interestrateripoff Posted September 19, 2011 Share Posted September 19, 2011 (edited) http://www.telegraph.co.uk/finance/financialcrisis/8772445/QE-saved-Britain-from-double-dip-recession-says-Bank-of-England.html Calculating the impact of QE on the economy for the first time, the Bank said the stimulus programme had a peak effect of boosting output by up to 2pc. As growth in 2010 was 1.4pc and is expected to be just 1.3pc this year, the calculations show the UK would have suffered a deeper slump or a double-dip without the unorthodox money-printing programme. Even after QE, the economy is still 2.8pc smaller than it was before the recession.At the same time, QE increased UK household wealth by about 16pc – principally by lifting share prices, according to the paper published in the Bank's Quarterly Bulletin. However, despite boosting asset-based wealth, QE appears to have hurt households' disposable income. The Bank said money-printing has added up to 1.5 percentage points to inflation, which is currently 4.5pc and contributing to the steepest decline in spending power in 34 years. The impact on inflation was equivalent to a cut in interest rates of between 1.5 and 3 percentage points. Evidence that QE works could prove timely. Pressure is building on the Bank's Monetary Policy Committee (MPC) to embark on a second wave of asset purchases, both from politicians and worsening economic indicators, despite inflation being more than double its 2pc target. Excellent news the BoE saved us all.... QE was about saving the bankers, they haven't saved us from a double dip they've just made the problems worse and the eventual bust even bigger. The system needs purging of all the crap that's floating about and the BoE is keeping the drain blocked to ensure we all have a nice swim in it. Looks like another round of QE is coming... Edited September 19, 2011 by interestrateripoff Quote Link to comment Share on other sites More sharing options...
thod Posted September 19, 2011 Share Posted September 19, 2011 Take the statement "QE saved us from an invasion of dragons". Since no dragons have been seen, it must be true. Perhaps the dragons did not invade because there are no dragons and thus we would have been safe regardless of QE. We have no evidence at all there would have been a double dip without QE, nor any evidence that it made any difference. Quote Link to comment Share on other sites More sharing options...
scrappycocco Posted September 19, 2011 Share Posted September 19, 2011 If QE worked, why do they need to do it again? Quote Link to comment Share on other sites More sharing options...
Dorkins Posted September 19, 2011 Share Posted September 19, 2011 One day people will look back at articles like this and smile at the quaintness of believing that a few chaps in an office can increase the economy's ability to deliver real, valuable goods and services by 2% simply by typing a few ones and zeros into a computer. All they are measuring is the inflation that they themselves are creating. Quote Link to comment Share on other sites More sharing options...
dammfoolman Posted September 19, 2011 Share Posted September 19, 2011 (edited) Looks like another round of QE is coming... Please Please Please not before October! Have a bond maturing and need to add to my ever increasing gold and baked bean supply .. Edited September 19, 2011 by dammfoolman Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted September 19, 2011 Share Posted September 19, 2011 QE might have saved the economy from entering a deeper recession, at that time, but it will not stop the double dip and if anything it will make it worse because the pound in our pockets is worth so much less now. They did give lots of free cash to their mates in the city though. Well done them. Quote Link to comment Share on other sites More sharing options...
Traktion Posted September 19, 2011 Share Posted September 19, 2011 (edited) QE may have saved us from a GDP figure dropping a bit. Does that mean that all of our lives are improved because of it? Of course not. EDIT: To add, the government seems obsessed with various metrics, when they only represent one of many elements which improve the standard of living. Would having more free time improve my life? Certainly! Would it improve GDP? Unlikely. That doesn't mean that having more free time is bad... it just means that GDP isn't the panacea of measurements for human happiness. Edited September 19, 2011 by Traktion Quote Link to comment Share on other sites More sharing options...
Allthatglitters Posted September 19, 2011 Share Posted September 19, 2011 So what.! it's a bit like saying a large injection of heroin saved a junkie from withdraw symptoms. Quote Link to comment Share on other sites More sharing options...
