Tuesday, March 24, 2009
(Britain cannot afford any further housing stimulus)
After a decade of mismanaging interest rates by ignoring the speculative boom in housing and then ignoring the subsequent rise in inflation from currency devaluation, you might be fooled into thinking that Mervyn King has Seen The Light with a statement like this. Unlikely. King refused to accept the Monetary Policy Committee's culpability in stoking the credit boom, and the primary function of the latest money printing exercise appears to be to buy government debt at a time when no-one else wants to touch it. And when you have a finger on the QE 'nuclear option' (which King has said they will continue to use), you don't actually need any other measures at all. As Hamlet says "My words fly up, my thoughts stay below. Words without thoughts, never to heaven go."