiest and quickest way to do that would simply be to cut taxes*) it is a massive paper shuffling exercise between two departments in HM Treasury (Bank of England and Debt Management Office) and the commercial banks.

* Tax cuts can be 'progressive' (reduce VAT, Employer's NIC, increase personal allowance for income tax/NIC) or 'regressive' (cut VAT, higher rate tax, capital gains tax). I'd prefer a bit of both. Or even more fundamentally, tax can be made more business friendly (without reducing the total tax take) by shifting from taxes on incomes and output to taxes on consumption of LAND (and other state protected monopolies).

Any thoughts i tend to agree.

It's a lie.

If the BOE exchanges freshly printed cash for a pound of ham, then yes it is just an exchange of one asset for another. But it is also money injection.

This is a standard excuses from debtor VIs to support printing and it is 100% facetious.

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We all know that the rise in prices in the last 6 months of 2009 was because of credit being made more available but does anyone have any clear understanding of how much this was due to quantitative easing and how much due to special liquidity scheme (which I believe was specifically mortgage directed and not being resurrected)?

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http://www.housepricecrash.co.uk/newsblog/2010/10/blog-osborne-to-support-boe-on-further-qe-30630.php

Thoughts.......................

Quote mark wadsworth said...........

QE is NOT 'pumping money into the economy' (the easiest and quickest way to do that would simply be to cut taxes*) it is a massive paper shuffling exercise between two departments in HM Treasury (Bank of England and Debt Management Office) and the commercial banks.

* Tax cuts can be 'progressive' (reduce VAT, Employer's NIC, increase personal allowance for income tax/NIC) or 'regressive' (cut VAT, higher rate tax, capital gains tax). I'd prefer a bit of both. Or even more fundamentally, tax can be made more business friendly (without reducing the total tax take) by shifting from taxes on incomes and output to taxes on consumption of LAND (and other state protected monopolies).

Any thoughts i tend to agree.

I also agree. For our masters to achieve their objective they need to increase monetary velocity, simply creating money out of thin air to shore up a bust banking system doesn't work. Money, make believe or not needs to enter the system and be exchanged to create growth. Unfortunately for them the deeper they delve into the unknown the worst the likely outcome will be.

Pr!cks the lot of them.

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Get ready for commodities to go through the roof.

I agree, seen the CRB chart.

QE2 + momentum could see them hurtle to previous highs. CRB massively lagging gold now.

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CRB index ready for a massive move. Several important commodities (grains etc) have been forming a base for 1-2 years - ready for push higher.

All we need now is for oil to break out (upwards).

And of course we have gold (not a commodity) ...

Edited by Errol

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We all know that the rise in prices in the last 6 months of 2009 was because of credit being made more available but does anyone have any clear understanding of how much this was due to quantitative easing and how much due to special liquidity scheme (which I believe was specifically mortgage directed and not being resurrected)?

Personally, I've never come across any convincing evidence that QE was responsible for the rally. Whilst I've heard quite a few on here make that assumption, I think there's some confusion over cause and effect: IIRC QE was introduced around the same time as base rates were dropped, stamp duty holiday (not sure when sterling was devalued?) etc. so any combination of these could have caused it.

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I also would like to see more QE funding a fiscal deficit directly. And just as it can fund stimulus spending, it can also fund stimulus tax cuts(while keeping spending the same).

I suggested to not just lower the VAT but to outright get rid of it, which would cost £75 billion a year. I view sales taxes as a great impediment to economic activity.

The other one I would like to see massively lowered is the oil tax. To do anything in the modern world takes oil, to move men and materials, to operate power tools, etc.. So first any tax on oil gets built into the cost of everything and is regressive. And secondly much economic activity becomes non-viable if the price of oil is too high, so you end up with people sitting at home.

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Personally, I've never come across any convincing evidence that QE was responsible for the rally. Whilst I've heard quite a few on here make that assumption

I think you should look at Irish and UK bond rates. This should clarify the impact a bit for you.

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  • 142 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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