Riedquat Posted September 19, 2011 Share Posted September 19, 2011 QE may have saved us from a GDP figure dropping a bit. Does that mean that all of our lives are improved because of it? Of course not. EDIT: To add, the government seems obsessed with various metrics, when they only represent one of many elements which improve the standard of living. Would having more free time improve my life? Certainly! Would it improve GDP? Unlikely. That doesn't mean that having more free time is bad... it just means that GDP isn't the panacea of measurements for human happiness. +1, this economic obsession is pointless (and GDP is one of the worst - at least GDP per capita would tell you something). It's at best just part of a means to an end. People certainly don't seem to have got happier in the last 50 years or so, which really makes me question "What's the point?" of every change we've made since then other than ones forced by circumstances. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted September 19, 2011 Share Posted September 19, 2011 Just because QE might have helped plaster over the cracks 2-3 years ago doesn't mean it is going to sort out the underlying structural issues this time (as it certainly didn't last time, as it just allowed the can to be kicked down the road...) http://www.telegraph...of-England.html Excellent news the BoE saved us all.... QE was about saving the bankers, they haven't saved us from a double dip they've just made the problems worse and the eventual bust even bigger. The system needs purging of all the crap that's floating about and the BoE is keeping the drain blocked to ensure we all have a nice swim in it. Looks like another round of QE is coming... Quote Link to comment Share on other sites More sharing options...
inflating Posted September 19, 2011 Share Posted September 19, 2011 One day people will look back at articles like this and smile at the quaintness of believing that a few chaps in an office can increase the economy's ability to deliver real, valuable goods and services by 2% simply by typing a few ones and zeros into a computer. All they are measuring is the inflation that they themselves are creating. +1 fao Mervyn, Dave and George - the UK's queaser geezers, a suggestion: QE - you can give it up anytime, can't you? Quote Link to comment Share on other sites More sharing options...
erranta Posted September 19, 2011 Share Posted September 19, 2011 http://www.telegraph...of-England.html Excellent news the BoE saved us all.... QE was about saving the bankers, they haven't saved us from a double dip they've just made the problems worse and the eventual bust even bigger. The system needs purging of all the crap that's floating about and the BoE is keeping the drain blocked to ensure we all have a nice swim in it. Looks like another round of QE is coming... And another way of looking at it Bank of England would not be saving us from anything if they had kept Blair Brown and the City under proper control or spilt the beans on what they were up to! And they knew exactly what the illusion of Browns Boom and deregulation was going to lead to. They satisfied themselves with Gongs for failure - their rewards from their 'Temple' Heaven Boosted their own personal Pensions Walk away quietly in semi-obscurity to mull over the huge disservice and damage they have done to the British Population and wallow in their pay-offs from their hidden, private B.O.E. masters Quote Link to comment Share on other sites More sharing options...
MrFlibble Posted September 19, 2011 Share Posted September 19, 2011 (edited) Just because QE might have helped plaster over the cracks 2-3 years ago doesn't mean it is going to sort out the underlying structural issues this time (as it certainly didn't last time, as it just allowed the can to be kicked down the road...) It's a pure game of bluff now, QE providing the magical chips to bet with, the hand we are holding is this... There's an infinite number of betting rounds in this game and nobody wants to see the flop so they just keep betting in the hope the game will continue indefinitely. Greece is sat at the table, but seems to keep running out of chips, this is because they foolishly don't have control of their own monetary system backed by a magical printing press. America is also sat at the table and keeps blowing cigar smoke in everyone's face, stood behind America are a collection of shady looking geezers with big guns. If only someone would call this rotten game... Edited September 19, 2011 by MrFlibble Quote Link to comment Share on other sites More sharing options...
plummet expert Posted September 19, 2011 Share Posted September 19, 2011 One day people will look back at articles like this and smile at the quaintness of believing that a few chaps in an office can increase the economy's ability to deliver real, valuable goods and services by 2% simply by typing a few ones and zeros into a computer. All they are measuring is the inflation that they themselves are creating. Very well put! How they can claim that by simply buying UK's maturing debt mountain with fake electronic credits will have saved a double dip is almost insane. It will have prevented the national debt appearing to be higher than the current ONE TRILLION plus, but it will be paid for with inflation. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted September 19, 2011 Share Posted September 19, 2011 didnt need QE at all...its pretend money, so why bother with it, when you can have a SEO in stats add a couple of "adjustments" to the figures. reality remains unchanged in either case. Quote Link to comment Share on other sites More sharing options...
