Category Archives: Economy

QE2 proponents playing fast and loose with monetary data

FT columnists are developing a penchant for misusing UK monetary statistics. Last week, Sir Samuel Brittan claimed that “nominal money supply has been allowed to fall by 10% since September 2010”. No conventionally-defined aggregate has displayed such weakness. The Bank … Read More

Posted in Economy, Quantitative Easing and Extraordinary Monetary Measures | Leave a comment

A monetarist case against more UK QE

Conventional “quantitative easing” – such as Bank of England gilt purchases financed by creating bank reserves – works by boosting the (broad) money supply, with increased liquidity serving to stimulate spending on assets and goods / services, thereby lifting wealth, … Read More

Posted in Economy, Quantitative Easing and Extraordinary Monetary Measures, UK Inflation Prospects and Issues | 5 Comments

Did German reunification mean that the original concept of the Euro was doomed to failure?

After discussing Greece yesterday I wish today to take a look at the other side of the Euro zone coin which is the Federal Republic of Germany. In any currency union the strongest parts of it always pull in the … Read More

Posted in Economy, Euro zone Crisis, General Economics, Greek Financial Crisis | 26 Comments

A plan for reforming the UK economy, start with the banks right now!

At this moment in time the world economy is facing severe difficulties as we see problems in places such as Greece, Ireland and Portugal which have now spread to Italy and Spain as well. Indeed the last weekend has shown … Read More

Posted in Banking Reform, Banks, Economy, General Economics, Quantitative Easing and Extraordinary Monetary Measures, UK Inflation Prospects and Issues | 22 Comments

Plans for Greek default may cripple both the European Central Bank and the IMF

On Saturday evening news began to spread that the Euro zone was preparing plans for a Greek default and that this default would involve a 50% write off or haircut for her existing debts. As you can imagine the news created quite … Read More

Posted in Banks, Economy, Euro zone Crisis, General Economics, Greek Financial Crisis, Quantitative Easing and Extraordinary Monetary Measures | 28 Comments

Central banks to the rescue?

Markets were distinctly underwhelmed by “operation twist” but may be underestimating a recent and prospective shift in central bank policies: The Swiss National Bank has injected CHF220 billion into the domestic money market since the start of August, equivalent to … Read More

Posted in Banking Reform, Banks, Bear Market, Economy, Euro zone Crisis, Japan's Economic Situation, Quantitative Easing and Extraordinary Monetary Measures, The US Economy | 2 Comments

Market monitoring

I found myself shouting at the TV today, something I usually do only when GB or England are competing. In this case it was because of a comment on the stock market. The reporter said that markets were down and … Read More

Posted in Confidence, Economy, Investing, Personal Finance, Psychology, Share Price | Leave a comment

The G-20 statement is full of hype whilst the Greek reality is very different

The sharp sell-off in world equity markets which saw the US Dow Jones Industrial Average fall 283 points on Wednesday and then a further 391 points yesterday has led to an official response. These days official responses mostly amount to … Read More

Posted in Economy, Euro zone Crisis, General Economics, Greek Financial Crisis | 19 Comments

‘Operation Twist’: What Is It? How Could It Help? But Why Will It Not?

As the US launches $400bn ‘Operation Twist’ in a desperate attempt to kick-start the economy, concerns arise over how effective this will be. It’s true that something needs to be done and inflation restricts the options open to the Fed … Read More

Posted in Confidence, Economy, Investing, Quantitative Easing and Extraordinary Monetary Measures | Leave a comment

MPC on course for October QE2 launch

The “MPC-ometer” wrongly suggested that a narrow majority would vote for more QE at this month’s meeting. Yesterday’s minutes, however, revealed a further significant dovish shift, with most members now inclined towards action. Although Adam Posen remained isolated in the … Read More

Posted in Economy, Quantitative Easing and Extraordinary Monetary Measures, UK Inflation Prospects and Issues | 2 Comments
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