Has Corbyn's 'people QE' policy flip flopped as well?

[Isitmebut]

When trying to get elected by the Labour movement as leader, Corbyn said that he would use some (uncollateralized?) QE 'free money' as a key policy to build UK investment, infrastructure and therefore growth.

The past emergency QE by the BoE meant that they bought UK Government Gilts from the open market for their own account that prior did not exist, pumping money/liquidity into the UK Money Supply when the lack of UK bank lending was restricting money supply growth.

This will be reversed one day when the BoE SELLS the UK Gilts they bought, and the payments to the BoE's QE account FLATTENS that account, but has to be done when that money can be withdrawn from a more flushed UK Money Supply and don't put UPWARD pressure on interest rates.

But NOW we hear that QE under Corbyn will only be used in an emergency, when the BoE might look to do another QE operation anyway.

So in the space of weeks, not months or years, it appears yet another badly thought out space cadet policy, has had to revised for some reason or another.

It seems this geezer will say absolutely anything in order to get elected.

Corbyn is pluralistic. He makes a suggestion, states his position, and in genuine socialist style listens to the general consensus maybe even proposes voting or referendum, before applying policy.

You call it U-Turn, I call it democracy.

Under corbyn a higher number of a wider range of type of person has democratic influence.

No longer limited to a small niche of Oxbridge inhetited entitled arse elites.

Corbyn is pluralistic. He makes a suggestion, states his position, and in genuine socialist style listens to the general consensus maybe even proposes voting or referendum, before applying policy.

Gets elected, changes his mind, can blame everyone else for keeping his feet on the ground. Got it.

Elections are all about trusting our representative to make an INFORMED decision on our behalf, if we thought the local village idiots could run the country we'd just use their first names, and send them to Westminster directly - and cut out the waste of space bluster (and salary) of the middle men.

I thank you, personally, for calling me a village idiot.

QE has been used to support asset prices. His suggestion is to use it to support investment but only in instances where it would not be inflationary and would not be crowding out private investment. There is more than monetary policy to macroeconomics but separating out the BoE seems to have had the effect of making people discount the effect of fiscal policy. The current government is running extremely tight fiscal policy in the face of deflationary pressure thus the inflation target persistent undershoot and the need for loose monetary policy.

More broadly every pre leadership interview with Corbyn I watched was characterised by him questioning current thinking in light of his background and raising areas for consultation. I don't recall him presenting hard and fast decisions on how to change things but more pointing out the obvious that there are different ways to organise priorities within society and different ways to achieve the same ends and he is not in agreement with the current approach.

QE has been used to support asset prices.

So there wasn't a banking liquidity crisis where few were getting loans for ANYTHING at the time - we KNOW it was targeted at 'assets' do we - what was the breakdown as the Uk Money Supply crashed to negative territory around 2009?

Whether QE or direct lending to banks by the BoE, there was collateral deposited against that cash released, if the UK did use a QE approach to build UK infrastructure - what would be the UK governments collateral and incentive to lenders to attract/secure their investment?

As if the collateral to lenders is the infrastructure built, how do they get their money back on the maturity date of the loan???

The deafening sound of clutching pearls

Pearls of wisdom - as Corbyns 'money out of thin air' can only happen if investors LEND the money, Einstein.

If private investors 'own' the assets built, how do they get a return, never mind their money back on the maturity date of their investment - this sounds more half-arsed than Labour's abuse of the PFI's.

www.telegraph.co.uk/health/healthnews/8779598/Private-Finance-Initiative-where-did-all-go-wrong.html

I've just heard on the Daily Politics that the People's QE 'money out of thin air' policy might be put on permanent hold as 'inflationary'.

I would disagree about that as unless ANYONE can tell me how it will work, it can never actually happen; 'money from hot air' if you will, which I guarantee, by definition, can NEVER cause inflation.

www.taxresearch.org.uk/Blog/2015/09/17/my-exchange-with-andrew-neil-on-the-daily-politics-show/

It all becomes clear. You have been spending too much time admiring AN's interview technique and not enough reading Econ 101

howabout ...... admittedly I have just skimmed through, but that is as clear as mud - and FYI I knew about QE way before that interview, that I did see.

Econ 101

When a UK government borrows it issue an I.O.U. in the form of a government bond.

When the BOE pumps money into the money supply via QE, it buys back government bonds, effectively 'sterilizing' the additional cash in the system -and although one can argue the BOE did not need to buy back the Gilts, this first time QE action has some (government) accounting standard.

Richard Murphy states, as if he is cast iron sure, the BoE will NOT reverse the QE, which appears to be the reason he says we can have a money printing free for all - yet he cannot KNOW that, I suspect even Mr Carney does not know that yet.

So with no issuance of any government I.O.U. and a UK government running an unaccountable printing press, with currently £1.6 trillion of National Debt mainly held by international investors national debt - and all sorts of other liabilities e.g. pensions - why would any main credit rating agency that has not got the first clue what we are £££ issuing, maintain our AAA rating with two of those three main agencies????

If we lost our excellent credit ratings, how much would the funding cost of our current national debt increase when needs to be rolled over on individual issues maturing e.g. 6 month government bills to 2-year bonds to old 10-year bonds?

If we are NOT going to go all South American junta and SHOW what we are borrowing to the credit ratings agencies, to stop them downgrading us on the 'known unknowns' we could be recklessly 'printing money' - why the fuck do we not just drop the fucking pretence that it is 'free money' and ISSUE the fucking government bonds?

With all due respect isitme, QE is a subject that Nobel prize winners debate endlessly on end to no conclusion.

To claim "I knew about QE way before that interview" and to claim that your claims outclaim Corbyns claims is to position yourself of higher intelligence than the entire editorial team at FT combined.
Are you?

squidzin ... I am not debating the EFFECTS of QE on the economy, that the screaming socialist Paul Krugger(?) believes, indeed with ANY mass injection of debt is GOOD debt, no matter what the existing country debt level is and how 'balanced' the economy is for the private sector to pay off that debt.

Moreover, I am neither debating specific QE facts with Corbyn or the entire editorial team at the FT, as if I was, I'd expect an answer to the above really rather basic questions, with no wild statements others make, that I KNOW what the BoE will do with its current QE;

• If as the link above suggests governments print money all the time by issuing bonds, and 'People's QE' (which is not like the BoE's QE) is just the same, then why not just ISSUE more listed UK government bonds rather than pretend it is 'free money' - unless trying to disguise our national debt levels?

• If we are going to try and disguise our national debt levels to those that currently hold our existing bonds/debt, and the credit rating agencies who are meant to look out for dodgy country/company practices - how long will it be before they have to downgrade our national debt credit rating as a precaution against our unknown money printing?

• Those that currently hold our £1.6 trillion of government bonds, indeed the capital markets in general, DISCOUNT bad (and good) news - so just the uncertainty of what the fuck a Corbyn government is doing with our non publicly listed debt issuance - which could severely affect our ability to annually SERVICE our then what, £2,000,000,000,000 (£2 trillion) of national debt, together with the unfunded pension liabilities as fall due and services/welfare, never mind cover bond principal amounts when mature.

Markets 101.

The core assumption that a country can go accounting rogue and print whatever money that it wants, especially with current national debt levels - and that there will be no market reaction selling/switching out of our debt into other country debt - which drives up UK yield levels/interest rates, is totes amazeballs.