BOE's weale warning over more QE, Tripple Dips, and Inflation targets

Graham_Devon

Interesting article here, on what Martin Wheale thinks on the economy. You may agree or disagree!

Basically however, he believes that more QE may be too much QE. That we have to start taking inflation seriously, and show were serious, otherwise people can become complacent and take too many risks, and that the economy could be heading for a triple dip recession.

He also states that the looming fiscal cliff in America, rising prices, and the EU are our biggest risks right now.

Not sure if it's just me, but he seems to "get it"....for now. He appears to note how rising prices affect people, how interest rate complacency (sp) is a dangerous game to play, and how the populace see the BOE.

http://www.thisismoney.co.uk/money/news/article-2215882/INTERVIEW-Martin-Weale-casts-doubt-QE-sounds-alarm-inflation.html

ILW

Bet Merve is not his friend anymore.

wotsthat

Graham_Devon wrote: »

Basically however, he believes that more QE may be too much QE. That we have to start taking inflation seriously, and show were serious, otherwise people can become complacent and take too many risks, and that the economy could be heading for a triple dip recession.

It doesn't matter where I am or what I'm doing - if there's a triple dip I want to be here.

I can almost feel the excitement building.

wotsthat

Graham_Devon wrote: »

Not sure if it's just me, but he seems to "get it"....for now. He appears to note how rising prices affect people, how interest rate complacency (sp) is a dangerous game to play, and how the populace see the BOE.

Here's a Telegraph from this time last year...

http://www.telegraph.co.uk/finance/financialcrisis/8816919/Martin-Weale-A-lot-of-scope-for-more-QE.html

Quite a turnaround in viewpoint. What's his voting history like?

Graham_Devon

wotsthat wrote: »

Here's a Telegraph from this time last year...

http://www.telegraph.co.uk/finance/financialcrisis/8816919/Martin-Weale-A-lot-of-scope-for-more-QE.html

Quite a turnaround in viewpoint. What's his voting history like?

I dunno what his voting history is like!

Things change though Wotsthat. You have to change your viewpoint with them.

Rinoa

wotsthat wrote: »

Here's a Telegraph from this time last year...

http://www.telegraph.co.uk/finance/financialcrisis/8816919/Martin-Weale-A-lot-of-scope-for-more-QE.html

Quite a turnaround in viewpoint. What's his voting history like?

Wonder if Graham started a thread about those comments.

Unlikely.

Generali

Just to make the point, QE only really works if people think it's going to cause inflation. Part of the idea of it is to increase inflationary expectations.

michaels

So we are back to - yes nominal wage standstill and real wage cuts are painful...but not half as painful as nominal wage cuts when trying to service fixed debts.

Unfortunately few would argue that real wage cuts are unavoidable (see balance of payments as evidence that collectively we are consuming more than we produce following a decisive adverse change in the terms of trade for our exports compared to our imports)

wotsthat

Generali wrote: »

Just to make the point, QE only really works if people think it's going to cause inflation. Part of the idea of it is to increase inflationary expectations.

That's the secret that no-one can admit is part of the policy.

Mr. Weale is worried that inflation won't fall to the 2% target if there's more QE. He's either not aware of the policy of inflating away debt or is cunningly trying to divert attention from it.

ILW

wotsthat wrote: »

That's the secret that no-one can admit is part of the policy.

Mr. Weale is worried that inflation won't fall to the 2% target if there's more QE. He's either not aware of the policy of inflating away debt or is cunningly trying to divert attention from it.

Did hear one economist saying that the markets do not like that sort of action.

purch

Certainly, complacency is our biggest enemy.

Not just an expectation that 0.5% Base Rate will continue for ever, but the biggest thing that we need to guard against is an expectancy that the economic situation will not get any better, or can only get worse and that we as individuals are powerless to change things.

The economy is a collection of people, and it is people who have the power to change things.