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When Will Quantitative Easing Be Announced?


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Guest Steve Cook
in line 2 you say they print (future taxes)

BUT, as this is debt free money, why would they need tax revenue to cover it. It is truly, thin air money.

It is not debt free becuuse of one of two outcomes

either

the debt is repayed due to a devlaution of the exchange rate of the money in circulation

Or

The debt is repayed via taxes which, by their nature, quantitavely contract the money supply and so avoid the monetary devlauation (or at least bring it's value back up to what it was prior to recouping the debt through taxes)

There aint no such thing as a free lunch......in the end

Edited by Steve Cook
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To get interest rates to 2% they must already be using Quantitative Easing. (buying northern rock by definition is quantitative easing, as is buying shares inRBS).

If BOE cut to a US style 'zero to 0.25% range' then they would be literally fly-tipping bags of notes at the doorsteps of banks.

how much easing are you looking for?

Eventually there will be a day of reckoning and they will need to answer the question: Are you going to default or are you going to print. We can't keep putting it on the credit card.

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Guest Steve Cook
Eventually there will be a day of reckoning and they will need to answer the question: Are you going to default or are you going to print. We can't keep putting it on the credit card.

yes....

Except, of course, printing is just another form of default

Edited by Steve Cook
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It's already happening.

I think they will stay with the words, not the action, if things loosen up, as they seems to do now. Inflation fears are returning big time to the market the last 2 weeks. Deflation is soon yesterdays news. It was like the market was like all over inflation, when the bear sterns panic went on in march, driving tips yields negative, in november, desember it was regular treasuries that had negative yields. Now regular treasuries are loosing value fast, 13 % in 2 trading days, and tips are hot again. They also made empty talk in 2002-2003. It's the same situation now. However, there is maybe a stronger resemblance to 1998. even then you had deflation talk. It's like the economic professors can't understand the market, and therefore starts predicting deflation every time you have a temporary disruption, that cause everyone to hide in treasury bonds.

If we have a new war in the middle east, deflation are 100 % out of the question. But even in the absence of a war, it seems Obama have spending programs that resemble a war.

Edited by carseller
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Guest Steve Cook
It's already happening.

I think they will stay with the words, not the action, if things loosen up, as they seems to do now. Inflation fears are returning big time to the market the last 2 weeks. Deflation is soon yesterdays news. It was like the market was like all over inflation, when the bear sterns panic went on in march, driving tips yields negative, in november, desember it was regular treasuries that had negative yields. Now regular treasuries are loosing value fast, 13 % in 2 trading days, and tips are hot again. They also made empty talk in 2002-2003. It's the same situation now. However, there is maybe a stronger resemblance to 1998. even then you had deflation talk. It's like the economic professors can't understand the market, and therefore starts predicting deflation every time you have a temporary disruption, that cause everyone to hide in treasury bonds.

This is about where my thinking is at the moment

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This is about where my thinking is at the moment

The previous inflationary wave was battled by cutting costs, being ruthless and so on, which lead (along with dipshit CB policies) to the appearance of deflation.

Dipshit politicians think that everything is a function of what you can get people to believe in, so they will try and bluff us into deflation. As I said already, sky high, super duper high inflation by June/July this year, then going absolutely insane from then on until full repudiation.

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Guest Steve Cook
The previous inflationary wave was battled by cutting costs, being ruthless and so on, which lead (along with dipshit CB policies) to the appearance of deflation.

Dipshit politicians think that everything is a function of what you can get people to believe in, so they will try and bluff us into deflation. As I said already, sky high, super duper high inflation by June/July this year, then going absolutely insane from then on until full repudiation.

I think so. Maybe not on as short a timescale...but yes

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This is about where my thinking is at the moment

Actually, I think this is the time to load up big on oil stocks, this is the starting bell for the peak oil scenario, solar stocks, oil sands, the agricultural commodities, the full package.

The trouble now, unlike in 2002-2003, is that inflation might return even faster than then. That is if the dollar return to it's levels before the crisis hits. That will cause a pressure in the US to raise interest rates as soon as in just 4 months time. It's possible that the fed under bernanke have a desire to nurture inflation, actually pushing the US towards runaway inflation, through buying bonds with the printing press instead of raising interest rates to finance the deficient. if treasuries sell off as I think it will, the pressure to raise rates will happen probably as far as in 2-4 months. I do think they will raise rates and drive the economy into a tank when then time for that comes, however, it's possible that they will embrace inflation in an act of insanity.

Edited by carseller
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Actually, I think this is the time to load up big on oil stocks, this is the starting bell for the peak oil scenario, solar stocks, oil sands, the agricultural commodities, the full package.

The trouble now, unlike in 2002-2003, is that inflation might return even faster than then. That is if the dollar return to it's levels before the crisis hits. That will cause a pressure in the US to raise interest rates as soon as in just 4 months time. It's possible that the fed under bernanke have a desire to nurture inflation, actually pushing the US towards runaway inflation, through buying bonds with the printing press instead of raising interest rates to finance the deficient. I do think they will raise rates and drive the economy into a tank when then time for that comes, however, it's possible that they will embrace inflation in an act of insanity.

Stocks assume a relationship that won't be there.

Forget all kinds of rent seeking behaviour for a while. It's way too risky.

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Guest Steve Cook
Actually, I think this is the time to load up big on oil stocks, this is the starting bell for the peak oil scenario, solar stocks, oil sands, the agricultural commodities, the full package.

