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QE = Devaluing the currency....
HAMISH_MCTAVISH
Posts: 28,592 Forumite
Or not.
Pound up strongly this morning against the US$, the Euro, and even the Australian $.
Pound up strongly this morning against the US$, the Euro, and even the Australian $.
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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the QE was already discounted on the market so naturally the pound rose0
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the QE was already discountd on the market so naturally the pound rose
Markets were only expecting 50 billion.
They got 75 billion, which was unexpected.
Pound is up anyway.;)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Well it's the coming few months that we should be watching, and it obviously did devalue the pound when announced.
There must be a reason for this rise, and the rise is not what the BOE wanted as QE was partly to help exports, according to Mervyn himself.0 -
Perception it will have helped our economy is the likely answer.
As stated the inflation caused by a poor economy can be a lot worst than that caused by low IR's an QE.
Yesterday's scare of hyper inflation changed quick.;)0 -
Perception it will have helped our economy is the likely answer.
As stated the inflation caused by a poor economy can be a lot worst than that caused by low IR's an QE.
Yesterday's scare of hyper inflation changed quick.;)
QE will lead to further inflation.
Minute by minute movements don't change the stance. I thought you of all people would know not to rely on minute by minute data to try and prove someone wrong.0 -
Graham_Devon wrote: »QE will lead to further inflation.
Minute by minute movements don't change the stance. I thought you of all people would know not to rely on minute by minute data to try and prove someone wrong.
Cast iron?
OK, you lose £75bn and replace it with £75bn how much more money is in your economy than before the loss?
QE is not certain to produce inflation, it can be used to stop deflation.0 -
Cast iron?
Absolutely cast iron.
By pumping £75bn extra in, you are devaluing the currency, therefore, that leads to inflation.
The BOE report on the £200bn suggested they added up to 1.5% to CPI inflation. VAT added more. Commodities added further pressure.
That does not mean that inflation will increase, and thats where the cast iron guarantee ends, as if prices are falling and outweigh the devaluation, inflation will fall.
Off the topic of what we are talking about...What I am getting a little bored of at the moment is economists (and this is in the BNP Paradas or whatever they are called interview) suggesting that inflation will fall back, therefore prices will fall and people will have more money to spend. Why do they keep saying this in the media, and why are they never ever picked up on it? Prices are still rising even if inflation falls back to 3.5%.0 -
Graham_Devon wrote: »Absolutely cast iron.
By pumping £75bn extra in, you are devaluing the currency, therefore, that leads to inflation.
What a lovely black and white world you must live in.
Have you considered that the extra money may lead to extra growth which has the potential to make Sterling a more attractive currency and therefore strengthen?0 -
Graham_Devon wrote: »Absolutely cast iron.
By pumping £75bn extra in, you are devaluing the currency, therefore, that leads to inflation..
The £ is up and is higher than pre-QEII?
If we have devalued it, it should be lower, should it not?0 -
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