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silver surfer

Qe For The People

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http://www.voxeu.org/article/combatting-eurozone-deflation-qe-people

Interesting article, unlike George Osborne the author seems to recognise that high house prices don't necessarily translate into a booming economy,

As our research confirms, higher house prices in France and Germany reduce total consumer spending.1 In Germany, France, and Italy, higher house prices spur non-owners to save more for the mortgage down payment and inspire caution among tenants, who expect future rent hikes. And the housing wealth of existing owners does not translate into significantly higher spending

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Good find. I always felt the whole concept of QE going direct to the banks being a confused method when it could be distributed amongst the population and gain much the same effect. It's pleasing to see a think tank actually looking at it and supporting the premise with statistical evidence.

Sadly the real problem is the establishment. Why share the benefits amongst the people when we can keep it all ourselves....

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Good find. I always felt the whole concept of QE going direct to the banks being a confused method when it could be distributed amongst the population and gain much the same effect.

Whats confusing about it ? - the super rich (individuals and establishment) get their asset prices pumped and/or get access to money at super cheap IRs to lent to normal people on a healthy margin. The man on the street remains skint and so has to continue slaving away at his job while remaining to scared to pestering his boss for a pay increase. No extra money for working people means high street prices dont rise so those who are benefiting from QE see all their money have more buying power. Meanwhile all the "respected economists" and the media are telling all the people being fleeced that its some king of economic miracle for their own benefit. Its genius really.

Edited by goldbug9999

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Apparantly QE has been the equivalent of £24k for every person in the UK but in reality 95% of the funny money has gone into the hands of the top 5% which I make about £1.2k for each of 61 million and £500k each for about 3 million.

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Good find. I always felt the whole concept of QE going direct to the banks being a confused method when it could be distributed amongst the population and gain much the same effect. It's pleasing to see a think tank actually looking at it and supporting the premise with statistical evidence.

Sadly the real problem is the establishment. Why share the benefits amongst the people when we can keep it all ourselves....

QE was to preserve the wealth of the already rich not to boost the general economy.

The rest of the economy and population can go to hell in a hand cart as far as the elite is concerned.

Ladders are being pulled up, all over Europe.

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'The final factor impeding QE’s impact in the EZ is the fact that low bond yields, by increasing measured pension-fund deficits, make some companies reluctant to invest and thus more likely to raise contribution rates and limit pension benefits.'

Thanks for that silver surfer.A very interesting paper indeed.The above has always struck me as a logical consequence of QE.Noone really talks about the impact QE has on velocity but the charts are pretty clear to me.

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Whats confusing about it ? - the super rich (individuals and establishment) get their asset prices pumped and/or get access to money at super cheap IRs to lent to normal people on a healthy margin. The man on the street remains skint and so has to continue slaving away at his job while remaining to scared to pestering his boss for a pay increase. No extra money for working people means high street prices dont rise so those who are benefiting from QE see all their money have more buying power. Meanwhile all the "respected economists" and the media are telling all the people being fleeced that its some king of economic miracle for their own benefit. Its genius really.

Not really genius, more like desperation? We have deflation now anyway so it has not been a long term fix, and deflation will hurt the wealthy and help the little guy if it doesn`t get out of control? As for QE straight to the masses, it already happens in the benefits system, but any widening of the program would just further undermine belief in money and debt, and the need to work for money and pay back debt. The Rich/ elites/VI don`t want this so it won`t happen. The rich are good at exploiting whatever economic environment we have so they will benefit from central bank help and also find ways to benefit from collapse when the CB`s fumble the pass. Little guys and girls can also benefit if they keep their eye on the ball.

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From the OP's link

Combatting Eurozone deflation: QE for the people

..
€500 per citizen

..

A more reasonable option would be to provide all workers and pensioners with social-security numbers (or the local equivalent) with a payment from the ECB, which governments would merely aid in distributing. Another alternative would be to use the electoral register, a public database that the ECB could use independently of governments. Of the roughly 275 million adults in the Eurozone, some 90% are on the electoral register. Nothing in EZ law forbids the ECB from undertaking such an independent action.


It's better than giving it all to the "1%" but:

Just before or soon after the "helicopter drop" expect retailers, energy companies and the rest etc to increase prices in expectation. The money would be gone in a split second.

It would be better just to allow deflation.

Edited by billybong

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From the OP's link

It's better than giving it all to the "1%" but:

Just before or soon after the "helicopter drop" expect retailers, energy companies and the rest etc to increase prices in expectation. The money would be gone in a split second.

It would be better just to allow deflation.

Hello...... that's rather the point.