The trouble now, unlike in 2002-2003, is that inflation might return even faster than then. That is if the dollar return to it's levels before the crisis hits. That will cause a pressure in the US to raise interest rates. It's possible that the fed under bernanke have a desire to nurture inflation, actually pushing the US towards runaway inflation, through buying bonds with the printing press instead of raising interest rates to finance the deficient. I do think they will raise rates and drive the economy into a tank when then time for that comes, however, it's possible that they will embrace inflation in an act of insanity.

Timing is, as ever, everything.....

But, yes, I also do think that this is the starting bell for peak bloody everything, to be honest. Most crucially, energy.

As soon as we try and globally grow again is when the shit will really hit the fan. Those same resource contraints are still waiting out there for us when this happens.

In the meantime, yes, I think they do believe they can inflate the nasty deflationary mess away. Either that, or they are simply buying time while they figure out how to keep us all in check when our lights start going out in a decade or two.

nice

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I may be cynical but i expect quantative easing to be dressed up as some form of liquidity support for the housing market.

ie. The govt offers to buy mortgage backed securities from the UK banks and just swells the BOE balance sheet by printing the money. This would be sold as "freeing up the housing market to support hardworking families".

So you get a reflated economy and housing market just in time for an election.

Edited by Dunroamin'
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The previous inflationary wave was battled by cutting costs, being ruthless and so on, which lead (along with dipshit CB policies) to the appearance of deflation.

Dipshit politicians think that everything is a function of what you can get people to believe in, so they will try and bluff us into deflation. As I said already, sky high, super duper high inflation by June/July this year, then going absolutely insane from then on until full repudiation.

I think you are calling it 2 years too early.

We need legislation for QE, which will take time.

I think we will hear a loud claxophony from everywhere about a shortage of money first. Its a shortage of lending we are hearing atthe moment.

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Guest Steve Cook
If you've got any sense, you'll stay away from both.

Edit: added bold bits

Ultimately, yes.

In the end, the only things that will be safe to buy will be things

Preferably useful things...

Failing that, things that will reliably hold your store of exchange value while you figure out what useful things you do want

And, by reliable, I don't mean pieces of paper with ink on them..... ;)

Edited by Steve Cook
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I think you are calling it 2 years too early.

We need legislation for QE, which will take time.

I think we will hear a loud claxophony from everywhere about a shortage of money first. Its a shortage of lending we are hearing atthe moment.

The press is full of deflation.

But!

You are right about me being two years too early, I am for the UK. Just not for the states, which will see it's bloodbath this year. This will cause ours to crop up sooner than the numbers allow for because all central banks are holding hands as they jump over the cliff.

The legislation is already passed, btw. Civil contingencies act.

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No no. Government bonds are risky. Very risky. The stock market is very cheap.

The stock market is a creation of the state.

If the bonds are ******ed, the state will have collapsed and the stock market won't be there in any form as you know it.

The state will collapse - and as it subsidises all forms of rent seeking behaviour through it's organised coercive monopoly, all forms of rent seeking behaviour will become the purview of those who want to engage in them as individuals.

Violence and threats are expensive overheads.

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Guest Steve Cook
I think you are calling it 2 years too early.

We need legislation for QE, which will take time.

I think we will hear a loud claxophony from everywhere about a shortage of money first. Its a shortage of lending we are hearing atthe moment.

Hi Bloo Loo

Did you catch my reply to your point on debt free money creation, earlier....

http://www.housepricecrash.co.uk/forum/ind...t&p=1559393

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Hi Bloo Loo

Did you catch my reply to your point on debt free money creation, earlier....

http://www.housepricecrash.co.uk/forum/ind...t&p=1559393

I did, but you argue either inflation or taxation.

I wouldnt think either is mutually exclusive.

If the Gman just tells the BoE to issue 1bn pounds to the treasury, then that is debt free, valueless money that needs no repayment or taxation to settle.

It is, as you say just an addition to the money supply.

This will of course either offset some of the black hole in bank credit we currently have, or go into circulation. I suspect it would be quickly hoarded into the banking system, filling the black hole after a short while in circulation

The Man will say, look that worked for a while, but we didnt print enough. They will do it again. This is what happened in the Weimar Hyperinflation.

I fail to see where tax comes into it, Im afraid, Steve.

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I did, but you argue either inflation or taxation.

I wouldnt think either is mutually exclusive.

If the Gman just tells the BoE to issue 1bn pounds to the treasury, then that is debt free, valueless money that needs no repayment or taxation to settle.

It is, as you say just an addition to the money supply.

This will of course either offset some of the black hole in bank credit we currently have, or go into circulation. I suspect it would be quickly hoarded into the banking system, filling the black hole after a short while in circulation

The Man will say, look that worked for a while, but we didnt print enough. They will do it again. This is what happened in the Weimar Hyperinflation.

I fail to see where tax comes into it, Im afraid, Steve.

In order for it to work, they need to make you use it.

So they'd print up the first batch of £100,000,000 notes and soon after send out new tax demands. otherwise the money doesn't circulate.

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In order for it to work, they need to make you use it.

So they'd print up the first batch of £100,000,000 notes and soon after send out new tax demands. otherwise the money doesn't circulate.

luv your humour, Injin :lol:

Now, they print up £100,000,000 notes. What to they do with them? spend them, put them in CS paypackets, what?

Whatever they do they will end up in the banks.

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