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INFLATION!!!

If the credit they create isnt going on increasing productivity, then its going on speculation. Which is just another word for inflation.

Its easy to say 'bailing out the banks has made the taxpayer a profit' when the value of a pound is half would it would have been had they been allowed to fail. Of course, 99.9% of the public will never cotton on to this.

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INFLATION!!!

If the credit they create isnt going on increasing productivity, then its going on speculation. Which is just another word for inflation.

Its easy to say 'bailing out the banks has made the taxpayer a profit' when the value of a pound is half would it would have been had they been allowed to fail. Of course, 99.9% of the public will never cotton on to this.

Not if you are working and saving for a house in the UK? Where I am rents are dropping to nearly late 90`s levels and flats are hitting 70k.

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Caught this on the radio today whilst driving - very good though why they are only cottoning on to the realities of QE and financial repression now is a bit puzzling. Plenty on HPC and like-minded commentators (Keiser, Moneyweek, Schiff etc) have been saying this for years.

I noticed lots of Keiser-isms being used, i.e. 'casino banking' 'crony capitalism'.

Still, very good to hear it spelled out on the mainstream media. Hopefully it will make some people wake up. I get the impression that savers and pensioners are starting to realise en-masse just how badly they have been rogered. Actually, anyone earning a wage and not in a fantastical amount of debt has been done over to save the banksters.

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Caught this on the radio today whilst driving - very good though why they are only cottoning on to the realities of QE and financial repression now is a bit puzzling. Plenty on HPC and like-minded commentators (Keiser, Moneyweek, Schiff etc) have been saying this for years.

I noticed lots of Keiser-isms being used, i.e. 'casino banking' 'crony capitalism'.

Still, very good to hear it spelled out on the mainstream media. Hopefully it will make some people wake up. I get the impression that savers and pensioners are starting to realise en-masse just how badly they have been rogered. Actually, anyone earning a wage and not in a fantastical amount of debt has been done over to save the banksters.

Not sure I agree with that. Being a debt serf for life is probably one of the worst fates I could imagine, and as said repeatedly on here, if you are earning and saving in the UK for a house in the UK you are not losing, as outside all but the most fantastical (media) imaginations house prices are falling.

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Yes. Why now.

Is it so that the BBC can try to retain some credibility as "honest and informative" amongst the general populace despite being so very late to "reveal" stuff.

Maybe they feel obliged to say something (albeit often at a comedial superficial level) seeing as its starting to become common knowledge.

So why now and why at all seeing as they've been so dilatory in clarifying stuff in the past.

Edited by billybong

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[/b]

Not sure I agree with that. Being a debt serf for life is probably one of the worst fates I could imagine, and as said repeatedly on here, if you are earning and saving in the UK for a house in the UK you are not losing, as outside all but the most fantastical (media) imaginations house prices are falling.

+1

Easy to lose sight of against the relentless barrage of HPI propaganda but still broadly true for most of the country outside of London, and even there income multiples suggest that most of the price action is being driven by hedge funds and the like. Net borrowing nationally is flat or negative. Gilt yields and SVRs are ticking irresistibly upwards. The grand experiment with Quantitative Easing has been a colossally expensive mistake. As creditors and savers we've been no more seduced by Osborne's false promises than we were by Brown's, moreover we've retained the most important freedom of all - optionality. Where and when we invest, spend or save is still ours to choose.

.

Edited by zugzwang

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The grand experiment with Quantitative Easing has been a colossally expensive mistake.

.

Don't agree with you there.

In the old normal we didn't need QE because the money supply was increasing through bigger and bigger debt.

Once you have increased the debt to total debt saturation then I think ZERP+QE is the new normal. Without increasing money supply companies can't make a profit (on aggregate) so there is no point in investing.

We have got QE+Zerp forever or until someone press the reset button.

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Don't agree with you there.

In the old normal we didn't need QE because the money supply was increasing through bigger and bigger debt.

Once you have increased the debt to total debt saturation then I think ZERP+QE is the new normal. Without increasing money supply companies can't make a profit (on aggregate) so there is no point in investing.

We have got QE+Zerp forever or until someone press the reset button.

QE is debt.

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Maybe the City's served its purpose and they're about to press the reset button - and maybe that answers the question why now. Who knows?

The market is pressing the reset button. It can no longer absorb the volumes sovereign debt and liquidity that the central banks are continuously creating

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Indeed. The only difference between QE and previous expansions of the money supply is QE is forced by govt.

