I’m not sure though that he should have been quite as definite about no coalition “even” with the SNP, although that doesn’t ruile out confidence & supply.
I would be interested to see if the average voter can see the difference. We political nerds understand the difference between a coalition and C&S, but for the voter on the Clapham omnibus he is "working with the SNP", and his popularity, especially post Holyrood 2016 when the SNP hang him out to dry is going to suffer for it.
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Various voxpox with no clear picture. SKY News Joey Jones indicating many voters wary of disclosing voting intention but his impression is that the SNP inclined are generally more open about their support as referenced by the referendum campaign.
Sky is offering a ridiculously biased coverage of Scotland. I wouldn't be surprised if they get Ofcommed over it.
Are they required to be impartial?
Yes. Broadcast news in the UK must be impartial.
How does that work with Russia Today? Or is it only broadcasters 'domiciled' here? (I'm not even sure where Sky is based).
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Various voxpox with no clear picture. SKY News Joey Jones indicating many voters wary of disclosing voting intention but his impression is that the SNP inclined are generally more open about their support as referenced by the referendum campaign.
Sky is offering a ridiculously biased coverage of Scotland. I wouldn't be surprised if they get Ofcommed over it.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Various voxpox with no clear picture. SKY News Joey Jones indicating many voters wary of disclosing voting intention but his impression is that the SNP inclined are generally more open about their support as referenced by the referendum campaign.
Sky is offering a ridiculously biased coverage of Scotland. I wouldn't be surprised if they get Ofcommed over it.
Are they required to be impartial?
Yes. Broadcast news in the UK must be impartial.
How does that work with Russia Today? Or is it only broadcasters 'domiciled' here? (I'm not even sure where Sky is based).
They are also only required to be impartial at the top level, not in every individual show. Its perfectly legal to kick one party for doing something, so long as you kick other parties for doing the same thing when and if they do it. Commentators can rubbish policies, so long as other commentators rubbish policies of other parties so it appears to be balanced in the round. They don't do this even a little bit of course, but that's the theory.
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
Isn't that likely to be a tiny bit inflationary as the money supply in shoppers hands increases, shops are likely to put prices up to harvest it.
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Various voxpox with no clear picture. SKY News Joey Jones indicating many voters wary of disclosing voting intention but his impression is that the SNP inclined are generally more open about their support as referenced by the referendum campaign.
Sky is offering a ridiculously biased coverage of Scotland. I wouldn't be surprised if they get Ofcommed over it.
Are they required to be impartial?
Yes. Broadcast news in the UK must be impartial.
How does that work with Russia Today? Or is it only broadcasters 'domiciled' here? (I'm not even sure where Sky is based).
I'm not sure how RT gets away with it. I do know, for example, Keiser got in trouble during Purdah on the Scottish Referendum and Stacey Herbert had to keep stopping him from mentioning it.
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Various voxpox with no clear picture. SKY News Joey Jones indicating many voters wary of disclosing voting intention but his impression is that the SNP inclined are generally more open about their support as referenced by the referendum campaign.
Sky is offering a ridiculously biased coverage of Scotland. I wouldn't be surprised if they get Ofcommed over it.
Are they required to be impartial?
Yes. Broadcast news in the UK must be impartial.
What did you find partial about it ?
Their piece on the GE from a Scottish perspective which ran all day yesterday 1. No detail on Ashcroft (piece probably made before it) 2. Was an advert for tactical voting focusing on Lib Dems in Gordon. 3. The Summary went (paraphrasing) "like everything else in this extraordinary election no-one knows how the Scottish Election will turn out but people are making up their minds" cut to two Talking Heads clearly giving an opinion on the Debate and both picking a Miliband win.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
Doesn't that reinforce my 'p.s.'? Essentially, once the velocity returns to something like normal, the QE must be withdrawn, else prices shoot up (assuming T is constant)?
And that is why QE is structured the way it is - with gilts owned by the Bank of England. As velocity of money increases, the Bank of England can (slowly) withdraw QE by only rolling over a portion of its gilt holdings.
I would estimate they'll let QE slowly wash out the system on a 10 to 15 year view. But, should inflation shoot up, then they have the option to withdraw money from the system much more effectively (and quickly) than by raising rates alone.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
There is a difference.
The Bank of England may have bought a gilt off a bank, but it received in return, a gilt. It was a purchase.
To be equivalent, the government would have sent everyone cheques to everyone, and would have received in return, a bunch of flat screen TVs.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
It's not the same at all, both in its effect so far, and also in the future. Sending £1000 to all adults represents a permanent increase in the money supply. QE is temporary and can be reversed (essentially the BoE sells the debt it holds for cash and then writes it out of its balance sheet). In some ways QE is limited in effectiveness compared with the former because a lot of it won't have made it into the frontline economy, but that probably explains why inflation hasn't taken off. QE has also served a useful purpose (depending on your viewpoint) of keeping down the cost of Govt debt, and in fact providing a source of Govt debt.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
Isn't that likely to be a tiny bit inflationary as the money supply in shoppers hands increases, shops are likely to put prices up to harvest it.
