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Green across the Board as printing takes off
Comments
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By what mechanism? I dont see much evidence that the UKs QE has led to excess cash in the real economy
Bank of England created 200 billion of QE on March 2009 whilst the US released 15 - 85 billion a month off and on. What happened to property prices in London since then ?
Now Europe's first wave of QE is one trillion, same things going are going to happen. London banks get to play with the money. City boys get their bonus. London gets an uplift from bonuses. Hedge funds see the dynamic, like the safe haven / capital appreciation / guaranteed extra yield thing, money pours into London.
The bar where the bank robbers divvy up the dosh, always tends to benefit nicely.
It also probably helps that the bankers are invested in London property themselves also, so self interest plays a part.Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0 -
Hedge funds see the dynamic, like the safe haven / capital appreciation / guaranteed extra yield thing, money pours into London.
I needed to add a Europe fund to my portfolio. I chose a tracker over an actively managed fund hedged back to sterling. The hedged fund was up 3% on Friday alone.
If only I could make the right choice every now and then.
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I needed to add a Europe fund to my portfolio. I chose a tracker over an actively managed fund hedged back to sterling.
Back when Greece was (first!) having a major wobble, with Cyprus joining in just for a laugh, I bought into Europe via some ITs, and a REIT, all on big discounts. I've forgotten one of the ITs, but the main one was Jupiter European Opportunities, which did *very* well for me over just a few months. I sold that and went back to roughly neutral on European equity, but we still hold TR Property, which has more than double in value since acquisition.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
And just after hitting the button, I remembered that the other IT was Henderson European Focus.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Glen_Clark wrote: »In the run up to QE the BoE smuggled £180 billion in gilts to the banks via the Special Liquidity Scheme and then promptly bought them all straight back again.
Smuggled? There was no secret made regards SLS, and the gilts were in exchange for mortgage-backed and other securities. It was doing exactly what it said on the tin, exchanging illiquid assets for more easily tradeable ones.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Great news for investors ... I spent most of 2014 building up positions in peripheral Europe - valuations in Italy are so good you only need to get away from a negative narrative for a bit to see investments potentially double
I think property's probably a sensible thing to build up positions in - I added to Fidelity's Global Property, and maybe add to London property too
Caveat, however: No investment strategy has ever dealt with markets so artificially inflated with QE ... We expected the tide to be going out this year - in fact the US are still continuing 'stealth QE' in the form of bond reinvestment anyway
So I'd imagine the bull run will continue - the FTSE 100 will break 7,000, India and US will go into real bubble territory - and presumably we'll look back on QE as a failed experiment when markets crash 90% at some point
I'll certainly be keeping an eye on those SMA 300s0 -
Not quite the same;Bank of England created 200 billion of QE on March 2009 whilst the US released 15 - 85 billion a month off and on. What happened to property prices in London since then ?
Now Europe's first wave of QE is one trillion, same things going are going to happen.
1) The rest of Europe doesn't have Britain's restrictive planning laws. If property rices start going up, builders will be allowed to build more. The supply of housing is increased, usual rules of supply and demand apply, which brings the price back down again. So, unlike in England, property speculation will not be a taxpayer guaranteed bet for landlords. Which increases the possibility of the QE money being invested in something productive like manufacturing things that can be sold abroad instead. Which will generate real wealth that reduces the National debt, rather than double it in 4 years like Osborne has done.
2) Compared to GDP the money 'printing' proposed in Europe is only about one third of what Britain has 'printed' so far.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Ryan_Futuristics wrote: »we'll look back on QE as a failed experiment
QE hasn't failed, its working just as intended. Its bailed out the bankers, who then gave Tony Blair a £500k part time job as soon as he left office. Its preserved the Status Quo, and robbed the poor to shower the rich with unearned income.
This isn't Capitalism, its Socialism for the Rich.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
gadgetmind wrote: »the gilts were in exchange for mortgage-backed ..
You mean sub prime mortgage backed ...
Then the Government pumped up house prices to stop this sub prime junk from going bust, which has cost the productive side of the economy far more. Particularly as the long suffering taxpayer is also on the hook through Housing Benefit to make up the difference between wages and rents.“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 quite the same;
1) The rest of Europe doesn't have Britain's restrictive planning laws. If property rices start going up, builders will be allowed to build more. The supply of housing is increased, usual rules of supply and demand apply, which brings the price back down again. So, unlike in England, property speculation will not be a taxpayer guaranteed bet for landlords. Which increases the possibility of the QE money being invested in something productive like manufacturing things that can be sold abroad instead. Which will generate real wealth that reduces the National debt, rather than double it in 4 years like Osborne has done.
2) Compared to GDP the money 'printing' proposed in Europe is only about one third of what Britain has 'printed' so far.
1) Why do you think EU QE will only result in loose money being spent just in Europe ? It's like thinking smoke will stay out of the 'no smoking' section in the pub. It won't. The money will be attracted to london partly because land is rare and planning rules strict and even more so now because the currency gaining strength in relation to the euro. Which is a safe place for European capital to reside and gain a yield. Also that money will be allocated to be spent and commissions earnt in the European capital of finance which is ... London. All of which creates some sweet serendipity for London.
2) You've got it the wrong way around according to Wikipedia, UK 'printed' 375 billion, which is about a third of what Europe intends on printing.
http://en.m.wikipedia.org/wiki/Quantitative_easing
Also it's worth noting that niether the US nor UK managed to stick with just one wave of QE Once they started ...Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.0
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