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If QE Was Withdrawn....
Comments
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Not if the infrastructure work was productive assets!! (like roads for example)Thats just another fake credit driven expansion. You will just get a bigger drop when the infrastructure work finishes.
QE and negative interest rates was an emergency measure to buy time to fix the underlying problems, by robbing savers, like Robert Maxwell bought time by robbing the pension fund. But that time has been squandered. The underlying problems remain.:(“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »Not if the infrastructure work was productive assets!! (like roads for example)
QE and negative interest rates was an emergency measure to buy time to fix the underlying problems, by robbing savers, like Robert Maxwell bought time by robbing the pension fund. But that time has been squandered. The underlying problems remain.:(
Isn't this the problem with many initiatives from RTB, privatisation, deregulation and easy credit, reckless mortgage lending and now pre-loading student debt. In addition oil revenue has been burned along the way too.
They are/were all buying time without resolving the underlying problems.
It has been going on fro at least the last 30 years.
QE/low interest rates are like the death throws."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 -
Glen_Clark wrote: »Not if the infrastructure work was productive assets!! (like roads for example)
So preserving privileges, bonuses and profits at everyone's expense doesn't count then... oh well, at least a lucrative position awaits the current crop of crooks redirecting public funds to preserve private profit. Heads they win, tails you lose.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
If what you are saying is true, we should have high inflation. Inflation is very low in the US and around the world in general. The price of commodities is falling, not going up. Most are at prices below 2007 levels. Stock markets are also well below pre crisis levels once inflation is taken into account.
I suspect a lot of the food inflation is being absorbed by the supermarkets.
Which commodities? Barley and wheat are almost back up to their pre-recession levels, even though we are nowhere near out of the woods. The price of sorghum is ridiculously high. Likewise corn/maize. As to meat, chicken is soaring. Beef is the highest it's even been these last couple of years. Lamb is down, but it seems those savings have not really been passed onto the consumer. (source: www.indexmundi.com)
I sometimes wonder if our inflation figures seem low just because they include a lot of items which are not essentials and rarely bought.0 -
The relationship between essentials inflation and average income is what matters to most people in their daily lives, in other words paying the bills. According to tullet prebon essentials inflation has outpaced average income by a factor of two over the last ten years and a factor of three over the last five years. That indicates an acceleration towards poverty for an increasing number of people.
And, sad to say, I don't see that trend easing any time soon.
Net migration (to Sept 2012) of 153,000. The government goes on about what an improvement this is, but if the births over deaths in 2012 come in around the same as 2011 (250,000 more births than deaths, give or take a few thousand) that's still another 400,000 extra people in the UK in a year. If that keeps up, and we continue not to build enough housing to meet demand, private rents will continue to outpace inflation.
And wages will stay depressed. Maybe there aren't as many new school leavers/college and uni graduates in a year as the birth rate would suggest, but that's still a significant expansion of the workforce each year, without the corresponding increase in work opportunities.
There certainly seems to be an acceleration towards poorer circumstances, especially for working people. Working people as a group are the main reason for the increase in housing benefit claimants, now over 5 million. http://touchstoneblog.org.uk/2012/06/in-work-households-push-housing-benefit-claimants-past-5-million
If the rise in essential items inflation continues, without any corresponding increase in wages, I don't see how the government will ever be able to turn QE off.0 -
Glen_Clark wrote: »Not if the infrastructure work was productive assets!! (like roads for example)
QE and negative interest rates was an emergency measure to buy time to fix the underlying problems, by robbing savers, like Robert Maxwell bought time by robbing the pension fund. But that time has been squandered. The underlying problems remain.:(
Road works have the habbit of taking a long time and slow down traffic in the meantime, so short term unproductive. Besides the government already has big infrastructure projects in the pipeline.0 -
If the rise in essential items inflation continues, without any corresponding increase in wages, I don't see how the government will ever be able to turn QE off.
Only when it reaches the stage where the pound is worthless, so no point in printing it
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Anything worthwhile is likely to be unproductive in the short term. We have had all the quick fixes.Road works have the habbit of taking a long time and slow down traffic in the meantime, so short term unproductive. Besides the government already has big infrastructure projects in the pipeline.
PS: I take little comfort from the Governments big infrastructure projects in the pipeline because the only ones that come to fruition tend to be white elephants like the Olympics, and PFI built stuff that costs the taxpayer 3 times as much as it should.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »Anything worthwhile is likely to be unproductive in the short term. We have had all the quick fixes.
PS: I take little comfort from the Governments big infrastructure projects in the pipeline because the only ones that come to fruition tend to be white elephants like the Olympics, and PFI built stuff that costs the taxpayer 3 times as much as it should.
HS2 is the next on on the blocks. If it gets delivered in less than 2 x budget it will be doing well. There is no money/plans to build anything at the top end, to help it integrate and regenerate, that I have seen.
The much heralded new bridge over the Mersey will be a toll bridge. the existing bridge has been in need of supplement for decades."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 -
Perhaps it isn't QE here we should be worrying about, but the effect of removing QE in ChinaCredit crunch fears hit China stocks
Chinese stocks fall further, entering bear market territory, after the central bank indicates its credit-tightening policy will continue.0
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