Extra £50bn pumped into economy

michaels

I sort of feel like we are having a 'road runner' moment - Wiley Coyote has run over the edge of the cliff, rather than plummeting instantly we has started running as hard as he can (= monetary easing, QE and huge fiscal deficit) and is hovering but there is only one inevitable outcome - but in this instance how long he can 'hover' does make a difference with the political cycle.

Hovering all winter would be a pretty tough act to pull off - how long a campaign for a snap election? If 3 weeks with an election early Oct would put us mid Sept for the announcement - if we see 6 weeks of (feel)good weather I would put the odds at more than 50%.

Really2

Graham_Devon wrote: »

Which begs the question....why go down it?

Because the not doing anything path would be worse.

Graham_Devon

Really2 wrote: »

Because the not doing anything path would be worse.

Which begs the question, why? It's been thrown at us that manufacturing is up, falls are declining, GDP is getting better, house prices up, car sales up, that the UK will be the first out of recession, bank profits up etc etc?

wymondham

again, mixed signs..... many saying this is the end of the recession, but this points otherwise surely???

ad9898_3

What did I tell you guys, it's like 'crack', once you start......., I was only saying the other day that they are kicking the problem into the long grass, the bad news is the only way of dealing with the problem to avoid political suicide is to keep kicking it further in.

This is really bad news for the economy, and it shows that while the government/media talk the talk about 'house prices up', 'economy getting better' etc.... the situation on the ground is absolutely dire, otherwise they wouldn't risk more QE.

Buy a house now/take on more debt at your peril, I wouldn't get into debt for a £5 CD at this time, or anytime in the next two years, it will be then when we finally see what the situation is, from now until the election is a total cover up, prepare yourselves is what I say.

Graham_Devon

I think we can safely say, with the backing of the BOE, all this green shoot stuff, it's all complete rubbish. No one can say we are recovering now the BOE are saying it's worse so we need to pump more in.

Haven't got a clue what shape this recession is now going to be. The use of a yoyo will probably resemble it though. The economy needs to sort itself out and find it't feet, but the BOE / Government is doing its very best to keep pulling that bunjie cord back up.

We need to prop things up, but we also need a natural bottom and recovery also, otherwise we are just prolonging it and bodging it.

Every single part of this recovery is based on more debt. None of it is real.

ad9898_3

I nearly spit my coffee over the dash of my car today when I heard this, and guess what reasons the BoE gave for printing more cash, wait for it............

'We are doing this to start banks lending again and make credit cheaper so the people will borrow'

You couldn't make it up, anyone remember the cause of the meltdown less than a year ago ?....... it seems the BoE have the memory of a fish.

Graham_Devon

They bailed out banks to get them to start lending.

They started 75bn of QE to get them lending.

They increased that to 150bn to get them ledning.

Darling and Brown went on TV to wiggle their fingers at them to get them lending.

They have now increased it to 175bn to get them lending.

And guess what else they did. Let a freaking management company run our shares in the banks in which they told us "if we pass over taxpayers money, we will make sure they start lending" and PASSED on the opportunity to sit in on board meetings and have a say.

Next thing, we will be at 250bn to get banks lending, with some more wiggly fingers, and Brown going on TV to blame America for our banks not lending and giving a cheesy smile when someone asks him the most simple of questions.

Then, we will use northern rock to make outrageous lending, with a further cheesey smile and the slogan "we think it is right you take this money you cannot afford".

I'm hacked off with this "we think it's right" stupid b&*llocks!

Ahhh, thats better

StevieJ

You may as well read the exchange of letters between MPC and Chancellor.
BTW I think the BOE has a simple REMIT, CPI 2%.

http://www.bankofengland.co.uk/monetarypolicy/pdf/govletter090806.pdf

http://www.hm-treasury.gov.uk/d/chx_letter_060809.pdf

mewbie_2

Sorry I'm late, I know you have been waiting for my fifty billion pounds worth.

GB: "How's that stimulus going Darling?"
AD: "Really well Gordon."

Phone rings, AD answers, goes a bit white.

GB: "Wassup Darling?"
AD: "Oh nothing. That was Merve. Apparently it's working so well he'd like another 50 billion. To.. er.. make it work even better."

Phone rings, another office, somewhere.
Mandelson: "Hello?"
GB: "Sorry to bother you Mr. Mandelson sir, but bad news - Merve wants to ease out another 50 b's."
Mandelson: "Do it. And don't ring again this evening"

Mandelson hangs up and turns to TB. "You know, he just doesn't get it does he?. We have one chance left to buy the electorate, and this is it".