Thursday, August 25, 2011

More helicopter drops soon?

BoE would do more QE if economy worsened - Weale

The Bank of England would engage in more quantitative easing should the economic situation deteriorate, MPC member Martin Weale said on Thursday. "The Bank of England remains concerned about inflation being off target but we do think, and I have changed my mind on this, that it can be brought back to target without an early increase in interest rates being desirable"

Posted by little professor @ 06:38 PM (2936 views)
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9 thoughts on “More helicopter drops soon?

  • Deflation weakens the central bank’s control and strengthens people’s purchasing position.

    And we can’t have that now, can we?

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  • Amadeusdevereux says:

    The obvious question to Mr.Wheale is as follows:

    “How?”

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  • general congreve says:

    It seems the only problem with deflation is that it makes debt more onerous for debtors. So in debt-based monetary system, Central Banks will make sure inflation is what everyone gets instead. Screw your purchasing power prudent people, we’ve got bills to pay!

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  • Who’s trough does this printed money fall into?
    It’s basically stealing, isn’t it.
    Regarding pontifications of the ‘great and the good’ pronouncing on the actions of the yoofs and chavs rioting as CRIMINALS – Thou doth protest too much!

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  • Interesting piece from the FT : [acknowledgement to the guys on the forum for posting that there, http://www.housepricecrash.co.uk/forum/index.php?showtopic=168426&st=0&p=3098349&hl=+jackson%20+hole&fromsearch=1&#entry3098349%5D.

    Google the following :

    “Bernanke must not push QE3 at Jackson Hole” … we will find out soon enough!

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  • general congreve says:

    @5 – Hey Techie, looks like you were right about not putting effort in to long posts, in case certain threads get pulled. Seems we are in a new unannounced paradigm where the G word can no longer be linked too in articles.

    Strange, as on the forum they’ve gone the other way a couple of months back and recognised G as part of legitimate discussion and put a dedicated thread in the main forum. Alas, I had to sacrifice my account on the altar of the mods for that to get pushed through – the thread was instated the day after they permanently blocked my account for talking about gold in the main forum?! However, it’s saved me a hell of a lot of time not being able to post there any more, so I should thank the forum mods really, and do be fair I think with the incorporation of the new thread my point was proven and my work was done there.

    I also just wanted to say, if you didn’t see my reply, that Rick Ackerman that you linked to holds exactly the same view as me, so if you agree with him, you agree with me 😉

    Anway, QE or not QE? Personally I agree with some commentators that QE3 started when Bernanke and Merv said interest rates won’t rise for at least 2 years, essentially guaranteeing free money to anyone who can borrow cheaply enough. All the same, it’s going to be an exciting day and interesting to see how the market reacts to Bernanke’s pronouncements.

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  • sadly GC i did reply while you were slumbering :). It looks like we have nowhere to go on that discussion which is a shame. As i said if individual posts exceed what they are allowed then i have no problem with those posts being pulled but the whole thread??

    I did in that post just say that i didnt necessarily agree or disagree with Rick was just posting that since it was related. In any case my point about your post was that it was significant that we had a fall back of the size we did…. if you like in line with UTs and my model. Its not so much the level where it happened it was that it did happen, how much and how quickly it fell that were the issues. I hope that makes sense because i dont want to spell it out in case this gets pulled too!

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  • general congreve says:

    @7 – Fair enough Techie, I’m with you on that too though, increased volatility going forward, in both directions, is pretty typical for a raging bull. Going back on topic I expect we may see more of that volatility today when Bernanke opens his Jackson Cake Hole!

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  • Back to the article, the last part is key where he says ‘back to target without an early increase in interest rates being desirable”. Two variables there, the target, the interest rate and some wishful thinking thrown in. The B of E is in a situation where it has lost control of the economy and it’s traditionally favoured tool of interest rate manipulation no longer works. In other words it is trying to steer a ship without a rudder.

    Accordingly Mr Weale can say whatever he likes and as long as most of the passengers don’t ask questions about the rudder or the captains judgement the course will not change because it ultimately can’t.

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