It depends what people do with those cheques. If they just bought gilts the whole thing would just be tail-chasing.
The only value of these models that I can see is to make the distinction between endogenous and exogenous variables. In a rough-and-ready way, of course. Never assume that what's expressed in an equation is therefore exact.
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
Isn't that likely to be a tiny bit inflationary as the money supply in shoppers hands increases, shops are likely to put prices up to harvest it.
Alex Salmond is less than five minutes into his canvass of Port Elphinstone, an affluent village in the heart of Aberdeenshire, when he stops someone jumping out of a window.
For the adoring crowds who have queued at packed signings of Salmond’s recently published memoir of last year’s independence referendum, The Dream Shall Never Die, the performance of such minor miracles is probably par for the course.
But for 16-year-old Lewis Wilson it is, momentarily, a great embarrassment. There you are, preparing to jump out of your high bedroom window wearing some inadequate padding while your wee brother and two pals wait to capture the moment on their camera phones. Then, coincidentally, the former first minister of Scotland arrives, accompanied by a team of canary-yellow Scottish National party activists, a journalist and a professional photographer.
Salmond immediately recognises the leg-breaking potential of the arrangement and proceeds to talk the lad down from his ledge. “Wouldn’t you prefer to get your photo taken with me?” he calls up. It is barely a question. Older and wiser men have found no reason to refuse the infamous Salmond photocall.
Safely back on the ground, Lewis explains that his mum did some leafleting for the yes campaign during the referendum, but that he was too young to support Salmond’s cause himself. “He’s just a lovely man,” he says, as the candidate for the Westminster seat of Gordon strides off to the next doorstep.
FOR PBers WHO STRUGGLE TO UNDERSTAND SALMOND'S PHENOMINAL POLITICAL REACH THEN READ THE ABOVE.AND LEARN.
Only if you promise to read a dictionary and learn. Phenominal?
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
There is a difference.
The Bank of England may have bought a gilt off a bank, but it received in return, a gilt. It was a purchase.
To be equivalent, the government would have sent everyone cheques to everyone, and would have received in return, a bunch of flat screen TVs.
Frankly much better value than giving it to bankers.
Pumping money into to an endemically corrupt cartel is hardly good value for the nation.
While eagerly awaiting the Saturday sighting of Jacks ARSE, punters may like to peruse the odds for the Leicester City match at home to Swansea. Swansea do have a number of injuries both defensively and offensively and look set for a mid table finish.
Leicester have staged a Lazarus like revival over the last couple of games and will play an attacking formation. The team is in good spirits with few injuries and several players hitting their form.
Nonetheless we have won only six league games all season and away at Swansea we lost 2 nil in what was widely regarded as the poorest team performance of the season. Our home form is poor.
The bookies odds are favouring a Leicester win. I believe that the foxes are going to have to attack but will be unable to break through the tight Swansea midfield. There will be goals but mostly for Swansea. This is going to be a reality check on the absurd optimism of my fellow fans.
@Dair If you give money to everyone, it will not increase the value of assets. Without asset inflation, people might notice that the economy is "fecked".
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
Has been done in the USA iirc, not such a bonkers idea.
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
Has been done in the USA iirc, not such a bonkers idea.
Yeah the Bush Tax Refund - was my actual example at the start of the debate.
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
Has been done in the USA iirc, not such a bonkers idea.
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
If you changed the currency so that everybody now had £10 for every £1 they currently had, would anyone be richer?
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
Has been done in the USA iirc, not such a bonkers idea.
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Various voxpox with no clear picture. SKY News Joey Jones indicating many voters wary of disclosing voting intention but his impression is that the SNP inclined are generally more open about their support as referenced by the referendum campaign.
The only way Danny will survive is if sufficient Unionists coalesce behind him. Sadly he's public enemy number 1 with Labour for working with Osborne and Tories are notoriously non-tactical!
You're probably correct, although it wouldn't be the first time in electoral history that the yellow peril have defied political gravity and election night always throws up unforeseen results - Voters can be buggers !!
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
There is a difference.
The Bank of England may have bought a gilt off a bank, but it received in return, a gilt. It was a purchase.
To be equivalent, the government would have sent everyone cheques to everyone, and would have received in return, a bunch of flat screen TVs.
Frankly much better value than giving it to bankers.
Pumping money into to an endemically corrupt cartel is hardly good value for the nation.
@Pulpstar The "Fed" printed "money" then allowed the banks to "front run" the purchase of the gilts. RCS reckons that this makes economic sense, and it may well do. But it is smoke and mirrors economics that hides an underlying problem.
