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Market Turmoil Reveals Risks Of Money-Printing And In-Coming Carney Should Hold Off

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Market turmoil reveals risks of money-printing and in-coming Carney should hold off

http://www.dailymail.co.uk/money/news/article-2345633/COMMENT-Market-turmoil-reveals-risks-money-printing.html

Edit:

No chance.

If the Fed taper and raise rates, could Carney avoid printing but get a similar effect anyway? Falling Sterling (vs. Dollar).

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not sure why Carney is tarred with the printing brush.

He is at the BoE, one of the oldest and proudest money institutions ever to have existed.

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Market turmoil reveals risks of money-printing and in-coming Carney should hold off

http://www.dailymail.co.uk/money/news/article-2345633/COMMENT-Market-turmoil-reveals-risks-money-printing.html

Edit:

No chance.

I'll go out on a limb here and state that the Queen will visit Carney shortly after he starts his new job.

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If the Fed taper and raise rates, could Carney avoid printing but get a similar effect anyway? Falling Sterling (vs. Dollar).

No. The exchange rate is secondary. The BoE prints to finance the deficit at a reasonable coupon. If the DMO sold all the debt open bid then we'd have to pay much more than 2% for the privilege. Should the Fed taper Gilt yields will rise - the yield on the 10yr is already at a two year high following Benny's FOMC speech - making the need to print even more urgent. As long as the UK continues to run primary deficits of 5+% then the Carney will print, IMHO.

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No. The exchange rate is secondary. The BoE prints to finance the deficit at a reasonable coupon. If the DMO sold all the debt open bid then we'd have to pay much more than 2% for the privilege. Should the Fed taper Gilt yields will rise - the yield on the 10yr is already at a two year high following Benny's FOMC speech - making the need to print even more urgent. As long as the UK continues to run primary deficits of 5+% then the Carney will print, IMHO.

Cheers for explaining, makes sense. The deficit means there's no escape.

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Comment section: almost nothing. When it's not about immigrants/scroungers/lefties/muslims/blacks the DM readers haven't a clue.

Seems a bit harsh. Lots of suitable comment now - eg:

Carney's agenda ... create property bubble, create inflation, print and then print some more ... it might work this time without crashing the economy. Hasn't worked before but this time it will be different, Merv just didn't print enough. If the economy is stalled; print, if the economy is recovering; print. The answer is always print.

- John , London, 21/6/2013 11:26

.Sterling will crash and even go sub Euro. It is inevitable. Interest rates WILL not go up even if they should. The powers dont want to precipitate a housing crash, better to inflate away debt and screw savers instead.

- Roger , Alton, 21/6/2013 10:36

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Having already created £375billion out of thin air, there is plenty of money in the economy now. It is just not in the right places.

^

^

;)

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Seems a bit harsh. Lots of suitable comment now - eg:

Carney's agenda ... create property bubble, create inflation, print and then print some more ... it might work this time without crashing the economy. Hasn't worked before but this time it will be different, Merv just didn't print enough. If the economy is stalled; print, if the economy is recovering; print. The answer is always print.

- John , London, 21/6/2013 11:26

.Sterling will crash and even go sub Euro. It is inevitable. Interest rates WILL not go up even if they should. The powers dont want to precipitate a housing crash, better to inflate away debt and screw savers instead.

- Roger , Alton, 21/6/2013 10:36

Good luck with the inflating away debt bit.

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.Sterling will crash and even go sub Euro. It is inevitable. Interest rates WILL not go up even if they should. The powers dont want to precipitate a housing crash, better to inflate away debt and screw savers instead.

- Roger , Alton, 21/6/2013 10:36

What is the chance of sterling crashing compared to what would happen if we moved into Euro assets then the Eurozone collapsed? Those Euros will be swapped for Pesetas and Cyprus pounds/ DM's and they will sure to devalue.

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Good luck with the inflating away debt bit.

How is cost of living inflation/debt inflation running alongside pay deflation the big masterplan from the boe and treasury?

Would'nt the uk have to follow the feds lead if it raised IR?

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How is cost of living inflation/debt inflation running alongside pay deflation the big masterplan from the boe and treasury?

Would'nt the uk have to follow the feds lead if it raised IR?

It makes UK more competitive :-)

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I gotta say, i dont understand all this talk of tapering. I really thought we would have to end up with unprecented fuel, food and heating prices in the US before they reign in spending. Food might be expensive, but fuel isnt at record highs in the US, and heating costs, with a gas boom in the US are actually quite low.

They seem to have achieved (from their POV) more good than bad. Yes, unemployment isnt falling, and purchasing power is being destroyed. But the deficits are allowing them to ensure the public sector dont strike (too much) pacify the unemployed, and most the employed are just happy that they have a job to be worried with purchasing power. They have put a floor under asset prices (much as it annoys me) and inflation and inflation risk seems to have fallen (as indicated by gold) from the 2011 period.

Unless they know something we dont?

In the end, I guess we have to watch what they do, not what they say. All this talk of tapering could be a bluff and end in nothing.

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  • 261 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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