Wednesday, September 28, 2016

Thanks for nothing…

QE is here forever, says Bank of England deputy governor

''Interest rates are likely to stay relatively low permanently, she said''

Posted by hpwatcher @ 02:15 PM (4894 views)
Please complete the required fields.



5 thoughts on “Thanks for nothing…

  • Only ”relatively low” under the current financial system – which is way past it’s sell-by date.

    Reply
    Please complete the required fields.



  • What else can you expect when ‘deep, structural forces’ are at work.

    She mentions global savings and investment (but nothing about what they are or how they work) as significant contributors to these deep forces.

    Let’s look at the global savings bit. Could she be referring to what happened when the US kicked off the money-printing after 2008 (though of course the Japanese did this earlier – but it wasn’t printing the world’s reserve currency)? Low U.S. IRs / easy credit caused US investors to lend abroad or to buy foreign assets yielding more than 1 per cent. This dollar outflow forced other countries to protect their currencies from being forced up. Those countries did this by keeping these dollars in dollar form by buying U.S. Treasury bonds. So the “excess Chinese savings,” “excess yen savings” and “excess Euro savings” are spent on U.S. Treasury securities (and earlier on Fannie Mae bonds to earn a bit more). So these savings are not really what Chinese save (“for their old age because they don’t have social security”) or what the Japanese or Europeans save in their own currencies. The money used to buy U.S. Government securities (‘the deep, structural global savings’) consists of the excess dollars that the American military, American investors and American consumers spend abroad in excess of U.S. earning power.

    Global investment? In assets already in place for the above purpose and to support the prices of assets on the books of TBTF banks).

    So QE is the reason for the deep, structural forces that make it necessary to continue with..er…QE.

    Reply
    Please complete the required fields.



  • “Something has changed in the last decade with big forces of demography, global savings and investment”

    OK. Now tell me something I don’t know. Like what the magic somethings is?

    “As interest rates are going to stay low, central banks need other tools to stimulate the economy”

    Hmm. Could it be that central bankers tinkering with the financial system are part of the problem? The presumption that central banks must do something every time the economy hits a rough patch looks a bit hubristic.

    Reply
    Please complete the required fields.



  • Bankers always peddle the illusion that somehow the economy has a mind of its own and nothing can change it. In reality they rig the economy for the benefit of those with influence, which are the bankers, corporations and their bosses, etc

    Reply
    Please complete the required fields.



  • it wasn’t all that long ago that Mark Carney said they were going to go up so I take this with a pinch of salt.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>