David, by far the biggest and most serious fly in the ointment remains our very serious trade deficit which is steadily impoverishing the country. It is also indicative of a series of underlying problems. It shows that rather than suffering the supposed horrors of austerity we in fact have excess demand in our economy that is sucking in imports we cannot afford. It shows we have major problems with competitiveness in that we cannot sell enough goods and services to pay for our consumption. This is partly a consequence of our low productivity and partly a consequence of our poor educational attainment.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship has not brought our standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
@rcs1000 So, QE is market intervention for those in greatest need?
QE was a successful attempt to avoid deflation, that has had the unintended consequence of boosting asset values - something that benefits the wealthy disproportionately.
A lot that's hard to argue with. "A shared party system is central to ‘British’ politics, and if the SNP supplant Labour in Scotland, it will be “harder than ever to talk about ‘British politics". It's why the results defacto impact on making Scotland much more clearly its own entity, in a way that cannot be argued, is just as important as the immediate impact (being able to hold Labour's feet to the fire if they want to be in power). People arguing its unfair the SNP can do that doesn't help the former either, given it is totally fair (it would be a bit unfair if 40+MPs did not have a strong impact), even if one does not like the SNPs ultimate goal.
SKY News reporting from Danny Alexander's constituency in a piece likely to be shown throughout the morning.
And the verdict is adios Danny?
Apparently a LibDem poll has Danny ahead by 22%! Free money!!!
It must be quite the art to get the result your commissioners want while trying not to make it so blatant even they cannot accept the result at face value.
@Pulpstar The "Fed" printed "money" then allowed the banks to "front run" the purchase of the gilts. RCS reckons that this makes economic sense, and it may well do. But it is smoke and mirrors economics that hides an underlying problem.
How do you believe the banks "front run" the gilt purchases?
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
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Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
They are both attempts to increase the money supply. One is permanent, one is temporary.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship had not brought out standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
Yep. How many years do you give it before we the public can no longer ignore the larger systemic issues in play? We are very good at kicking the can down the road, economically, politically and constitutionally, but even our ability to do that is finite.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Globn the 1700s if you like. It ended badly, for all concerned.
I understand the theory. I don't understand what you are claiming.
There is no difference in terms of effect to giving printed money to individuals is comparison to giving the printed money to banks. Assuming the banks don't transfer the money out of the economy (remember not to rely on closed system analysis).
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
To be equivalent, the government would have sent everyone cheques to everyone, and would have received in return, a bunch of flat screen TVs.
Frankly much better value than giving it to bankers.
Pumping money into to an endemically corrupt cartel is hardly good value for the nation.
What money was "sent" to bankers?
Easy credit and debt guarantees. They still have £1trillion of taxpayer intervention they can't live without.
RBS got £49 billion of taxpayer money LBG about £20 billion.
@Dair If you give money to everyone, it will not increase the value of assets. Without asset inflation, people might notice that the economy is "fecked".
Directly giving people money would not necessarily help the economy in terms of spending. It might be saved. if it was spent it might be spent on imports. It might not necessarily help investment.
The govt buying its bonds back, coupled with lower inflation, should help the economy through businesses borrowing to invest and creating local jobs, not jobs in China.
A Bank of England report estimated that the £200bn worth of bonds it bought between March and November 2009 helped to increase the UK's annual economic output by between 1.5% and 2%. That meant the effects of the programme had been "economically significant".
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
They are both attempts to increase the money supply. One is permanent, one is temporary.
I would modify that slightly: one has the ability to be withdrawn if it causes problems, the other does not.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
....
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
It's not the same at all, both in its effect so far, and also in the future. Sending £1000 to all adults represents a permanent increase in the money supply. QE is temporary and can be reversed (essentially the BoE sells the debt it holds for cash and then writes it out of its balance sheet). In some ways QE is limited in effectiveness compared with the former because a lot of it won't have made it into the frontline economy, but that probably explains why inflation hasn't taken off. QE has also served a useful purpose (depending on your viewpoint) of keeping down the cost of Govt debt, and in fact providing a source of Govt debt.
Thank you for talking an oasis of sense in a desert of rubbish.
David, by far the biggest and most serious fly in the ointment remains our very serious trade deficit which is steadily impoverishing the country. It is also indicative of a series of underlying problems. It shows that rather than suffering the supposed horrors of austerity we in fact have excess demand in our economy that is sucking in imports we cannot afford. It shows we have major problems with competitiveness in that we cannot sell enough goods and services to pay for our consumption. This is partly a consequence of our low productivity and partly a consequence of our poor educational attainment.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship has not brought our standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
If you wanted to live in a country with a trade surplus, you should have voted Yes.
There is little possibility of England returning to trade surplus, it lacks even basic resources for its population and the position is in a continued downward spiral. The same applies to Wales and Northern Ireland. The productivity rises required in any of these three countries are far beyond what you can reasonably expect.
