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Realistbear

Banks Have Been Funding Stealth Q E 2

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http://www.telegraph.co.uk/finance/economics/gilts/8550716/Banks-buy-bulk-of-39.8bn-of-new-gilts.html

Banks buy bulk of £39.8bn of new gilts
Britain's banks have emerged as by far the largest buyers of Government debt in the last six months, as demand from other UK investors and foreign buyers fell away.
Banks bought 91pc of the £39.8bn of net issuance of new gilts with purchases totalling £36.1bn, compared to the £11.4bn of UK debt bought in the preceding six months.
The scale of the buying of UK Government debt was revealed in figures published on Wednesday by the Bank of England, which show the increased dependency of the gilt market purchases by the country's major banks.
Simon Ward, chief economist at Henderson Global Investors, said the actions of the banks was in affect delivering a second round of quantitative easing for the economy..../
On top of this, the
reduced demand in the private sector for borrowing
has also left banks with a need to find alternative ways to generate a return as holding large amounts of cash on their balance sheets is expensive for banks.

The entire UK Plc fiasco is coming to tears. The "we are in it together," "austerity" and banksters bonuses circus is about to be shut down. The nation is bankrupt morally and economically. Everything is out of control.

So the banks are blamed for not lending and reality is that the private sector has no deisre for more debt. Time to abandon Gordon's policy that debt is necessary for growth?

Edited by Realistbear

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Bankrupt of englnd - "we are targeting inflation two years out".

Johnny foreigner - Buuuuullllllllshit.

The central bank meddling and interference and destruction of the economy is nearing totality.

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Bankrupt of englnd - "we are targeting inflation two years out".

Johnny foreigner - Buuuuullllllllshit.

The central bank meddling and interference and destruction of the economy is nearing totality.

When Johnny Foreigner starts unloading our bonds IR will soar.

Tick tock tick tock

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They might kickstart lending again of they give the borrower a rate that is close to Merv's central wonder rate!!

0.3% APR might do it..................but at 12%+, it looks like the banks are losing the plot.......... :blink:

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When Johnny Foreigner starts unloading our bonds IR will soar.

Tick tock tick tock

This is very much the problem for the banks. If interest rates rise, bonds fall, and that means that the capital on the banks balance sheet, if they have any, shrinks. Next thing you know is you have a run on the bank, with those in the know at the front of the queue.

At least in this country, they can print some new notes, and defeat a mass run that way, though at a terrible cost through inflation.

At their current lofty values, and with the budget deficit completely untamed, gilts do not look like good value to me.

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When Johnny Foreigner starts unloading our bonds IR will soar.

Tick tock tick tock

Print more money to bring them back down then.

Hyperinflation - 100% guaranteed.

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Woah, woah! let us not be hasty......

Can we carry on letting realistbear make the case for hyperinflation please?

We aren't going to have hyperinflation... we are a net importer of everything. If inflation hit 50% everyone would simply starve/freeze to death.

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We aren't going to have hyperinflation... we are a net importer of everything. If inflation hit 50% everyone would simply starve/freeze to death.

Why do you think that's impossible?

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  • 284 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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