R K Posted September 19, 2011 Share Posted September 19, 2011 The impact on inflation was equivalent to a cut in interest rates of between 1.5 and 3 percentage points. Quote Link to comment Share on other sites More sharing options...
'Bart' Posted September 19, 2011 Share Posted September 19, 2011 However, despite boosting asset-based wealth, QE appears to have hurt households' disposable income Appears? These intellectual giants never cease to impress me with their lucid grasp of the situation. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted September 19, 2011 Share Posted September 19, 2011 "Up to 2pc" GDP for £200bn Is it value? Quote Link to comment Share on other sites More sharing options...
Lepista Posted September 19, 2011 Share Posted September 19, 2011 (edited) So, household wealth has improved, but disposable income is worse... Run that past me gain, someone? Oh, and... the article says that QE prevented a double dip recession - it's actually caused it, surely? If there were no QE, then we'd still be in the same recession? Edited September 19, 2011 by Lepista Quote Link to comment Share on other sites More sharing options...
christhpc Posted September 19, 2011 Share Posted September 19, 2011 Ahhh cheers for that Merv and chums, £ to yen now below 120, even lower than the depths of the 2008 crash ... below 120 for the first time ever? Quote Link to comment Share on other sites More sharing options...
bomberbrown Posted September 19, 2011 Share Posted September 19, 2011 <br />Take the statement "QE saved us from an invasion of dragons". Since no dragons have been seen, it must be true. Perhaps the dragons did not invade because there are no dragons and thus we would have been safe regardless of QE. We have no evidence at all there would have been a double dip without QE, nor any evidence that it made any difference.<br /><br /><br /><br />A similar meme. A man is seen by his neighbour spreading Marmite all over the top of his fence: Neighbour - "Why are you spreading Marmite on your fence?" Man - "To keep the elephants away" Neighbour - "But there are no elephants around here" Man - " See! It really works!!" Quote Link to comment Share on other sites More sharing options...
LJAR Posted September 19, 2011 Share Posted September 19, 2011 QE may have saved us from a GDP figure dropping a bit. Does that mean that all of our lives are improved because of it? Of course not. EDIT: To add, the government seems obsessed with various metrics, when they only represent one of many elements which improve the standard of living. Would having more free time improve my life? Certainly! Would it improve GDP? Unlikely. That doesn't mean that having more free time is bad... it just means that GDP isn't the panacea of measurements for human happiness. GDP is also biased to favour government spending, since any govt spending goes straight on to GDP. If you look at gdp minus government spending, on a per capita basis, we have been in a recession since 2006. Quote Link to comment Share on other sites More sharing options...
Superted187 Posted September 19, 2011 Share Posted September 19, 2011 Channel 4 news just now - going over the Lib Dem conference after Vince Cable suggested that the BOE should get on with more QE. Faisal Islam just said that "The money from previous QE actions didn't end up in the hands of small businesses... and in some cases it even pushed prices up" Quote Link to comment Share on other sites More sharing options...
otters Posted September 19, 2011 Share Posted September 19, 2011 Of course it did, and round three will stave off a treble dip, and on and on it will have to go. So by the time we reach crash speed we will be hurtling along. Quote Link to comment Share on other sites More sharing options...
otters Posted September 19, 2011 Share Posted September 19, 2011 Of course it did, and round three will stave off a treble dip, and on and on it will have to go. So by the time we reach crash speed we will be hurtling along. Quote Link to comment Share on other sites More sharing options...
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