More QE?
14 May 2012 [0 Comments | 3 views]
The Bank of England didn’t do much this month. The wise men who sit on its interest rate setting committee sat and cogitated, and then decided nothing was the best course. No change in interest rates, and no change in quantitative easing – or QE as those in a hurry call it.
Money illusion, myths, inflation and interest rates
24 Jan 2011 [0 Comments | 23 views]
The pound has been creeping up. Talk that interest rates will soon be rising is hitting a crescendo. They are connected, but the real danger right now lies with an illusion about money. Back in October there were 1.13 euros to the pound. Over the last few day the exchange rate has been rotating around [...]
Inflation sees its biggest monthly increase in 8 years
18 Jan 2011 [0 Comments | 110 views]
CPI annual inflation – that’s the version of inflation the Bank of England is supposed to target and maintain at around 2 per cent, hit 3.7 per cent in December, up from 3.3 per cent in November. RPI annual inflation was 4.8 per cent, up from 4.7 per cent in November. Is it time for [...]
Bank of England puzzles over dilemma
13 Jan 2011 [0 Comments | 222 views]
Today is the day the Bank of England will probably do nothing. Well, that’s a bit harsh. It will fret, and worry, and then fret some more. But then it will almost certainly do nothing. (Watch out for its announcement today to see if it actually surprises us all and does something, leaving us with egg [...]
Inflation rises, but pressure is still pushing down
16 Nov 2010 [0 Comments | 317 views]
Data out this morning showed that inflation rose in October, hitting 3.2 per cent, after sticking at 3.1 per cent over the three previous months. And once again, the inflation hawks will screech out their warnings, demand the Bank of England ends all talk of quantitative easing, and even starts contemplating a hike in interest [...]
Velocity matters so is the money supply really in such a state?
2 Nov 2010 [0 Comments | 477 views]
Maybe all this talk about the contracting or anaemic growth in broad money supply is hogwash. The last few days have seen a number of theories advanced suggesting that we are spending money at a faster rate, and that the rise in the velocity of money circulation is overcompensating for the fall in broad money [...]
Interest rates go negative, as markets fear inflation!
27 Oct 2010 [0 Comments | 612 views]
At first glance the headline doesn’t make sense. The yield on some US treasuries auctioned yesterday went negative, for the first time ever. And yet this is being interpreted as suggesting the markets are fearing inflation. What on earth is going on? The picture may start to become clearer when you realise that the particular [...]
Why quantitative easing is not waiting to release the inflation genie
22 Oct 2010 [0 Comments | 652 views]
Yesterday we wrote: “Fears over hyperinflation, leading to surging gold, are built on a myth.” See: Gold glistens for now, but does its sparkle deceive?. A comment suggested that while all this new money created by quantitative easing is not boosting the money supply at the moment, it is still lurking in the system, and [...]
Cracks turn to gaping chasm at heart of Bank of England rate setting committee
20 Oct 2010 [0 Comments | 291 views]
Oh to have been a fly on the wall at the most recent meeting of the Bank of England Monetary Policy Committee. This time around there was a three-way split. Meanwhile, new data out this morning on the growth of the UK money supply must surely lend support to the MPC faction wanting to see [...]
Mervyn King heralds the SOBER era, but how about some hair of the dog?
20 Oct 2010 [2 Comments | 346 views]
Acronyms: why is it that when central bankers, or even economists, think of a combination of words whose initials form a new word, they go for such dull alternatives? The best that can be said about the word NICE is that it’s … well, so twee, so bland, so very nice. And then there’s the [...]
