Five Wise Men say end QE now

Graham_Devon

The European Central Bank must end its unprecedented stimulus measures in order to prevent a new financial crisis from erupting in the eurozone, Germany's top economic advisers have warned.

Berlin's Council of Economic Experts - known as the country's five "wise men" - said the ECB must consider tapering its bond-buying measures early to avoid dangerous imbalances from building up in the bloc.

The Council's annual report delivered a scathing verdict on the ECB's recent measures, warning of the perils of record low interest rates.

"Monetary policy is leading to a build-up of risks to financial stability which could pave the way for a new financial crisis," they said.

http://www.telegraph.co.uk/finance/economics/11988053/QE-has-paved-the-way-for-a-new-financial-crisis-warn-Germanys-Wise-Men.html

Meanwhile, our own wise man, Mark Carney admits were in a property bubble this morning on the BBC.

Everyone else commented by blurting out 3 words.....two, followed by "Sherlock"!

Anyway, point being, the news appears to be a little 2006'ish at the moment, with "very wise" people pointing out the risks that have already happened but doing next to nothing about any of it.

padington

I think we are about two thirds in to a remarkable UK housing boom for a whole host of reasons and lots of people will make a lots of money out of it, namely British people.

There will be a crash eventually but no where near yet. Two more years at least, maybe ten of fairly reliable and steady boom times.

Bubbles don't just pop, they also grow to enormous sizes.

wymondham

padington wrote: »

Bubbles don't just pop, they also grow to enormous sizes.

especially when they are fueled by Government policy!

Kendall80

padington wrote: »

I think we are about two thirds in to a remarkable UK housing boom for a whole host of reasons and lots of people will make a lots of money out of it, namely British people.

There will be a crash eventually but no where near yet. Two more years at least, maybe ten of fairly reliable and steady boom times.

Bubbles don't just pop, they also grow to enormous sizes.

As long as there is a continual supply input and structural integrity isn't compromised the expansion could conceivably continue to infinity. Of course there'd be no space left in the universe for anything else then... including us. Hmm - maybe the housing policy does indeed require a rethink?

purch

One of the "5 Wise Men" is actually a woman FYG

You would hardly expect them to say any different. Germany was not particularly in favour of the ECB undertaking any form of QE, and they are unlikely to change their tune now, especially as it is very hard to quantify exactly what QE has/is achieving. It's quite easy to point to how things would have much been much worse without the QE, but to actually show precisely what it has done is a much harder task.

The Council of Economic Experts has a mandate set out in Law to advise the Government and the Bundesbank on Macroeconomic matters, and releases it's Annual Report in November, i.e. now.

Any German economist who advocates anything other than double digit interest rates will always be considered a Dove. :eek:

chucknorris

purch wrote: »

One of the "5 Wise Men" is actually a woman FYG

I'd bet that they aren't Irish, that's why Jesus wasn't born in Ireland, they couldn't find 3 wise men or a virgin.

Graham_Devon

Graham_Devon wrote: »

Anyway, point being, the news appears to be a little 2006'ish at the moment, with "very wise" people pointing out the risks that have already happened but doing next to nothing about any of it.

Hmm, and something else to back this thought up.

The telegraph have reported on a story of house prices rising today. But they don't go for the usual headline.... instead, they have chosen to throw up the headline "House prices to become even more unaffordable".

Seems to be several hints that the media is turning on what was, not so long ago, something that was glorified in the telegraph.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Meanwhile, our own wise man, Mark Carney admits were in a property bubble this morning on the BBC.

Can you link to that quote please.

If you're talking about the Peston interview, he said no such thing.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Can you link to that quote please.

If you're talking about the Peston interview, he said no such thing.

Sure. Let me just google that for you.

Mark Carney conceded there is a troubling bubble in the UK's property market

http://www.bbc.co.uk/news/business-34788970

Let me know if I can be of any further assistance.

ukcarper

Graham_Devon wrote: »

Sure. Let me just google that for you.



http://www.bbc.co.uk/news/business-34788970

Let me know if I can be of any further assistance.

So he didn't actually say there is a property bubble.

Carl31

ukcarper wrote: »

So he didn't actually say there is a property bubble.

not a property bubble, no

a bubble in the property market, yes

i wonder if he means the bubble from that old programme 'the prisoner', that would be an interesting turn of events