MSE News: Pensions and savers hit as Bank prints more money

MrMalkin

bigadaj wrote: »

...and the bank of England is guaranteed by...hm treasury.

...but not controlled by, which was my point.

MoneySaverLog

Not controlled, but influenced by HM Treasury.

Glen_Clark

MoneySaverLog wrote: »

Or give people vouchers to spend in the shops, at the petrol forecourts, in the parking meters and on trains. Will never happen though will it, the money has to go to the banks for it to go into a black hole.

....... or just tax people less.
Have you noticed how many foreign lorries there are on our roads.
Because they pay far less tax than British lorries.
The British International Road Haulage Industry is going the same way as British Merchant shipping - taxed out of existance, so the money can be wasted on Banks, Politicians, Olympics, Celebrating the Queen giving her Grandson the Order of the Thistle ... etc etc

majorzott

If QE is sooo good - how come Ronny Biggs et al, got 30 years for essentially doing the same thing ????

JohnRo

MrMalkin wrote: »

It's not the government that's printing money, it's the Bank of England, which is not part of the government. George Osborne and Co have no control over what the bank does with interest rates or QE or reserve requirements.

The relationship is complex, secretive and interchangeable, the BoE, MPC, Treasury and government are loosely linked, without governments shielding central banks from criminal consequence and legitimising their monopoly money ponzi scheme dressed as legal tender, the sharp dressed crooks behind central banking wouldn't be able to operate their illegal counterfeit money printing schemes and fractional reserve theft with impunity.

Governments have sold the soul of their nation to the syndicated central banking crooks for a share of the swag.

MrMalkin

majorzott wrote: »

If QE is sooo good - how come Ronny Biggs et al, got 30 years for essentially doing the same thing ????

This has to be a troll. Nobody can be this stupid.

Pincher

As far as I'm concerned, printing money is legalised theft.
It dilutes the value of your savings, as well as the fixed annuity payments a pensioner relies on. This is on top of the reduction in bond yield, which reduces the annuity payments you can lock into on retirement.

Sterling is riding on the exodus from Euros, like the Swiss Franc.
When that trend reverses, who is going to buy all the extra sterling we have been printing?

SallyG

Watched Andrew Neil on the Daily Politics show today trying to get MP Nick Herbert to explain where the QE money has gone - Herbert giggled a lot and couldn't answer - are we supposed just to accept that it's unknowable?

MoneySaverLog

Long post but got the following back from the Bank of England....

Thank you for your e-mail of 6 July concerning ‘Quantitative Easing’ (QE) and the plight of savers. Your e-mail has been passed to me to reply.

Please let me assure you that the Governor and all members of the Monetary Policy Committee (MPC) are aware of the impact that changes in interest rates have on different sections of the community. In particular, the MPC understands the difficulties faced by those who rely on interest from their savings to supplement their income or perhaps save for a deposit. The Governor fully understands that people are unhappy about the high rate of inflation, and the squeeze in living standards that implies. As he notes in his speech of 25 January 2011, he fully sympathises with those people that have behaved prudently and saved carefully. But it is wrong to say that the Committee could have prevented the squeeze in living standards by raising interest rates to bring inflation below its present level. If the Committee had raised Bank Rate significantly, inflation might well have started to fall back, but only because the recovery would have been slower, unemployment higher and average earnings rising even more slowly than now. The erosion of living standards would have been even greater. Thus, although there might have appeared to have been a short-term gain, overall the long-term situation would have been worse for everyone. I should add that all of the Committee looks forward to reaching the point where the strength of the recovery allows them to raise interest rates back to more normal levels.

Turning now to QE, let me explain what the asset purchases we have done so far were meant to achieve. The Bank purchased assets – predominantly government bonds – from private investors like pension funds and insurance companies. These investors then had cash, with which they could purchase other assets, including those issued by private sector companies. The aim of that process was to lower the yields on government and corporate bonds and boost other asset prices, therefore lowering borrowing costs for a range of businesses and households throughout the economy. There is a good deal of encouraging evidence that QE had the effects we intended. Government and corporate bond yields fell considerably as the separate tranches of asset purchases were announced, and the period of the Bank’s initial QE asset purchases saw an increase in the issuance by businesses of the bonds and equities by which their activity is financed.

Another consequence of the Bank’s QE asset purchases is that the amount of money circulating throughout the economy is greater than it otherwise would have been. Ultimately, that money needs to be placed on deposit somewhere within the banking system at a commercial bank. It is possible that these additional deposits might encourage greater lending by the commercial banking system, although this was not the primary objective of the Bank’s QE policy.

A further important aspect of QE asset purchases is that they are reversible, and indeed all of the assets can be sold back to the market sometime in the future when a tightening of monetary policy is required in order to meet the 2% inflation target.

Finally, as the Governor stated in his Mansion House speech last month, “today’s exceptional circumstances create a case for a temporary bank funding scheme to bridge to calmer times”. A full transcript of the speech can be read on our website at:

http://www.bankofengland.co.uk/publications/Pages/speeches/2012/587.aspx.

The Funding for Lending Scheme will provide funding for banks for an extended period of several years, linked to the performance of banks in sustaining or expanding their lending to the UK non-financial sector, including mortgage lending, during the present period of heightened uncertainty. The Bank is not giving this money to the banks, it is lending it to them against a much greater value of collateral comprising loans to the real economy, it is directly aimed at tackling the high level of funding costs the banks are currently experiencing and thus passing on to their customers. You can read more about the scheme at:

http://www.bankofengland.co.uk/publications/Pages/news/2012/067.aspx

Thank you once again for writing to the Bank. I Hope that I have been able to clarify these matters for you.

JohnRo

They're full of crap, central bankers are a bunch of crooks.

QE is an experiment and neither they nor anyone else knows if it will work or not in the end. Evidence suggests it won't, the bankers love it of course as it is being used primarily to shore up their balance sheets at everyone else's expense and preserve the obscene bonuses.

One thing for certain is that all the counterfeit money BoE crooks are creating out of thin air and handing to their proxies is going to devalue the existing monopoly money we are all forced to use. That means a simple and straightforward transfer of wealth from those holding BoE monopoly money to those printing it. Some might even call it theft.

Ultimately the taxpayer, current and future, underwrites the criminality and will bear the total cost of this and all other banking debacles.

Their 2% target is a laughing stock, they have failed completely and the only solution these crooks will eventually come up with is to adjust the target to 3, 4 or 5 or whatever percent inflation their crooked money printing ways inflict on the rest of us.