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Petition to stop QE
Sara G
Posted: 17 August 2016 13:37:03(UTC)
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Anyone concerned by the experiments being conducted by various central banks, including the BoE may be interested in this petition, started by Tim Price - a bearish commentator for Money Week:

https://petition.parliament.uk/petitions/164630

Disclosure: I haven't decided yet whether to sign it myself. Limiting the mandate of the BoE may lead to a whole different set of problems down the line. But I do believe that interest rates that are too low and the continued flow of cheap money are not healthy for the future prospects of the economy.

Of course nothing is likely to change as a result of signing this, or any similar petition, but it may at least force a response from the government.
2 users thanked Sara G for this post.
Jeff Liddiard on 17/08/2016(UTC), Raj K on 17/08/2016(UTC)
King Lodos
Posted: 17 August 2016 14:05:36(UTC)
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I think the problem is it's very easy to criticise monetary policy, but I'm sure governments and central banks would be thrilled to hear any sensible alternatives ... Without any, it just seems like a lot of hot air

Also we have to remember, in real terms, rates aren't particularly low ... They reached almost -20% in the 70s



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Sara G on 17/08/2016(UTC)
Alan Selwood
Posted: 17 August 2016 15:01:33(UTC)
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QE seems to have been a failed experiment so far, though it might have been worse without it.

Short of illegal action against all the policy-makers, I don't see how anything will change while QE lets them put off the day of reckoning yet again.

And yes, anyone with a better answer will deserve to get a knighthood.........!
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Sara G on 17/08/2016(UTC), c brown on 17/08/2016(UTC)
Micawber
Posted: 17 August 2016 15:01:40(UTC)
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Publicity stunt. Subscribing to Moneyweek is an investment cost, remember?...!

Remember they predicted The End Of Britain? Successful PR title, got a lot of people worried, Britain's still here....
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srg751 on 19/08/2016(UTC), Sinic on 20/08/2016(UTC)
Micawber
Posted: 17 August 2016 15:04:01(UTC)
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Alan Selwood;36473 wrote:
QE seems to have been a failed experiment so far, though it might have been worse without it.



Yes indeed it might. QE is ingenious, and invented in Britain.
King Lodos
Posted: 17 August 2016 15:14:22(UTC)
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I think it's worked well for the US

In that we avoided a repeat of the Great Recession, and just a few years later the US economy looks fairly sturdy

I've always wondered whether European or Asian QE would have the same effect, especially when things are moving in the opposite direction to the US ... I suppose the mistake was Europe not starting stimulus earlier
Sara G
Posted: 17 August 2016 18:15:43(UTC)
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Micawber;36474 wrote:
Publicity stunt. Subscribing to Moneyweek is an investment cost, remember?...!....


I think of it more as an entertainment cost - although really it is cost neutral as I gave up reading Vogue to pay for it ;)
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c brown on 17/08/2016(UTC)
andy
Posted: 18 August 2016 21:06:59(UTC)
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I remember giving up my TV licence to pay for my gum membership when I divorced - lasted a decade - still don't have a TV - really ought to get back in the gym again.

Maybe can find some entertaining finance things now I have given up listening to the news on the radio until I get over the anger over Brexit - no thats not a request to be baited on that one thank you - although I am not complaining about the profits taken ;)
Tom Mozy
Posted: 19 August 2016 11:18:51(UTC)
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GOLD STANDARD!

The only monetary system that works, all others are become corrupted.

Fiat enriches those that control and get first use of the money.

Main street gets stuffed.

SIGN THAT PETITION

Create one to close the BOE as well!

Central banking is a blot on human societies escutcheon

S_M
Posted: 19 August 2016 12:40:06(UTC)
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QE inflates assets. The most dangerous in the UK being residential property. I can't think of any other developed economy where it's population obsesses about property.

That combined with limited supply creates a pretty nasty backdrop when the bubble does burst.

QE's side effect, as is quite often mentioned by economists like putting the economy on steroids.
JohnR
Posted: 19 August 2016 18:04:56(UTC)
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The banks should have been allowed to fail and the QE money, if even needed, used to smooth the transition. The financial collapse wheeze was a BS Benanke lie used to cow politicians into submission.

Now 8 years on, the same 'emergency' measures are still solidly in place, the too big to fail banks are bigger than ever, doing all the same things and their profit and bonus culture in rude health.

Anyone not riding on the central bank's coat tails is being left behind at a rate of knots.
srg751
Posted: 19 August 2016 18:58:39(UTC)
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Sara G;36484 wrote:
Micawber;36474 wrote:
Publicity stunt. Subscribing to Moneyweek is an investment cost, remember?...!....


I think of it more as an entertainment cost - although really it is cost neutral as I gave up reading Vogue to pay for it ;)



Those fliers/emails promoting their 'the end is nigh', .garbage make my blood boil. .. They are utterly shameless.
King Lodos
Posted: 19 August 2016 23:26:20(UTC)
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Tom Mozy;36527 wrote:
GOLD STANDARD!

The only monetary system that works, all others are become corrupted.

Fiat enriches those that control and get first use of the money.

Main street gets stuffed.

SIGN THAT PETITION

Create one to close the BOE as well!

