QE = Devaluing the currency....

lvader

How will you know what effect it has? The UK is a relative small player in the global economy. The BOE can only respond to current events and data. When you have commoditiy values changing at a rate of more than 10% a day it's hard to predict the future, that doesn't make it right not to do anything. The DAX went from 7500 to below 5000 in a couple of months, that is what you get from doing nothing and argueing on what needs to be done.

The BOE made it's move, the FTSE went up and so did the pound, everyone including myself expected the pound to drop.

A._Badger

lvader wrote: »

How will you know what effect it has? .

So let me make sure I understand this. On the one hand you are telling us it is an antidote to recession, while at the same time you are warning that its effect is unknowable.

A place on Strictly Come Dancing surely awaits you!

lvader

I have a good idea of what the effect will be and so does the BOE, you don't know what the effect will be because you are saying lets wait and see. If you don't know now, you won't know in six months or a year either.

Graham_Devon

lvader wrote: »

I have a good idea of what the effect will be and so does the BOE, you don't know what the effect will be because you are saying lets wait and see. If you don't know now, you won't know in six months or a year either.

If you know what the effect will be, can you please tell us?

Also might be wise to e-mail the BOE and let them know their whole explanation is wrong.

lvader

I expect the effect on the pound to be neutral (or already priced in) and it to add around .5% inflation. I expect inflation to be between 2-3% next year which I believe is in line with where they want us to be. Inflation below that would be damaging to the UK economy.

Graham_Devon

So you too, are arguing QE is inflationary. You've just stated it will add .5% inflation.

We seem to be on the same page, though disagreeing about it.

lvader

The deficit in double the QE, that overall is deflationary. It's not right to look at QE on it's own and scaremongering that inflation will increase when it might be what is needed to hit the BOE's inflation target.

A._Badger

Interesting to see someone has faith in the BofE's voodoo. Heaven knows what evidence such faith is based on, but I suppose that's the nature of faith.

lvader

A._Badger wrote: »

Interesting to see someone has faith in the BofE's voodoo. Heaven knows what evidence such faith is based on, but I suppose that's the nature of faith.

It has nothing to do with faith, I worked in the financial industry for 10 years and understand what they do and why.

PS iT's very easy to make money if you believe things like higher inflation are a certainty. Go ahead fill your boots.

A._Badger

lvader wrote: »

It has nothing to do with faith, I worked in the financial industry for 10 years and understand what they do and why.

PS iT's very easy to make money if you believe things like higher inflation are a certainty. Go ahead fill your boots.

That would be the financial industry that created this unholy mess, would it?

If it's so simple that someone with a mere ten years under his belt can understand it, one can't help but wonder why someone with eleven years isn't recruited to sort it all out for us.

The fact, of course, is that the world economy is a gigantic, chaotic system, far beyond any one person's understanding or control. Most 'experts' are experts in little more than post hoc reasoning and the fluent use of jargon.

That specifically includes Mervyn King.