David, by far the biggest and most serious fly in the ointment remains our very serious trade deficit which is steadily impoverishing the country. It is also indicative of a series of underlying problems. It shows that rather than suffering the supposed horrors of austerity we in fact have excess demand in our economy that is sucking in imports we cannot afford. It shows we have major problems with competitiveness in that we cannot sell enough goods and services to pay for our consumption. This is partly a consequence of our low productivity and partly a consequence of our poor educational attainment.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship has not brought our standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
The breaking news is that WIND is reporting to the JNN the contents of the latest ARSE with added APLOMB 2015 General Election and "JackW Dozen" Projections. (Changes From 14th April Projection) :
Con 302 (-3) .. Lab 252 (+3) .. LibDem 28 (-2) .. SNP 40 (+2) .. PC 2 .. NI 18 .. UKIP 2 .. Respect 1 .. Green 1 .. Ind 0 .. Speaker 1
"JackW Dozen" - 13 seats that will shape the General Election result :
Bury North - Con Hold Pudsey - Likely Con Hold Broxtowe - TCTC Warwickshire North - TCTC Cambridge - LibDem Hold Ipswich - Con Hold Watford - TCTC Croydon Central - Con Hold Enfield North - Likely Lab Gain Cornwall North - TCTC Great Yarmouth - Con Hold Vale of Glamorgan - Con Hold Ochil and South Perthshire - SNP Gain
Changes From 14 Apr - No Change - First Showing Of "No Change" In Successive Projections
TCTC - Too Close To Call - Less than 500 votes Likely Hold/Gain - 500 - 2500 votes Gain/Hold - Over 2500 .......................................................................................
ARSE is sponsored by Auchentennach Fine Pies (Est 1745)
WIND - Whimsical Independent News Division JNN - Jacobite News Network ARSE - Anonymous Random Selection of Electors APLOMB - Auchentennach Pies Leading Outsales Mainland Britain
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
They are both attempts to increase the money supply. One is permanent, one is temporary.
Actually in the long term both are temporary as currency deflation restores the default. The benefit is from the time lag between these events. It's also the limit on how much you can do.
Prices are so volatile this morning in the Scottish constituencies that my write-up of the SNP constituency markets has to be postponed for a day. In the meantime, I hope you can content yourself with the three I've already done:
Shock horror!! Someone paid by Labour saying Tories aren't doing well. Stop the presses......
Even the biased can be right, on occasion.
Although on this occasion I take issue with him saying the Tories lost energy and momentum. The problem was they never really gained momentum; they had edged up at the start of the year, but have been looking for a surge which has not and apparently will not materialise. They also have not really been panicking, which again has been one of their problems, as they should have a long time ago.
The next week will be critical. Both parties need to offer something fresh to retain interest and gain momentum. I suspect only one party will do that. Arguably the Tories have been keeping their powder dry. It will be interesting to see whether that is actually the case or that they are just a bit rubbish.
Personally, I think Labour have been doing very well to keep it competative against prevailing winds, but may see things move away from them soon.
The govt buying its bonds back, coupled with lower inflation, should help the economy through businesses borrowing to invest and creating local jobs, not jobs in China.
Arguably the Tories have been keeping their powder dry.
The thought occurs that they will have the freshest and most untouched supplies of powder of any defeated army in history. If they have something left to throw at us, they should use it before the inevitability of a Labour win sets in for more people than just my reverse-Hodges self.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
Doesn't that reinforce my 'p.s.'? Essentially, once the velocity returns to something like normal, the QE must be withdrawn, else prices shoot up (assuming T is constant)?
We had a 'tax refund' under Darling. VAT reduction which just brought spending forward to prop up Labour. Giving money away like that is a political not economic decision, which we should realises since Dair likes the idea. Darling also brought govt spending forward leaving a vacuum behind.
Mr Herdson has written a long piece but I am afraid to me it is all meaningless and off the point. The tories/LDs have promoted the economic good news. The political bad news is in the Times where it reports on Miliband's typically Brownian (indeed Blairite) plans to politicise the civil service. Judging by plans to again reform the NHS it plans to politicise that as well.
David, by far the biggest and most serious fly in the ointment remains our very serious trade deficit which is steadily impoverishing the country. It is also indicative of a series of underlying problems. It shows that rather than suffering the supposed horrors of austerity we in fact have excess demand in our economy that is sucking in imports we cannot afford. It shows we have major problems with competitiveness in that we cannot sell enough goods and services to pay for our consumption. This is partly a consequence of our low productivity and partly a consequence of our poor educational attainment.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship has not brought our standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
If you wanted to live in a country with a trade surplus, you should have voted Yes.
There is little possibility of England returning to trade surplus, it lacks even basic resources for its population and the position is in a continued downward spiral. The same applies to Wales and Northern Ireland. The productivity rises required in any of these three countries are far beyond what you can reasonably expect.
