Wednesday, December 11, 2013
US kicking the UK
US treasury yields are on the up, and if US treasury yields are on the up then Carney might feel he doesn't have many options to keep UK interest rates down. The UK, and the world, has been a beneficiary of the low borrowing costs of the US, rather than solely of the BoE programme. Carney suggests reducing gov. expenditure because if the US is forced to taper then the UK can hardly continue monetizing with our own QE programme. But the US has no intention of getting government expenditure under responsible control and are politically committed to trying the government stimulus route. Carney is begging at an empty table.