With German Bund yields negative not quite sure what the point of QE in the EZ would be for if all the ECB does is buy govt. bonds pro rata.

Osborne might indulge in some form of tax giveaway as he gets increasingly desperate in the new year though. Doubt he'd fund it by more BoE bond purchases though.

Edited by R K

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Apparantly QE has been the equivalent of £24k for every person in the UK but in reality 95% of the funny money has gone into the hands of the top 5% which I make about £1.2k for each of 61 million and £500k each for about 3 million.

£375bn divided by 64 million population is about £6k each not £24k. More like £120k for the top 3 million and £307 each for the rest.

But in reality these sort of inequality class warfare arguments really hide the truth.

I mean you could be a retail worker in the south east on £18k a year who bought a little flat at the top of the market on a northern rock 120% mortgage, blew the 20% on yourself and you've been bailed out from a position of insolvency to being able to survive. All to the tune of a few years salary when you think about getting to zero equity and having mortgage rates sub 1% for a few years. Not to mention the state supported banking sector keeping your zombie employer still going.

What we have is a system which is inherently unfair but your argument is too simple.

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Hello...... that's rather the point.

With German Bund yields negative not quite sure what the point of QE in the EZ would be for if all the ECB does is buy govt. bonds pro rata.

Osborne might indulge in some form of tax giveaway as he gets increasingly desperate in the new year though. Doubt he'd fund it by more BoE bond purchases though.

Hello.

Indeed it is the stated point of the idea but the main point that does need highlighting is that it would be of little or no benefit to the people receiving it or to the economy as a whole. The inflation would happen before or very soon after the drop so people would get little or no true benefit from it but it would really only benefit retailers and energy companies and so on who would quickly hike prices in advance or soon after accordingly. It's just more figure fiddling.

Then like QE for the "1%" so far as the economy is concerned it would be back to square one.

Edited by billybong

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Unless that also translates into employers raising nominal wages above inflation so that employees get higher real wages, rather than a one-off pulse into higher profit margins and higher prices and no long term aggregate demand increase, I don't see the net benefit. It may or may not be 'better' than equivalent asset swapping QE though.

I don't like these sort of proposals that centre on sidelining more democratic fiscal measures for technocratic pseudo fiscal (monetary) action. It leaves the populous clueless about what's going on and why, and Government ministers able to keep lying with a straight face about the effects of trying to simultaneously deleverage the public and private sectors. If Bernanke's "money-financed tax cut" is such a good idea, perhaps the first question the public should be asking and answered is why this type of fiscal deficit approach is better than another type that could be undertaken transparently by elected Governments. Or why authorities would be undertaking two contradictory measures (austerity & helicopter drops) at the same time and how the distributional effects will differ, if at all.

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I agree. Monetary policy leaves the UK populace ignorant and allows the government to get away with doing nothing ... It is all designed to avoid re-balancing money and trade between people....allows the rich to continue getting richer by refusing to trade in balance with their fellow man.

Or worse than nothing. I know we're talking about the EZ but when Osborne trumpeted about paying off war loans, and was widely reported as such, when he's actually just borrowing to refinance (ie. either full of sh!t or couldn't give one) that just summed up the entire authority attitude to public candour. Maybe helicopter drops are a great technical or economic idea, although I don't think so when wrapped up in technocracy, but I'll bet that once they've been tweaked according to national government preferences the practical effects would differ hugely from any paper concept.

Mortgage approvals - not to worry, the next funding subsidy leverage scheme, or help to let, is finally ready for rollout: FT - Ministers launch delayed loan guarantee scheme for housebuilding

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Yes Winkie....confusion reigns so it's back to basics for me....live simply....keep your head down and do what's right for your own family....trust only those who have earned it.....do your own thinking .....if it's too complicated tounderstand it's probably bulls*** and keep well away from. Politicians are the worst of the lot along with bankers......don't believe all the contradictory messages the government come up with and teach children the same to counteract the brainwashing they get from school. Most of all determine what your needs are rather then your wants then refuse to spend on unnecessary junk/cosmetic surgery/expensive bling etc.

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Yes Winkie....confusion reigns so it's back to basics for me....live simply....keep your head down and do what's right for your own family....trust only those who have earned it.....do your own thinking .....if it's too complicated tounderstand it's probably bulls*** and keep well away from. Politicians are the worst of the lot along with bankers......don't believe all the contradictory messages the government come up with and teach children the same to counteract the brainwashing they get from school. Most of all determine what your needs are rather then your wants then refuse to spend on unnecessary junk/cosmetic surgery/expensive bling etc.

Couldn't agree more... :)

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