Scotland runs a modest trade surplus with ROW which is to be applauded. But the clear majority of its much trumpeted export success lies in exports to the RUK - bought with the same voracious appetite for imports we're discussing. I cannot for the life of me understand the gloating of Scottish nationalists over Scotland's perceived economic advantages - it seems to betray a total lack of knowledge about the inter-connectedness of economies.
The next week will be critical. Both parties need to offer something fresh to retain interest and gain momentum. I suspect only one party will do that. Arguably the Tories have been keeping their powder dry. It will be interesting to see whether that is actually the case or that they are just a bit rubbish.
Personally, I think Labour have been doing very well to keep it competative against prevailing winds, but may see things move away from them soon.
Actually both parties have held back stuff for the last weeks.Today we had Ed on immigration and I imagine more from them for the next few days.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
Doesn't that reinforce my 'p.s.'? Essentially, once the velocity returns to something like normal, the QE must be withdrawn, else prices shoot up (assuming T is constant)?
And that is why QE is structured the way it is - with gilts owned by the Bank of England. As velocity of money increases, the Bank of England can (slowly) withdraw QE by only rolling over a portion of its gilt holdings.
I would estimate they'll let QE slowly wash out the system on a 10 to 15 year view. But, should inflation shoot up, then they have the option to withdraw money from the system much more effectively (and quickly) than by raising rates alone.
10-15 years from now or from the original intervention (which would make it soonish)? I would have thought that the potential issues with the Eurozone notwithstanding, now was the time to begin an unwind.
David, by far the biggest and most serious fly in the ointment remains our very serious trade deficit which is steadily impoverishing the country. It is also indicative of a series of underlying problems. It shows that rather than suffering the supposed horrors of austerity we in fact have excess demand in our economy that is sucking in imports we cannot afford. It shows we have major problems with competitiveness in that we cannot sell enough goods and services to pay for our consumption. This is partly a consequence of our low productivity and partly a consequence of our poor educational attainment.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship has not brought our standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
Reading David's thread header it occurs to me that he sees the electorate's attitude to fiscal rectitude as analogous to a yo-yo dieter: voting Tory when last summer's clothes no longer fits and then abandoning the diet. If we accept that premise then the political failure of the Tories becomes plain: they lost the debate on public spending being seen as a good thing in itself.
Personally I think you can date that failure to March 2012 and the Omnishambles budget. That's when people decided that the brave new world promised by the Tories didn't have a place for them.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
.
....
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
It's not the same at all, both in its effect so far, and also in the future. Sending £1000 to all adults represents a permanent increase in the money supply. QE is temporary and can be reversed (essentially the BoE sells the debt it holds for cash and then writes it out of its balance sheet). In some ways QE is limited in effectiveness compared with the former because a lot of it won't have made it into the frontline economy, but that probably explains why inflation hasn't taken off. QE has also served a useful purpose (depending on your viewpoint) of keeping down the cost of Govt debt, and in fact providing a source of Govt debt.
Thank you for talking an oasis of sense in a desert of rubbish.
QE, by definition, will decrease the interest rate. Simply because it adds demand to the purchase of gilts and thus its price. And, as any Economics student knows, the price of bonds and the yield [ interest paid as a proportion of the market value ] is inversely related.
Cashing in those bonds would have the opposite effect. But we don't know how much of the gilts purchase have already matured or will mature gradually. [ Analysing the BoE Balance Sheet would probably give the answer ]
Maybe that is the plan. Gradually, it will slowly go away. The government , of course, pays interest and the maturity sum to the BoE.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
Firstly, you misunderstand the purpose of QE. Economic theory dictates that MV = PT. That is, the price level is a function of the amount of money in circulation multiplied by the velocity of money. During the Global Financial Crisis, the savings rate spiked, causing a consequent collapse in the velocity of money. Policy makers were very concerned that this would lead to a deflationary spiral - where negative interest rates caused a further increase in the savings rates, which caused even lower prices. The government cannot control the velocity of money, but QE allowed it to expand the amount of money in circulation so that MV continued to rise, albeit at a modest rate.
Secondly, your suggestion that the government just print money and give it to "the people" is fraught with moral hazard. It was of course known as Notgeld or Emergency Money in Germany in the 1920s, but you can go back much further to John Law in France in the 1700s if you like. It ended badly, for all concerned.
Doesn't that reinforce my 'p.s.'? Essentially, once the velocity returns to something like normal, the QE must be withdrawn, else prices shoot up (assuming T is constant)?
And that is why QE is structured the way it is - with gilts owned by the Bank of England. As velocity of money increases, the Bank of England can (slowly) withdraw QE by only rolling over a portion of its gilt holdings.
I would estimate they'll let QE slowly wash out the system on a 10 to 15 year view. But, should inflation shoot up, then they have the option to withdraw money from the system much more effectively (and quickly) than by raising rates alone.
