Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

More Qe Would Help, Insists Rate-Setter Martin Weale

Recommended Posts

http://www.telegraph.co.uk/finance/economics/8722202/More-QE-would-help-insists-rate-setter-Martin-Weale.html

In a speech to the Doncaster Chamber of Commerce, Mr Weale, a member of the Bank’s Monetary Policy Committee, rejected suggestions that the Bank has exhausted its ammunition by slashing rates to an historic low of 0.5pc and printing £200bn.

Critics claim that more quantitative easing (QE) would be fruitless as yields on government debt are already at record lows, leaving policymakers little scope to bring down borrowing rates to households and business.

“We are frequently reminded that gilts yields are at record lows; this is, however, true only of short and medium dated stock” Mr Weale said.

“At the long end of the market, yields are not historically low... [They] are well above the levels reached in the middle of the last century; there is undoubtedly scope for further asset purchases to trigger further reductions in yields on government debt should the need arise.”

Mr Weale’s backing for QE is significant because until this month, he was calling for an immediate quarter point rise in interest rates. He explained in his speech that his position has changed due to the “weaker economic outlook” globally – particularly in the euro area, which accounts for 43pc of UK exports.

.......

However, he stressed that, although he thinks QE would work, he does not currently think it is necessary. “I do not think our August forecast or the more recent market movements since then as yet make a case for such a policy,” he said.

“Although the economy is weaker than we would like, business surveys do not suggest the picture is, at present, like that of the summer of 2008. Indeed the most recent CBI survey of manufacturers pointed to some improvement in August.”

More QE would help the UK by reducing 10-year or even longer dated government debt from current levels of 3.5pc or 4pc and above.

“[Resulting] higher asset prices and lower interest rates are likely to support business investment. The extra demand which results will both support output and help to underpin the rate of inflation,” he said, adding that QE would also “provide further support to consumer spending”.

Clearly the way out is to print even more money...

Share this post


Link to post
Share on other sites

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

"Dr. Martin R. Weale CBE (born 1955) is a British economist. On 5 July 2010 it was announced that he would join the Bank of England's Monetary Policy Committee, replacing Kate Barker.[1] Since 1995, he has also held the position of director at the National Institute of Economic and Social Research (NIESR).[1] He is an alumnus of Clare College, Cambridge, where he qualified for an MA in Economics, with first-class honours.[2] He was made a Commander of the British Empire in 1999 for services to economics.[2]

At NIESR, he has "written hundreds of studies and reports for a wide range of bodies and governments". His latest paper for the European commission argued that "Britain's long boom under Labour was based on unsustainable consumption", which proved unpopular with the party. His views are thought to be generally in line with coalition government's, saying, "the budget deficit has to be closed at some point ... You cannot put it off forever on the grounds that the economy might never be able to stand it."[3]"

Never lived in the real world. probably can afford Bread.

Share this post


Link to post
Share on other sites

200px-Pringles.svg.png

"Once you pop, you can't stop"

It's immoral to print your debts away.

The alternative is for the government to run a surplus, by cutting government spending, and pay off its debts.

Can the government do this?

Share this post


Link to post
Share on other sites

It's immoral to print your debts away.

The alternative is for the government to run a surplus, by cutting government spending, and pay off its debts.

Can the government do this?

I don't think they'd get elected.

Another party would say they could do that and more, especially with the right sort of investment.....

Share this post


Link to post
Share on other sites

It's immoral to print your debts away.

The alternative is for the government to run a surplus, by cutting government spending, and pay off its debts.

Can the government do this?

Because of the way the monetary system works if the government runs a surplus others must run a deficit, i.e. increase their debts.

Are you ready to do your patriotic duty? To debt-spend for queen and country?

Share this post


Link to post
Share on other sites

I don't think they'd get elected.

Another party would say they could do that and more, especially with the right sort of investment.....

Too right they wouldn't get re-elected. But Liberals are used to being 100 years between governments.

They could do it, drive the Tories to far deeper cuts, run a surplus and pay off the debts. And take all the blame, leaving the government in a much better position.

The reality is the Liberals are going to take the blame anyway. Things are going to get worse and labour supporters are going to do most of the suffering, that's Tory policy. No chance of a land tax for example. Labour supporters will go back to voting labour, leaving the liberals with ten seats. So IMO they should do the cuts, not merely reduce the deficit slightly.

Share this post


Link to post
Share on other sites

Because of the way the monetary system works if the government runs a surplus others must run a deficit, i.e. increase their debts.

Are you ready to do your patriotic duty? To debt-spend for queen and country?

Not correct. If the government cuts down on the number of snouts in the public trough, say by half, a lot of ex public employees and contractors will face bankruptcy, but no one else will have to increase their debts. This is only an illustration. In essence, government spending is consumption, although everyone pretends it's production.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.