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If QE Was Withdrawn....
Comments
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Yes food prices have gone up a lot but I dont think this is down to QE. If you take a long term view on food prices then the average inflation isn't that high.
Did QE help directly or indirectly devalue the pound?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Did QE help directly or indirectly devalue the pound?
It's hard to say, the pound was over valued before the crisis so I think it would have dropped anyway. There are plenty of currencies that have lost value and not done QE. If you take away the initial shock to the pound in 2008/2009 it has done better than most currencies.0 -
Thats it DVD players skew the figures! How about the fact you can buy a pair of Jeans now cheaper than 20 years ago. A lot of the increeases in petrol prices are extra taxes rather than true inflation. Yes food prices have gone up a lot but I dont think this is down to QE. If you take a long term view on food prices then the average inflation isn't that high.
Agricultural land prices have tripled since QE began, which feeds through to farm rents and food prices. Higher diesel prices is inflation whatever its caused by, and diesel is needed to produce and transport food.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
When the Euro was introduced you got 1.4 Euros to the pound. So we are down about 20% even against the Euro!!It's hard to say, the pound was over valued before the crisis so I think it would have dropped anyway. There are plenty of currencies that have lost value and not done QE. If you take away the initial shock to the pound in 2008/2009 it has done better than most currencies.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
But binge credit hasn't stopped has it?This I can agree with, this is the consequence of binge credit, once it stopped this was always going to happen.
Now Osborne is throwing taxpayers borrowed money at interest free loans on £600k sub prime mortgages to pump up house prices. What could be more reckless than that?“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »When the Euro was introduced you got 1.4 Euros to the pound. So we are down about 20% even against the Euro!!
It also reached parity and the pound gained 4 years on the trot after that. There are lots of things that determin exchange rates, without QE the pound could have been worse off since a default would have looked very likely.0 -
Glen_Clark wrote: »But binge credit hasn't stopped has it?
Now Osborne is throwing taxpayers borrowed money at interest free loans on £600k sub prime mortgages to pump up house prices. What could be more reckless than that?
The only way to stop the credit is to stop spending, that means depression.0 -
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Thats just another fake credit driven expansion. You will just get a bigger drop when the infrastructure work finishes.0
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credit is not always bad.
credit for investment can a good thing. the reason for concentrating investment on infrastructure is that improved infrastructure encourages further investment, in the private sector. so the effects don't just dry up when the initial investment has finished.
credit for speculation is unsustainable. i.e. pumping up asset prices, without making any real new investment.
credit for consumer consumption is at best a waste of the consumer's money, and at worst unsustainable.
the other bad form of credit we've had in recent years is transferring private debt to public debt, when the state has taken on the liabilities of banks.
a credit-driven expansion is only fake if (or to the extent that) there is no real investment involved.0
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