Joke of the week: "QE won't cause inflation in UK, says BoE's Posen"

[AtW]

Source: Debt crisis: live - Telegraph

In relates new here is what good lady does in Spain:



"Spain's new conservative government says it is placing a cap of €105,000 on annual salaries for state company directors as part of its austerity push to reduce the country's swollen deficit

Deputy Prime Minister Soraya Saenz de Santamaria (pictured above) said the government will also restructure public sector companies down from the current 4,000, and limit the number of directors such entities can have on their boards. She said the measures would trim up to 35pc from the wage bill. "

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Well done Spain!

[scooterscot]

€105,000 on annual salaries for state company directors[/b] as part of its austerity push to reduce the country's swollen deficit


Well done Spain!

The equivalent of a £1,000,000 by 2018.

[TimberWolf]

Well done Spain!

whs.

[hyperD]

...Soraya Saenz de Santamaria...

Mmmmmm.... ding dong!

[BrilloPad]

In theory they can unwind the QE. In practice I think it will be impossible.

[AtW]

In theory they can unwind the QE. In practice I think it will be impossible.

In practice they'll have to print more money in the future when Govt gilts sold now will be mature and will have to be paid for. You can almost see why they are so scared of deflation and strong GBP.

[sasguru]

In practice they'll have to print more money in the future when Govt gilts sold now will be mature and will have to be paid for. You can almost see why they are so scared of deflation and strong GBP.

You really haven't a clue, do you?

[AtW]

You really haven't a clue, do you?

1. BoE prints money to buy UK Govt gilts which helps keep interest rates on those guilts low (by extension it means inflation will destroy value of this asset acquired by BoE).

2. In X years time when those UK Govt gilts are due to be paid back by Govt somebody there will need to have a lot of dosh to buy them back - there are only 3 ways the Govt will be able to do that:
a) inflation will destroy value of pound and Govt would easily pay back 20-30 years old debt
b) new buyers AKA suckers will pay cash for newly issued bonds to help maintain this scheme which is nothing but illegal pyramid
c) BoE prints more money if suckets in b) are not available

Sir Merv is sure working overtime to make sure it's a) but failing that his successor will get a knighthood to do c).

I've seen this tulip first hand in Russia - never thought I'd see it again in UK.

HTH