Tuesday 23 February 2010

QE back on the menu already.

Merv "The Swerve" King at the BoE has come out today (already!?) and hinted to us all that Quantative Easing will be back on the agenda again soon, due to stalling economic recovery. Quickly followed up by another MPC member, David Miles, stating now that his vote to suspend money-printing last time he was asked was a "finely balanced decision". That sure sounds like politician-speak for "I was wrong to vote for suspension of that program", to me.


As you might recall, I forecast QE would be resumed within 6 months -- it looks now like perhaps that forecast was too optimistic and I'm thinking perhaps it'll be closer to just 3 months or so abstention from momma's soothing money-printing teat(?). There there crybaby debt junkies, momma print it better again...

Note also once again we see the Party Line being wheeled out -- that our own recovery is delicate but sustained, the problems that are adversely affecting us are somewhere else. Our own massive over-extentions of debt both private and public are not the cause of our problems, no siree Bob. Previously the US was the party to blame for our problems, this time around we have the Euro bloc to blame it on. Pretty convenient huh? :-\

Watch the current government try to steadily devalue the Pound by 50% over time, so that the debts seem like they're actually manageable. They're half way done with that so far over the last couple of years. I hope that those foreign creditors who still hold (none of them are still buying) our Gilts don't get a whiff of this ruse and make that more than 50%, and over a lot less time. Yeah, like they are not already well aware and just watching to see if the next elected government can quickly get the message and set our collective house in order. If not, game over for the Pound.

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