Bank of England quantitative easing 'boosted GDP'

[AtW]

No the guy is right the US, UK, Germany and a few other countries have a few years to get their debt down so they don't issue any new debt.

You mean printing money to give to bond holders instead of rolling debt over whilst paying token 2% interest?

[BlasterBates]

No the guy is right the US, UK, Germany and a few other countries have a few years to get their debt down so they don't issue any new debt. As long as they do this no problemo. In fact Germany is planning to do this anyway, in 2020 they will issue no new debt. As long as they stick to this shouldn't be a problem. This is because demand for bonds won't be satisfied so should keep the bubble in check.

If they keep increasing their debt, then yes there will be a "Greece moment" sometime down the line.

[AtW]

Well I suppose it would have looked bad if they'd just come out and said "we don't have a f**king clue what the effects of QE have been, if any".

If they said they have no clue then I reckon it would have been a lot more believeable than what they said instead.

[Freamon]

The Bank of England's purchase of £200bn of assets has been "economically significant", boosting GDP by as much as 2%, according to the Bank's Quarterly Bulletin.

The action, known as quantitative easing, could also have raised inflation by 1.5%, the Bank said.

Well I suppose it would have looked bad if they'd just come out and said "we don't have a f**king clue what the effects of QE have been, if any".

[centurian]

The bond markets see US, UK and German debt as the safest options.

"Marginally the best of an extremely bad bunch of options".

Buying UK bonds is like cutting an arm off - but that's preferable to jumping head first into a tree shredder running at full throttle, which is what some Euro denominated bonds are like now....

[sasguru]

The bond markets see US, UK and German debt as the safest options.
UK debt as a proportion of GDP has been higher than the current value many times previously.

So just relax

[Doggy Styles]

To get out of debt the UK needs 12.5% growth for 30 years. Humm...

More significantly, what does it need to eliminate the deficit, assuming public spending is kept at current levels in real terms?

[AtW]

To get out of debt the UK needs 12.5% growth for 30 years. Humm...

Growth 2.5%, and 10% inflation.

HTH

[Paddy]

To get out of debt the UK needs 12.5% growth for 30 years. Humm...

[shaunbhoy]

Waiter, another BTL here!

You wish!!

[AtW]

Instead of letting overextended house owners go bust they've pumped the system with money and might the whole state go bust.

What's not to like?

Waiter, another BTL here!

[PAH]

I think the following article is very interesting and explains where all the credit has come from (i.e. who the UK and 'the west' owe money to) and what could happen in the near future.

This is going to hurt | The Spectator

Maybe it's just scaremongering and the author has a vested interest in ramping gold, but it seems to make sense.

[filthy1980]

what i don't get is, if we print our own money who do we owe our debt to? and why are we being charged interest?

[AtW]

The Bank of England's purchase of £200bn of assets has been "economically significant", boosting GDP by as much as 2%, according to the Bank's Quarterly Bulletin.

The action, known as quantitative easing, could also have raised inflation by 1.5%, the Bank said.

The Bank bought the assets, mainly government bonds, between March 2009 and February 2010.

It used newly created money to fund the deals to try to boost the economy.

However, the Bank warned that there was considerable uncertainty around these estimates and that the precise impact of asset purchases or sales was likely to vary.

News of the figures may fuel speculation that the Bank is to start a new round of quantitative easing to boost the UK's slow economic growth, which was just 0.2% in the second quarter of the year.

This month, the Monetary Policy Committee (MPC) voted for no change in bond purchases and left interest rates at a record low of 0.5% for the 30th month in a row while inflation stayed at more than double its 2% target figure.

MPC member Adam Posen has repeatedly called for a return to quantitative easing since the beginning of 2011.

In a speech last week, he said: "If we do not undertake the stimulative policy that the outlook calls for, then our economies and our people will suffer avoidable and potentially lasting damage," he said.

On Monday, data from Markit Economics suggested there had been a slight improvement in household finances in September.

Its monthly index of household finances edged up to 35.1 in September from a record low of 33.2 in August.

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Source: BBC News - Bank of England quantitative easing 'boosted GDP'

Well, GDP growth is certainly much more reliable calculation than this magical inflation figure they quote - all in all it seems to me obvious that money printing has resulted in as fake increase in GDP as previous attempts to "grow" using debt.