Wednesday, February 24, 2010

More Printy, Printy?

Sterling sinks as King talks of releasing more money

Sterling fell sharply on foreign exchanges yesterday after Mervyn King, the Governor of the Bank of England, warned again that it may be necessary to extend the Bank’s asset purchase programme. The pound lost more than a cent against the US dollar in only ten minutes after Mr King told the Treasury Select Committee that the Bank was “ready to do whatever seems appropriate”.

Posted by tyrellcorporation @ 08:57 AM (980 views)
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5 thoughts on “More Printy, Printy?

  • MK really doesn’t have much of a choice.
    He needs to QE in order to buy the record amount of gilts we are selling to fund our debt.
    The only other option would be to raise interest rates to attract buyers of the gilts and he can’t do that or there would be a HPC and the economy would tank.

    Simples!

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  • Rodney, this time next year we’ll all be millionaires…

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  • @mrflibble – “Rodney, this time next year we’ll all be millionaires…”

    No, but we might all feel like millionaires because asset prices will be falling so sharply.

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  • mark wadsworth says:

    Wdbeast has already said what I was going to say. It’s as simple as that.

    QE has naff all to do with “pumping money into the economy” because they have to borrow it from banks (take it out) first before they spend it (put it back in) and as borrowing pushes up interest rates and future taxes, and as government spending (beyond a certain point – and we are well past it) creates less value than it costs, this is a hiding to nothing.

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  • MW said, “[QE]…creates less value than it costs, this is a hiding to nothing.”
    – hence why Sterling tanked upon the implication of more of it.

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