France and Greece Election results!

It seems to me that QE is a short term fix and artificially keeps interest rates on gilts low, But it has to end at some point and then the market rate for that interest will increase as the artificial stimulus is no longer there.

tillyminto = a scouse woman with ideas above her station. i am a southerner but my family if from a shit area outside liverpool...well its the best place on earth but shit as well....

I am not an expert on it, MoreBeta would be the best person to explain this. But the way I understand it is that the govt has been able to sell its debt at a low interest rate because it is being bought up by Bank of England QE money (which has been created out of 'thin air'). Now that QE is apparently ending, the debt will need to be bought by other customers and they will demand a higher rate of interest than the rate offered for QE cash.

As I understand it, QE cash can become inflationary as it is created out of 'thin air' and is increasing the money supply. So there comes a point when it has to stop.

Oh good, I love the name tillyminto and it rings a bell, is it something to do with foxes? I just have this very distant memory and I can't think if it's from a book from my childhood or something countryside. (sorry now I'm off topic)

If the Greek state workers, teachers, social workers etc are now on half pay where are the greeks going to keep making savings? If you don't invest in infrastructure like roads you are also scuppered because businesses suffer.

claig, i dont get why you think there is anything wrong with buying back a gilt?

i would be very wary of a gold website.

Today's news was that the bank has already injected 350 billion of QE into the system and apparently will not be doing any more, as far as I understand it. On the news it showed that the interest rate for govt borrowing went up on that news, because presumably new customers will need to be found for govt debt.

Here is a good explanation of QE and the way it injects new money into the system so that banks etc. receive money for gilts and use that money to buy other financial assets etc.

goldnews.bullionvault.com/bank_england_021320125

the sticking to the politics that is!

What the QE thingy? sorry haven't really caught up with the whole thread.

Is greece going back to the polls?

you could have mentioned that sooner mini!

Minto, you also had a wobbly moment up thread, I know life gets in the way and sometimes we can't leave our rl experiences at the door but it would be better if we could stick to the politics, wouldn't it?

oh dearie me.... like i said, i personally think stepping away from the victim thing would be beneficial.

QE www.bbc.co.uk/news/business-16974497

When QE is used to buy banks' bond, the bank is borrowing money and money is being lent to it on the premise that the bank will repay the loan with interest. The bank is effectively writing an IOU.

Yes America is in hock to the Chinese. The Chinese would rather lend money to the west than start to create its own internal market. It's strength is low wages and land prices etc, if it started to stimulate internal demand for goods it would need to pay higher wages, that would make china less competitive globally.

Although at the start of the cold war, the Americans were desperate to get into china and exploit it. They were meddling in chinese internal affairs because they wanted to exploit cheap labour and push capitalism on them.

Lady - i think you would benefit from stepping away from your victim mentality

Claig - i still dont get why you think QE is giving money to banks. its buying quality assets from them. i might be missing something. please can you step me through your thinking.

It's called globalisation and we all can benefit or choose to sit in the dark and bow out from it.

And CHINA owns the USA with most of the worlds manufacturing going on there. Designed by a Brit in Cupertino using a UK designed and manufactured microprocessor and built in the PRC.

Good to see American dominance over world trade isn't trying to starve the communists out North Korea is communist.

What does the USA have to do with North Korean economy. you forget the North Koreans stopped access to the North Korean economic zones wehre the South Koreans had set up factories. Im not sure how USA policy has anything to do with that except the USA does send an awful lot of food aid to the North of Korea.

NovackNGood, is that really necessary?

"North Korea has a GDP to Debt ratio of less than 1% yet they are not a booming economy not will they be until reunification" why don't they have a booming economy. Is that because good old uncle sam still believes in the bogey man?

Who is that Lady?

To you, anything you don't understand is a conspiracy. You probably think that the sun rising in the east and setting in the west is a conspiracy.