Bank of England Madness

[mafya]

Don't worry, helicopter money may be on its way= http://uk.businessinsider.com/morgan-stanley-on-the-impact-of-brexit-and-the-introduction-of-helicopter-money-2016-6

 

https://next.ft.com/content/a36c5a26-5997-11e6-9f70-badea1b336d4

 

https://www.theguardian.com/commentisfree/2016/aug/05/recession-bank-england-money-uk-households

 

I so totally agree

 

They should just give us all a thousand quid each instead!

 

It's known as helicopter money and as I mentioned in my earlier post it may happen to keep the economy from crashing....

[tinfoilhat]

It's known as helicopter money and as I mentioned in my earlier post it may happen to keep the economy from crashing....

 

Well you should have said free money for us thickos

[Cyclone]

.......little to do with Brexit! interest rates have been historically low for years!......Brexit is only a fly in the ointment of what is really going on in the worlds economy!

 

Historically low and were predicted to rise.

Until brexit was voted for, and now they've been cut in half.

 

---------- Post added 06-08-2016 at 22:48 ----------

 

yes there is no evidence it works

 

Is there evidence that some alternative works?

[Beauchiefs]

Historically low and were predicted to rise.

Until brexit was voted for, and now they've been cut in half.

 

---------- Post added 06-08-2016 at 22:48 ----------

 

 

Is there evidence that some alternative works?

 

This is the MADNESS nothing else has been tested

[El Cid]

This is the MADNESS nothing else has been tested

 

Wouldnt the normal process be to let the banks go bust, or just let the recession happen; let house prices and the stock market crash.

[I1L2T3]

This is the MADNESS nothing else has been tested

 

Indeed. As I mentioned earlier QE is to keep the banking system afloat. It has no other purpose. There is no guarantee that the benefits the banks get from QE will be passed to consumers. The BofE can ask very nicely that banks do pass on the benefits but there are no guarantees. The banks can simply suck in the cash and it is actually quite hard to get that QE money doing real stuff in the real economy. Yes it might help keep house prices high but is that really what we want?

 

Now, as you say nothing else has been tried. Maybe every pound of QE should be matched by some BofE-backed infrastructure spend, for example

 

---------- Post added 06-08-2016 at 23:29 ----------

 

Wouldnt the normal process be to let the banks go bust, or just let the recession happen; let house prices and the stock market crash.

 

The process seems to be full or part nationalisation of insolvent banks followed by a stabilisation process that can involve breaking up of a bank into smaller units then sell-off back to the private sector. That is all totally do-able and rational. The only barrier is ideological opposition to any form of nationalisation.

Some banks may simply be insolvent and let go with the compensation schemes kicking in.

 

They'll never let house prices crash though. Never.

[Cyclone]

This is the MADNESS nothing else has been tested

 

No central bank, in recorded history has ever tried to raise interest rates or not perform QE? Because those are the only actions that they have to work with. Either QE or not, interest rates up/down/same.

There are no other actions to test.

[I1L2T3]

No central bank, in recorded history has ever tried to raise interest rates or not perform QE? Because those are the only actions that they have to work with. Either QE or not, interest rates up/down/same.

There are no other actions to test.

 

That may be true within the current remit but the point being made, and it is correct, is that while QE has helped stabilise the banking system it has not helped the economy move forward out of the mire we've been in since 2008. It can't go on for ever.

 

So maybe what is required is a shift in the remit of central banks. Maybe for example backing infrastructure, or helicopter money, or even a solid role in policing how QE money is used by the banks.

 

There are lots of options including carrying on exactly as now, which actually could be the worst option because endless QE without conditions on banks means they will endlessly expect to be bailed out.

[Beauchiefs]

It only has 3 options with each of 2 things it can control.

 

Rates up/same/down

QE more/same/less

 

To claim that the previous QE and the low rates have had no impact is obviously not true, so doing more of the same will continue to have a similar affect to that already achieved.

Doing the opposite really would be madness.

 

Japans industry is still stagnating despite all the years of lowering interest rates.

[mossdog]

Historically low and were predicted to rise.

Until brexit was voted for, and now they've been cut in half.

 

---------- Post added 06-08-2016 at 22:48 ----------

 

 

Is there evidence that some alternative works?

..........credit and debt have exploded. In fact, total global credit is now more than 300% of global GDP......what's round the corner next?