Central banking is a blot on human societies escutcheon



Well I know a fair few libertarians feel that way – this belief a system can totally self-regulate and be more stable/efficient

But, if you watch Ray Dalio's How The Economic Machine Works, you see the ups and downs of the economy (and of markets) are really much more to do with human behaviour, and especially massive-scale group behaviour

What central banks do, in raising and lowering rates, is really to act as brake and accelerator pedals, trying to help avoid us driving the economy off a cliff ... Self-regulating systems (such as nature) are often extremely volatile and chaotic when looked at over more representative timescales

https://www.youtube.com/watch?v=PHe0bXAIuk0

3 users thanked King Lodos for this post.
Sara G on 20/08/2016(UTC), Mike L on 22/08/2016(UTC), john_r on 01/05/2017(UTC)
Stephen B.
Posted: 20 August 2016 08:43:17(UTC)
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People should be careful what they wish for. The underlying reason for QE is that a significant number of people (meaning both individuals and companies) are trying to hold large cash deposits without a current intention to spend them and without enough borrowers to spend on their behalf, so the BoE is creating more cash to fill that demand to stop cash being sucked out of the general economy. The alternative would be to try to limit the size of those deposits, either by taxing them or by allowing inflation to rise and having them eroded in real terms.
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Sara G on 20/08/2016(UTC)
JohnR
Posted: 21 August 2016 22:04:25(UTC)
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The underlying reason for QE is that the banks are run by a bunch of crooks.

The rest does not compute, QE money is an internal fraud, most of it never leaves the syndicate. The banks and their shadow banking subsidiaries, to whom it's handed gratis by the central banks they own, is then parked up earning interest or gambled into the world's financial asset markets.

QE is just a con. The banks are using it to pay themselves something for nothing at everyone else's expense, via their CB puppets.
King Lodos
Posted: 21 August 2016 22:37:55(UTC)
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JohnR;36588 wrote:
The underlying reason for QE is that the banks are run by a bunch of crooks.

The rest does not compute, QE money is an internal fraud, most of it never leaves the syndicate. The banks and their shadow banking subsidiaries, to whom it's handed gratis by the central banks they own, is then parked up earning interest or gambled into the world's financial asset markets.

QE is just a con. The banks are using it to pay themselves something for nothing at everyone else's expense, via their CB puppets.


I think the media overplays that narrative ... It would take a brave editor to place any blame at their own audience's doorstep

Take the financial crisis – on the other end of every bank issuing a risky loan was a customer who wanted to spend money they didn't have ... We were all over-leveraged – and at some level there has to be some personal accountability

The alternative to QE, at the time, looked likely to be a repeat of the Great Depression ... It's easy and fashionable to criticise, but what we really need is for someone to come up with a sensible alternative
3 users thanked King Lodos for this post.
Micawber on 22/08/2016(UTC), Sara G on 22/08/2016(UTC), Clive B on 22/08/2016(UTC)
JohnR
Posted: 22 August 2016 10:06:01(UTC)
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The GFC was not caused by the liar loans.

It was caused by several factors rooted in wholesale rating agency / banking fraud/greed/stupidity and in no small part a culture of privilege, entitlement and impunity.

Junk debt, which the market is perfectly capable of dealing with, was being disguised, packaged and sold to other banks as something all together different for vast profit. The GFC was caused by the banks, make no mistake.

Long prison sentences and an orderly dismantling of most of the crooked TBTF banks would have gone a very long way to solving a very great deal. The problem then, as now, is that corruption is endemic and bankers are calling the shots, politicians and regulators are for the most part either on the payroll, looking to be in future or simply transient interlopers.

Remember all the political blather soon after about wholesale banking reforms, the banks soon put a stop to all that silly nonsense.

Eight years on and counting we are where we were and seeing no sign of anything changing any time soon. Everything is floating high on piles of counterfeit and dependent on the politburo's next policy pronouncement.

It's all well and good saying we need solutions, the problem is it'll be the banks that decide what those solutions are and they've already found themselves a lucrative one.
Dian
Posted: 15 October 2016 02:33:32(UTC)
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I think Central banks didn’t have any options and they chose easy money policy. Wring or wrong this decision stopped some financial institutions becoming bankrupt and gave some sort of short term solutions to the financial Crisis then. Many banks prevented from becoming bankrupts. However, this led to higher asset prices globally. Parking money in non-productive areas could lead to another crisis in the long run. In addition to prudent policies, CB may take some wrong decisions on interest rates and currency management as well. This will affect some segments of society very badly.

Interest rate and currency fluctuations involve lot of risks. It can affect many segments of the society. Therefore, central banks should have some prudent and efficient intersect rates and currency management. As financial system has not fixed once for all, we may see different types of crisis in the future too.

However, these all types of things create great opportunities for intelligent investors. With array of worries many institutions, traders and investors will avoid markets. Examples are many avoided markets during period of sub-prime, banking and credit crisis etc. On the other hand those who took positions during difficult period emerged as clear winners.

Smart central banks will outperform other central banks in the future.

http://www.bloomberg.com...ds-on-day-before-brexit

Brexit Bet Makes Kazakhstan Better Than Soros

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Micawber on 15/10/2016(UTC)
Mickey
Posted: 15 October 2016 08:12:53(UTC)
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Stephen B.;36544 wrote:
.....The alternative would be to try to limit the size of those deposits, either by taxing them or by allowing inflation to rise and having them eroded in real terms.


I suspect that the intention always was, and still is, to inflate our way out of debt.
Stephen B.
Posted: 15 October 2016 08:32:23(UTC)
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The problem isn't debt, it's saving - if savings keep building up without being spent you have to keep creating new money to replace them in the circulating economy, and you're potentially building up trouble for the future if the savings begin to be spent again at some point. It's similar to the problem companies have with loyalty points - if people don't redeem them and they don't expire companies could eventually find that they have a huge overhang which could potentially wipe out their profits for a long period if they were all spent at once. (Maybe I've missed it but I don't think any company publishes their outstanding exposure to loyalty points ...)
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