Now that some of the fanfare has subsided, perhaps we can try and understand quantitative easingits meaning and likely consequences. Quantitative easing is a newer term, for what was always a normal part of Central Banks open market strategies.The only significance is the scale of this effort. The general objective is to decrease the long …
The struggle for competitive advantage has begun! Quantitative easing or printing money by Central Banks buying up Government Bonds is the means for driving down long term interest rates within the country, as well as obviously increasing the amount of cash floating in the economy. Ultimately it must make the currency less palatable to hold …
In recent months we have continually been bombarded with the threat of deflation. As though this is a bogeyman to be avoided at “all costs”. Deflation “per se” is not necessarily a consequence of not printing money, however, it might well be a stage that one needs to go through to correct past excesses. Deflation …
. So what is wrong in the economy? We are currently borrowing nearly 40p for every £1 we generate. Our interest rates are too low to enable a reasonable level of saving to generate a pension after 45 years. Our housing prices are too high. Our Government debt is …
I have always wondered about whether there is such a thing as a natural interest rate, interest rates have been used by countries for many things … probably the most important has been to regulate the value of its currency. The lower the interest rate the less outside funds attracted and the lower the value …
Let us go back and re-look at the events as they happened in the UK, with the help of a little hindsight. After a lot of dilly dallying Gordon decided on Nationalising the Northern Rock rather than let it go to the wall, or lend Branson many billions to take it over. Interfering …
With the American election out of the way and some of the dust settled we can perhaps have a look at the way that things are starting to shape. Bear in mind that to sustain our current level of GDP we need to maintain our current levels of consumption spending. We have seen above …
It has been almost comical watching the politicians falling over each other in the scramble to get on the fiscal band wagon … good old Keynesian stuff. If the economy is flagging give it a shot in the arm with fiscal medicine far quicker than any monetary stimulus. Then of course Gordo Brown starts …
Buckle up your seatbelts the Keynesians are back on top and we are in for a bumpy ride. Well Flash Gordon doesn’t like to be outdone. He has unveiled his “world saving” deal … rescuing banks getting money moving again. True to form our commentators have hailed it as a master stroke of genius …
It is perhaps time to look at the USA again. Capitalist Markets or the free economy can only work when unfettered from government interference. Since 1971 the USA economy has been run on a basis that they are the reserve currency of the world and they don't have to produce as much as they consume, …