Gilt auction failure.

Wookster

Sir_Humphrey wrote: »

Do you think that QE should be enough to kick-start the economy then?

Do you really think that if the economy is inflating then its growing again? :rolleyes:

Sir_Humphrey

Wookster wrote: »

Do you really think that if the economy is inflating then its growing again? :rolleyes:

I never said that was the case. If QE kickstarts the economy (i.e if it works) then inflation should increase as a byproduct. If it is ineffective, then that inflation side effect would not occur - much as when it did not work in Japan in 2001 (different circs here I know - which is why I asked Kennyboy's opinion).

Wookster

Sir_Humphrey wrote: »

I never said that was the case. If QE kickstarts the economy (i.e if it works) then inflation should increase as a byproduct. If it is ineffective, then that inflation side effect would not occur - much as when it did not work in Japan in 2001 (different circs here I know - which is why I asked Kennyboy's opinion).

We already have enough inflation - the CPI is now 3.2%:rolleyes:

Sir_Humphrey

Wookster wrote: »

We already have enough inflation - the CPI is now 3.2%:rolleyes:

And I suppose if House prices started to pick up, you'd suddenly start quoting RPI again I suppose. Inflation is 0%.

Rochdale_Pioneers

Sir_Humphrey wrote: »

And I suppose if House prices started to pick up, you'd suddenly start quoting RPI again I suppose. Inflation is 0%.

Its funny. Where the government has changed its measure of things like unemployment its critics hurl abuse in its direction and wildly exaggerate what the number would have been on the old system.

When the government adopts a new measure to run in tandem with the old one, its critics cling to the new one because they prefer the political narrative they can draw from it.

Inflation - on the tried and tested used for years measure - is as you say zero. Why isn't this method good enough for them? Oh thats right - it gives the "wrong" answer!

kennyboy66_2

Sir_Humphrey wrote: »

Do you think that QE should be enough to kick-start the economy then?

To be honest it will be difficult to pin point which exactly has worked

1) QE
2) Negative real interest rates (if we use CPI or RPIX)
3) Sterling revaluation
4) Fiscal stimulus, whether automatic (benefits / less tax) or specific spending programs or Vat reduction.

I think they are all worth a go and think all should have some effect & I would not be surprised to see the economy grow by a small amount in Q3 this year.

The problem will be that Government spending will have to be curbed in a fairly brutal way and taxes will be rising from 2010 onwards. It may not have seemed like it to everyone in the public sector but 9 years of feast from 2000-2009 will almost certainly be followed by 9 years of relative famine.

Sir_Humphrey

kennyboy66 wrote: »

To be honest it will be difficult to pin point which exactly has worked

1) QE
2) Negative real interest rates (if we use CPI or RPIX)
3) Sterling revaluation
4) Fiscal stimulus, whether automatic (benefits / less tax) or specific spending programs or Vat reduction.

I think they are all worth a go and think all should have some effect & I would not be surprised to see the economy grow by a small amount in Q3 this year.

The problem will be that Government spending will have to be curbed in a fairly brutal way and taxes will be rising from 2010 onwards. It may not have seemed like it to everyone in the public sector but 9 years of feast from 2000-2009 will almost certainly be followed by 9 years of relative famine.

I am not convinced the current measures are enough TBH, but we shall see.

From a purely selfish POV, I am not that worried about cutbacks. No government (unless gaga or insane) is going to chop the area of work that I do. Even if they did, my line manager is near retirement, so if they did cut back, I'd stand a good chance of gaining promotion as a result! However, some people here have not fully thought through what cutbacks would mean - the work I do supports many thousands of private sector jobs - not a bad return for a team of five people!

A._Badger

Sir_Humphrey wrote: »

I am not convinced the current measures are enough TBH, but we shall see.

From a purely selfish POV, I am not that worried about cutbacks. No government (unless gaga or insane) is going to chop the area of work that I do. Even if they did, my line manager is near retirement, so if they did cut back, I'd stand a good chance of gaining promotion as a result! However, some people here have not fully thought through what cutbacks would mean - the work I do supports many thousands of private sector jobs - not a bad return for a team of five people!

And clearly keeps leaves you an enormous amount of time to post here.

Excellent value for my tax money, I must say.

tomterm8

dealsearcher wrote: »

If it is not the place of the governor of the bank of england to voice concerns who can?

The Bank of England is the monetary authority in the UK, Parliament is the fiscal authority. Mr King is doing the work that the leader of the opposition should be doing.

Sir_Humphrey

A._Badger wrote: »

And clearly keeps leaves you an enormous amount of time to post here.

Excellent value for my tax money, I must say.

Try to find postings from me yesterday, the day before, most of last week and last November and December. You won't hear much from me from late April until July either. My work is highly cyclical.