QE isn't debt, it's a mechanism for artificially lowering the cost of debt.

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.......who wants free money?....fill your boots. ;)

Use the borrowed money to pay the borrowed debt interest.......then borrow some more....debt will always die with you....the dead can't repay their debt.

Edited by winkie

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QE isn't debt, it's a mechanism for artificially lowering the cost of debt.

I'm with you on that. Would love to Know why posters think QE is debt?

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QE is debt.

Nah not really.

The gov says it is. But what's happening to the "profit" the BoE makes from QE? ....It's being given back to the gov to spend.

There will be no unwinding of QE. The debt will be quietly written off at some point in the future, i.e. monetized.

The government is doing something akin to what the positivemoney people want, with one big difference. Instead of the money being created and spent at the bottom economic pyramid and thus benefiting wider society, its being printed and given to the banks where it acts to boost asset and commodity prices. Instead of QE being a benefit and making wider society more prosperous it's done exactly the opposite because of the way its been implemented.

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Nah not really.

The gov says it is. But what's happening to the "profit" the BoE makes from QE? ....It's being given back to the gov to spend.

There will be no unwinding of QE. The debt will be quietly written off at some point in the future, i.e. monetized.

The government is doing something akin to what the positivemoney people want, with one big difference. Instead of the money being created and spent at the bottom economic pyramid and thus benefiting wider society, its being printed and given to the banks where it acts to boost asset and commodity prices. Instead of QE being a benefit and making wider society more prosperous it's done exactly the opposite because of the way its been implemented.

QE is electronic money printing. The newly created cash is deposited into accounts that the primary dealing banks maintain with the Bank in exchange for govt bonds (or mortgage backed securities in the case of the US). These asset purchases are generally bought above par from the commercial lenders, the net difference providing recipients with reserves they can either lend out as margin to their biggest hedge fund customers or leverage on their own account. This injection of capital is obviously inflationary. The 'profit' the BoE makes is simply the interest it receives twice yearly from the Treasury as a holder of Gilts. Osborne's decision to return the money to the Treasury is a political stunt designed to flatter his borrowing figures.

Theoretically QE is straightforward to reverse, and that was the principal reason given for its adoption. In reality, as you say, the likelihood of it being unwound is probably nil. Another bail out for the banksters paid for by the taxpayer through general inflation.

.

Edited by zugzwang

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About 12 minutes into the OP video they claim:

Annuity rates have dropped about 25% in the last 4 years but the BoE claims that QE supports assets like shares that pension funds invest in - so that offsets and balances it.

So that's reported without comment but the stock market has gone next to nowhere for about 13 years since year 2000,

Seems the reporters fell for the BoE's weasel words.

Edited by billybong

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About 16.15 minutes in:

It's just unacceptable that bailed out banks being given virtually free money (QE) are allowed to buy and own physical assets such as aluminium etc - as claimed in the video.

Edited by billybong

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My view for what its worth, QE will not be unwound because the debt will blow up in their faces way before they get around to it.

It's a worthwhile consideration. If it looks like we're going to default why bother trying to reverse QE? Let it serve as a springboard to a hyperinflation instead...

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It's a worthwhile consideration. If it looks like we're going to default why bother trying to reverse QE? Let it serve as a springboard to a hyperinflation instead...

QE = panic about the failure to increase velocity of money.

In my view that is a long-term trend that everyone has to live with - not just the UK but surplus states too.

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Nah not really.

The gov says it is. But what's happening to the "profit" the BoE makes from QE? ....It's being given back to the gov to spend.

There will be no unwinding of QE. The debt will be quietly written off at some point in the future, i.e. monetized.

The government is doing something akin to what the positivemoney people want, with one big difference. Instead of the money being created and spent at the bottom economic pyramid and thus benefiting wider society, its being printed and given to the banks where it acts to boost asset and commodity prices. Instead of QE being a benefit and making wider society more prosperous it's done exactly the opposite because of the way its been implemented.

Exactly. The QE dilutes the value of savings, cash, pension funds, etc.

Extra money appears in the Government's coffers.

In other words, it is inflationary.

In other words it is a tax on savings, cash, pension funds, etc.

Most people look at their savings, wonder why it isn't enough, and are too thick to understand where (the value) of their money went.

It went to the powerful and wealthy who used it to buy physical assets such as property.

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth.

. . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose.

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