lufc Posted December 17, 2008 Share Posted December 17, 2008 The Fed are going to do it so I think it's a fair assumption that every other CB will have to do it. A couple of questions: How do they get the money into the real economy in any other form than more debt ? As the Fed for instance effectively starts to buy its own debt, what will happen to Global bond markets and what consequences will there be for current major US Treasury holders (China for instance) ? Could this usher in a new era of global protectionism ? What will be the point of Central bank inflation targeting and rate setting policies ? Answers on a postcard please. Quote Link to comment Share on other sites More sharing options...
brassed off brit Posted December 17, 2008 Share Posted December 17, 2008 To me the "west" is trying to devalue all their currencies together, so they will print,print,print. This way a run on one currency wont happen. But it also means that the worlds biggest economy "china" and others such as the rich arab nations who hold lots of Western debt, will find their currencies rise dramatically in strength, exports decline and find the western debt is "worthless". the west is trying to get to a stage where it effectively destroys it's debt and currency so in any upturn ( whenever that is ) we will be able to convert to a manufacturing base again and export goods to grow the economy, just as china did. The banking and financial sectors are now completely buggered for a generation, manufacturing is the only way now and we cant afford a long drawn out recession so it's a quickish , savage depression they want then invest in the infrastructure to make things again. This happens time and time again in capitalism, you suck up all the worlds wealth, then effectively declare bankruptcy and start again. China does not have the experience of years of capatalism to see this coming and soon will be p1ss poor when it finds it's billions of western govt notes and bills are worth F*ck all, they have been left holding the baby and all they have to feed it is poisoined milk. It will be interesting to see how they react when they wake up to the fact they have been had!! Quote Link to comment Share on other sites More sharing options...
HAMISH_MCTAVISH Posted December 17, 2008 Share Posted December 17, 2008 the west is trying to get to a stage where it effectively destroys it's debt and currency so in any upturn ( whenever that is ) we will be able to convert to a manufacturing base again and export goods to grow the economy, just as china did. The banking and financial sectors are now completely buggered for a generation, manufacturing is the only way now and we cant afford a long drawn out recession so it's a quickish , savage depression they want then invest in the infrastructure to make things again. If by 'manufacturing' you mean skilled engineering, aerospace, etc, then you may have a point. If by 'manufacturing' you mean furniture, toys, clothes, consumer electronics, household products or even cars then you'll be dissapointed, unless you know a lot of workers willing to work for $100 a month...... Quote Link to comment Share on other sites More sharing options...
Nationalist Posted December 17, 2008 Share Posted December 17, 2008 Most likely is that HM Treasury will create gilts and sell them to the Bank of England which will pay by printing money and chalking it up under "Ways & Means" (that's like Nick Leeson's 666 acount - hides all the duff goods!) This new money will be used to balance the govt's books and not dropped from helicopters on undeserving members of the public. It would be nonsense for the BoE to claim to be trying bear down on inflation while at the same time printing money, so they've officially decided to give up on all that fighting inflation malarky. They've also decided not to report their true cash position anymore. (See my blog) Quote Link to comment Share on other sites More sharing options...
EndToBoomandBust Posted December 17, 2008 Share Posted December 17, 2008 Most likely is that HM Treasury will create gilts and sell them to the Bank of England which will pay by printing money and chalking it up under "Ways & Means" (that's like Nick Leeson's 666 acount - hides all the duff goods!) This new money will be used to balance the govt's books and not dropped from helicopters on undeserving members of the public.It would be nonsense for the BoE to claim to be trying bear down on inflation while at the same time printing money, so they've officially decided to give up on all that fighting inflation malarky. They've also decided not to report their true cash position anymore. (See my blog) How can we find out if they are managing to actually sell this debt? If they can't we are stuffed. Quote Link to comment Share on other sites More sharing options...
234SALE Posted December 17, 2008 Share Posted December 17, 2008 Basically this would you trust a tyre on a long distance run after using this? Quote Link to comment Share on other sites More sharing options...
Mike Mustard Posted December 17, 2008 Share Posted December 17, 2008 To me the "west" is trying to devalue all their currencies together, so they will print,print,print. This way a run on one currency wont happen. But it also means that the worlds biggest economy "china" and others such as the rich arab nations who hold lots of Western debt, will find their currencies rise dramatically in strength, exports decline and find the western debt is "worthless". the west is trying to get to a stage where it effectively destroys it's debt and currency so in any upturn ( whenever that is ) we will be able to convert to a manufacturing base again and export goods to grow the economy, just as china did. The banking and financial sectors are now completely buggered for a generation, manufacturing is the only way now and we cant afford a long drawn out recession so it's a quickish , savage depression they want then invest in the infrastructure to make things again. This happens time and time again in capitalism, you suck up all the worlds wealth, then effectively declare bankruptcy and start again. China does not have the experience of years of capatalism to see this coming and soon will be p1ss poor when it finds it's billions of western govt notes and bills are worth F*ck all, they have been left holding the baby and all they have to feed it is poisoined milk. It will be interesting to see how they react when they wake up to the fact they have been had!! Good post. I think this is the strategy but I do not think it will work perfectly. The Eurozone and Switzerland will not want such an aggresive devaluation of their currencies because they do not have the mountain of personal debt to wash away. This means that the pound and dollar will "suffer" more than the Euro or Swiss Franc (and a few others). Quote Link to comment Share on other sites More sharing options...
Nicholas Cage Posted December 17, 2008 Share Posted December 17, 2008 Why does the pharse use quantative because that could apply to any indicator like inflation or unemployment. Easing is just as confusing because it could be either direction. Quote Link to comment Share on other sites More sharing options...
lufc Posted December 17, 2008 Author Share Posted December 17, 2008 China does not have the experience of years of capatalism to see this coming and soon will be p1ss poor when it finds it's billions of western govt notes and bills are worth F*ck all, they have been left holding the baby and all they have to feed it is poisoined milk.It will be interesting to see how they react when they wake up to the fact they have been had!! http://www.ft.com/cms/s/0/48ac15fc-c1bc-11...?nclick_check=1 The US was lectured about its economic fragilities on Thursday as senior Chinese officials urged the administration to stabilise its economy, boost its savings rate and protect Chinese investments. Well they certainly aren't doing that !!!! Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 17, 2008 Share Posted December 17, 2008 I think you've misunderstood the idea is to get this money into the economy as DEBT. They don't want people to have this money any other way. More debt is the bankers bailout, trouble is I don't think the public is going to buy it. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted December 17, 2008 Share Posted December 17, 2008 Most likely is that HM Treasury will create gilts and sell them to the Bank of England which will pay by printing money and chalking it up under "Ways & Means" (that's like Nick Leeson's 666 acount - hides all the duff goods!) This new money will be used to balance the govt's books and not dropped from helicopters on undeserving members of the public.It would be nonsense for the BoE to claim to be trying bear down on inflation while at the same time printing money, so they've officially decided to give up on all that fighting inflation malarky. They've also decided not to report their true cash position anymore. (See my blog) This means the so needed contraction of the public sector will not happen anytime soon. So we will have a recession and a debauched currency. If they are allowed to do this, Id give the country 5 years before hyperinflation destroys the economy. Quote Link to comment Share on other sites More sharing options...
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