Quantitative Easing from an investor's perspective

theGrinch

lvader wrote: »

That is because the only other alternative was cutting government expenditure by around 25%, since the Tories didn't win a majority that was never going to happen.

Expenditure as a % of GDP has been rising since the mid 1970s. No government, not even Mrs Thatchers has sustainability cut it to under 36% of GDP. We are the new Belgium

atush

sabretoothtigger wrote: »

Thats what Ben Bernanke said. He literally has nothing to do with the printing of money, what a clever guy and always very carefully correct in his answers.
I guess if I push someone in front of a train I can explain similarly, train did it. I wonder if the court would let me off

An interesting thought even if it does confuse the production of something with cause and effect.

lvader

theGrinch wrote: »

Expenditure as a % of GDP has been rising since the mid 1970s. No government, not even Mrs Thatchers has sustainability cut it to under 36% of GDP. We are the new Belgium

I agree that it probably still wouldn't have happened even with a strong tory majority so talking of cuts as an alternatice to QE is purely a hypothetical exercise.

Thrugelmir

cepheus wrote: »

It's an irony that the average person would be better off if houses got cheaper!

Don't remember the Labour Government making any attempt to control house prices. Totally the reverse. As merely emphasised the notion of a booming economy. Where debt was King.

Thrugelmir

mspoppins wrote: »

Hi,

Sorry, this might be a bit off topic but can I ask what do you think about Quantitative Easing (AKA "printing money")?

I have to write an essay and I was hoping some nice people with a background in investments could help me out

So, how do investors/brokers view the QE? Also, is there any evidence that the rounds of QE has helped the British economy so far?

Thanks!

More interesting will be the impact post QE. When the influence of QE is no longer. QE served a purpose in that enabled the banking system to continue to function. Banks have and will contract to their balance sheets. The effect being to reduce the money supply.
Like a drug addict going through cold turkey. Credit conditions will remain tight for a long time yet. Possibly another decade. Before the situation normalises.

Glen_Clark

Thrugelmir wrote: »

Don't remember the Labour Government making any attempt to control house prices. Totally the reverse. As merely emphasised the notion of a booming economy. Where debt was King.

I think you mean New Labour (the Tory B Team.)
We haven't had a Labour Government since 1979.

CLAPTON

Glen_Clark wrote: »

I think you mean New Labour (the Tory B Team.)
We haven't had a Labour Government since 1979.

maybe, maybe not

however pre 1979 labour governments presided over huge house price inflation

Glen_Clark

cepheus wrote: »

In fact for most of us moving up the housing ladder rising house prices makes us poorer since it is something else getting more expensive.

Indeed. And higher housing costs are causing higher housing benefit claims which are making we taxpayers poorer. 25% of those in private rented accommodation are on housing benefit. They are usually portayed as layabouts, yet many are working but the basic wage is no longer enough to pay the rent on the cheapest available property in the area.
But perhaps enough people will be conned into thinking higher house prices makes them better off to vote for Osborne - The Government doesn't need a majority to get elected.

Glen_Clark

Interesting piece in the FT saying that whilst equity prices have risen 40%, Company Earnings are about the same. So in real terms our shares, just like our houses, are not worth any more. We still have the same share of the same company producing the same income.

Glen_Clark

CLAPTON wrote: »

maybe, maybe not

however pre 1979 labour governments presided over huge house price inflation

The difference is that wages were inflated at the same time, and interest rates were near to inflation.
These days workers and savers are getting below inflation.
The only ones to benefit are those with multiple properties and land.
QE is simply robbing the poor workers to give to the idle rich.