10-15 years from now or from the original intervention (which would make it soonish)? I would have thought that the potential issues with the Eurozone notwithstanding, now was the time to begin an unwind.
No, I mean that the government unwinds 5-10% of its holding every year for the next 10 to 15 years. So, we'd slowly return the market to normality.
By the way, did we get that trailed midnight delight of one party naming someone who'd have a specific job in government if they won?
Some dear related to the Blair Gov't being bought in by Dave to reform pensions.
Ludicrously overhyped.
The woman appears to have a background with Saga and as a "pensioners campaigner".
The reason I suspect most people have never heard of her is that she will be a regular in the type of printed magazine Saga customers read and has little online presence. As such she demonstrates what a danger any more Conservative government would be,
She will appeal strongly to pensioners who want yet more out of others. The most destructive generation in history will get to leverage even more from the first generation every to be poorer than their parents.
This should be very, very scary for anyone under 50.
@BBCr4today: ‘The vast majority of votes affecting health & education [in Eng], the SNP would vote on’ - Alex Salmond #r4today http://t.co/DYfh032kv9
Not if EV4EL is enacted.
Oh goody - we'll get to hear a lot of self righteousness about 'creating two classes of MP' even though we already do, for gods knows how long.
Maybe the election fatigue is beginning to kick in, but I'm starting to get increasingly depressed about how bitter the next parliament will probably be. So many things coming to a head which don't seem like they can be put off any more, but which don't have pleasant solutions (or not solutions that I would like at least).
Mr. Herdson, it's interesting that the Conservative manifesto included a specific mention of income tax as an English-only matter. That could become quite the dividing line.
Mr. Pulpstar, cheers.
Vacuous, stupid and pointless as a move, the appointment's chief merit appears to be that nobody beyond anoraks has actually noticed.
QE sounds so much better than Financial Services Bailout.
QE could be implemented just as easily via the style of George Bush' "Tax Refund".
Nothing requires printed money to go to the 1% other than government policy.
.
....
The government didn't "give" money to banks. It bought gilts.
You mean the government swapped once notional store of value with another notional store of value.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
It's not the same at all, both in its effect so far, and also in the future. Sending £1000 to all adults represents a permanent increase in the money supply. QE is temporary and can be reversed (essentially the BoE sells the debt it holds for cash and then writes it out of its balance sheet). In some ways QE is limited in effectiveness compared with the former because a lot of it won't have made it into the frontline economy, but that probably explains why inflation hasn't taken off. QE has also served a useful purpose (depending on your viewpoint) of keeping down the cost of Govt debt, and in fact providing a source of Govt debt.
Thank you for talking an oasis of sense in a desert of rubbish.
QE, by definition, will decrease the interest rate. Simply because it adds demand to the purchase of gilts and thus its price. And, as any Economics student knows, the price of bonds and the yield [ interest paid as a proportion of the market value ] is inversely related.
Cashing in those bonds would have the opposite effect. But we don't know how much of the gilts purchase have already matured or will mature gradually.
Maybe that is the plan. Gradually, it will slowly go away. The government , of course, pays interest and the maturity sum to the BoE.
The BoE currently "hands back" to the government the profit it makes on interest on government bonds. This is (in effect) actual money printing of the kind advocated by Dair.
By the way, did we get that trailed midnight delight of one party naming someone who'd have a specific job in government if they won?
Some dear related to the Blair Gov't being bought in by Dave to reform pensions.
Ludicrously overhyped.
She will appeal strongly to pensioners who want yet more out of others. The most destructive generation in history will get to leverage even more from the first generation every to be poorer than their parents.
I thought it interesting the Green manifesto had a paragraph about the baby boomer generation being attacked (They've had it easy, it's said' etc etc p.29), then sort of rebutted it without actually saying why those attacks were wrong in any way, just saying instead essentially that not all older people are doing ok.
@BBCr4today: ‘The vast majority of votes affecting health & education [in Eng], the SNP would vote on’ - Alex Salmond #r4today http://t.co/DYfh032kv9
Not if EV4EL is enacted.
But isn't the point of the discussion is that the Tories will not be able to muster a majority even with their allies. If they could, everything else is academic.
The Tories would give the SNP as much power as they want. The quid pro quo will be sharply lower number of MPs from Scotland.
Practically, as I see it, Scotland is already a separate country. We are only pretending otherwise.
@DavidL - "This is partly a consequence of our low productivity and partly a consequence of our poor educational attainment."
It is also a result of an anaemic British management class that prioritises short term returns over long term investment, fails to invest in R&D and is incapable of producing stuff others want to buy.
In terms of education, export-wise we do far, far worse than our major competitors in Europe and North America - almost all of whom have similar or worse levels of general educational attainment than us.
Salmond has to be careful I think, if there is too much bad blood between the politicians elected by Scotland and the UK Gov't, the Scots might try and push for i...
@rcs1000 Why didn't you just say "the market was broken, and needed a bail out"? It would have saved a lot of typing.
