Further Quantitative Easing (QE3)

creeper1

Hello all. So there are rumors of further quantitative easing in the works.

This policy which is technically described as non standard and very unusual is becoming well more standard and more usual. Come to think of it 0% interest rates are considered unusual and non standard but I sure am getting used to them.

Inflation fell from 5.0 % to 4.8 % and the economy is still very poor so the road is open for more easing.

Are you for or against further easing? It does have some benefits of raising inflation and inflating away the debt that we suffer from in real terms.

However it is nasty on the aged with the real values of their pensions going down and them being unable to demand pay rises.

Where do you stand on QE?

hallmark

A straightforward stealth-tax on anyone with savings in order to bail out everyone who can't afford to service their debts.

The only reason it's being allowed to carry on almost without comment is that (A) There are plenty of ppl with mortgages who are delighted by it & (B) Not enough people even vaguely understand what it is anyway.

If this site & Martyn Lewis gave the slightest stuff about savers no doubt there'd be a campaign against it. But don't expect one anytime soon, Martyn couldn't care less about savers or the endless reaming that's being handed out to them.

BTW in advance of some bleating numbskull jumping in to accuse me of being a bitter STR-er or some other codswallop I'm not, the above is merely fact. My dough is spread far & wide precisely because of way Govts like to introduce policies such as this with zero regard for "fairness".

CLAPTON

QE is a fraud on the british people

basically the BoE gives money to the banks at 0.5% and amasingly they make a decent profit (and pay themselves masive bonuses for doing so well)

if they gave that to the rest of us we could do that too and keep the profit

Glen_Clark

Money Printing = Inflation
Inflation doesn't just hit savers!!
As James Callaghan said @Inflation is the mother and father of unemployment"
And its the stealthiest stealth tax of all.

pqrdef

The economy is screwed, we don't know how to unscrew it, and inflation is about the only tool we've got to manipulate it. Yes, the government will confiscate savings and pension pots. When it needs the money, it has to take whatever there is. People were fools to ever think this was "their" money anyway.

atush

I was infavor f the first QE but not now. It has to stop somtime. I would prefer tax breaks or stimulous via infrastructure spending instead at this pint as it might be more economic than basically devaluing GBP

VT82

CLAPTON wrote: »

QE is a fraud on the british people

basically the BoE gives money to the banks at 0.5% and amasingly they make a decent profit (and pay themselves masive bonuses for doing so well)

if they gave that to the rest of us we could do that too and keep the profit

The BoE doesn't lend money to banks on demand at Base Rate flat without a hell of a lot of expensive strings attached. Why would they pay 3% for retail savings if they did? Don't believe everything you read on Wikipedia.

Glen_Clark

pqrdef wrote: »

The economy is screwed, we don't know how to unscrew it, and inflation is about the only tool we've got to manipulate it.

Only because they rule out taxing the very wealthy.

Thrugelmir

CLAPTON wrote: »

basically the BoE gives money to the banks at 0.5%

How does the BOE give banks money at 0.5% ?

meatandtwoveg

QE Does two things, it holds down long term yields on government debt, by saturating the GILT market with newly printed money, so basically creating demand for GILTS which if not for QE either would not be there, or we would be paying higher rates of interest on our goverment issued debt. This nonsense of having interest rates on goverment debt at all time low's is down to Merv printing money and buying our own debt. Like a snake eating its own tail, or a dog eating it's own sh!te.....Sooner or later we will be printing +RPI on an annual basis......

Secondly, deficit spending, the goverment does not collect enough tax revenue to satisfy spending. So rather than to issue more debt to satisfy the annual deficit, we have decided if we did this we will get further into debt, so paying higher interest rates because the bond market does not believe our inflation figures...So we print now money out of this air, buy up the debt from the DMO. With this new money, so no new debt just new money, and the goverment can keep spending, there is still a deficit, but no more accumulated debt, so less debt servicing costs, through less debt and low long term bond rates...

So new money is entering the system through goverment spending, so devaleing your savings, your salary, your wages, your pensions. Its theft via inflation because the economy cannot further expand of created debt growth due to peak debt, so the goverment have picked up the agly stick. Without QE, 4 million unemployed, house prices down nominally 50%, but at least we would get out of this mess. Instead, the lost decade, maybe two, just like Japan....

talexuser

I agree we seem to be copying all of Japan's mistakes, without an export industry to compensate. If QE was a good thing everyone would have been doing it before. It is a panic measure when no other measures are left to prop up the bubble and prevent negative equity, more repossessions, more unemployment etc etc. Savers suffer but only history will tell if it works for a "softer" landing than would otherwise have been the case, or if it is just kicking the can down the road for the inevitable (and possibly worse) correction to come.