?
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
No, I wasn't talking about the process AT ALL. The process is irrelevant (especially when your analysing it used Closed System theory). But that's irrelevant. The process is irrelevant.
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
If you changed the currency so that everybody now had £10 for every £1 they currently had, would anyone be richer?
If price of goods did not change , then yes. Fat chance though.
Comments
Why didn't you just say "the market was broken, and needed a bail out"?
It would have saved a lot of typing.
Point remains. Sending £1000 cheque to all adults is identical** to QE as implemented.
**Arguably sending the cheque is better as much more of the money stays in the economy and gets spent sooner making better use of the multiplier.
Dair clearly does not understand QE. He does not understand its method of action nor its intended effect.
If he said, "QE, by reducing the cost of money, has pushed up the value of assets, benefiting the rich disproportionately", then he would be absolutely right.
Instead he's gone off on some tangent about thinking QE involved "giving" money to banks, which is absurd and ridiculous.
His point is that people were losing faith in the markets, and a miracle was needed to boost it.
1. No detail on Ashcroft (piece probably made before it)
2. Was an advert for tactical voting focusing on Lib Dems in Gordon.
3. The Summary went (paraphrasing) "like everything else in this extraordinary election no-one knows how the Scottish Election will turn out but people are making up their minds" cut to two Talking Heads clearly giving an opinion on the Debate and both picking a Miliband win.
It was risible.
I would estimate they'll let QE slowly wash out the system on a 10 to 15 year view. But, should inflation shoot up, then they have the option to withdraw money from the system much more effectively (and quickly) than by raising rates alone.
Yes, but if you package it carefully, no one notices.
It is needed to stop deflation, but sounds more innocuous than the alternative.
The Bank of England may have bought a gilt off a bank, but it received in return, a gilt. It was a purchase.
To be equivalent, the government would have sent everyone cheques to everyone, and would have received in return, a bunch of flat screen TVs.
The only value of these models that I can see is to make the distinction between endogenous and exogenous variables. In a rough-and-ready way, of course. Never assume that what's expressed in an equation is therefore exact.
Bet thats seen some action...
QE is an attempt to increase the money supply. So is sending a cheque to every citizen. The latter is fairer and better.
So, QE is market intervention for those in greatest need?
Pumping money into to an endemically corrupt cartel is hardly good value for the nation.
@BBCr4today: ‘The vast majority of votes affecting health & education [in Eng], the SNP would vote on’ - Alex Salmond #r4today http://t.co/DYfh032kv9
Leicester have staged a Lazarus like revival over the last couple of games and will play an attacking formation. The team is in good spirits with few injuries and several players hitting their form.
Nonetheless we have won only six league games all season and away at Swansea we lost 2 nil in what was widely regarded as the poorest team performance of the season. Our home form is poor.
The bookies odds are favouring a Leicester win. I believe that the foxes are going to have to attack but will be unable to break through the tight Swansea midfield. There will be goals but mostly for Swansea. This is going to be a reality check on the absurd optimism of my fellow fans.
If you give money to everyone, it will not increase the value of assets.
Without asset inflation, people might notice that the economy is "fecked".
The "Fed" printed "money" then allowed the banks to "front run" the purchase of the gilts.
RCS reckons that this makes economic sense, and it may well do.
But it is smoke and mirrors economics that hides an underlying problem.
None of our politicians are talking about this because it is unremitting bad news. It means cutting the deficit and hence excess demand is more urgent than they want to admit. It means that all this supposed hardship has not brought our standard of living in line with our earnings. And it means sooner rather than later there will be a price to pay for all this government largesse that we enjoy so much.
10 minutes 10 seconds
Who initially gets to purchase the gilts?
The govt buying its bonds back, coupled with lower inflation, should help the economy through businesses borrowing to invest and creating local jobs, not jobs in China.
A Bank of England report estimated that the £200bn worth of bonds it bought between March and November 2009 helped to increase the UK's annual economic output by between 1.5% and 2%. That meant the effects of the programme had been "economically significant".
Increased productivity, and reduced imports you mean?
http://www.theguardian.com/politics/2015/apr/17/tories-increasingly-panic-stricken-says-top-ed-miliband-adviser
Gasp!
There is little possibility of England returning to trade surplus, it lacks even basic resources for its population and the position is in a continued downward spiral. The same applies to Wales and Northern Ireland. The productivity rises required in any of these three countries are far beyond what you can reasonably expect.
The breaking news is that WIND is reporting to the JNN the contents of the latest ARSE with added APLOMB 2015 General Election and "JackW Dozen" Projections. (Changes From 14th April Projection) :
Con 302 (-3) .. Lab 252 (+3) .. LibDem 28 (-2) .. SNP 40 (+2) .. PC 2 .. NI 18 .. UKIP 2 .. Respect 1 .. Green 1 .. Ind 0 .. Speaker 1
Conservatives 24 seats short of a majority
Turnout Projection .. 67%
......................................................................................
"JackW Dozen" - 13 seats that will shape the General Election result :
Bury North - Con Hold
Pudsey - Likely Con Hold
Broxtowe - TCTC
Warwickshire North - TCTC
Cambridge - LibDem Hold
Ipswich - Con Hold
Watford - TCTC
Croydon Central - Con Hold
Enfield North - Likely Lab Gain
Cornwall North - TCTC
Great Yarmouth - Con Hold
Vale of Glamorgan - Con Hold
Ochil and South Perthshire - SNP Gain
Changes From 14 Apr - No Change - First Showing Of "No Change" In Successive Projections
TCTC - Too Close To Call - Less than 500 votes
Likely Hold/Gain - 500 - 2500 votes
Gain/Hold - Over 2500
.......................................................................................
ARSE is sponsored by Auchentennach Fine Pies (Est 1745)
WIND - Whimsical Independent News Division
JNN - Jacobite News Network
ARSE - Anonymous Random Selection of Electors
APLOMB - Auchentennach Pies Leading Outsales Mainland Britain
The Lib Dems
http://newstonoone.blogspot.co.uk/2015/04/the-lib-dem-battleground-in-april-2015.html
The Conservatives
http://newstonoone.blogspot.co.uk/2015/04/the-conservative-battleground-in-april.html
Labour
http://newstonoone.blogspot.co.uk/2015/04/the-labour-battleground-in-april-2015.html
Although on this occasion I take issue with him saying the Tories lost energy and momentum. The problem was they never really gained momentum; they had edged up at the start of the year, but have been looking for a surge which has not and apparently will not materialise. They also have not really been panicking, which again has been one of their problems, as they should have a long time ago.
The next week will be critical. Both parties need to offer something fresh to retain interest and gain momentum. I suspect only one party will do that. Arguably the Tories have been keeping their powder dry. It will be interesting to see whether that is actually the case or that they are just a bit rubbish.
Personally, I think Labour have been doing very well to keep it competative against prevailing winds, but may see things move away from them soon.
Elections are about bullshit, not reality. Reality is far too scary.
Darling also brought govt spending forward leaving a vacuum behind.
Mr Herdson has written a long piece but I am afraid to me it is all meaningless and off the point. The tories/LDs have promoted the economic good news.
The political bad news is in the Times where it reports on Miliband's typically Brownian (indeed Blairite) plans to politicise the civil service.
Judging by plans to again reform the NHS it plans to politicise that as well.
Ludicrously overhyped.
It's better not to announce anything than announce something disappointing. Which party was it?
F1: oddly, I've got a few tips in mind for qualifying. I may check the market early and see if anything's at stupidly long odds.
Well played, Tories. Well played.
Personally I think you can date that failure to March 2012 and the Omnishambles budget. That's when people decided that the brave new world promised by the Tories didn't have a place for them.
Cashing in those bonds would have the opposite effect. But we don't know how much of the gilts purchase have already matured or will mature gradually. [ Analysing the BoE Balance Sheet would probably give the answer ]
Maybe that is the plan. Gradually, it will slowly go away. The government , of course, pays interest and the maturity sum to the BoE.
David Axelrod's occasional interventions in the Guardian have really made that £300,000 worth it.
Dan Hodges @DPJHodges
The Guardian interview with Axelrod is embarrassing. He's just dialling it in. Literally in this case.
The reason I suspect most people have never heard of her is that she will be a regular in the type of printed magazine Saga customers read and has little online presence. As such she demonstrates what a danger any more Conservative government would be,
She will appeal strongly to pensioners who want yet more out of others. The most destructive generation in history will get to leverage even more from the first generation every to be poorer than their parents.
This should be very, very scary for anyone under 50.
Investment tip - buy Saga.
Maybe the election fatigue is beginning to kick in, but I'm starting to get increasingly depressed about how bitter the next parliament will probably be. So many things coming to a head which don't seem like they can be put off any more, but which don't have pleasant solutions (or not solutions that I would like at least).
Mr. Pulpstar, cheers.
Vacuous, stupid and pointless as a move, the appointment's chief merit appears to be that nobody beyond anoraks has actually noticed.
Now to check that stopped clock.
And I'd pay the tax on it here
F1: glancing at the markets, only one outside bet tempts me. Race bet, though...
The Tories would give the SNP as much power as they want. The quid pro quo will be sharply lower number of MPs from Scotland.
Practically, as I see it, Scotland is already a separate country. We are only pretending otherwise.
It is also a result of an anaemic British management class that prioritises short term returns over long term investment, fails to invest in R&D and is incapable of producing stuff others want to buy.
In terms of education, export-wise we do far, far worse than our major competitors in Europe and North America - almost all of whom have similar or worse levels of general educational attainment than us.
Oh wait