[keydude]

There are also responsible, anti-gambling bankers.

[MikeTV]

Originally Posted by johntheexpat

transferring wealth from the rich to the rest. Yes, definitley at tax.

When the government is printing money to pay bankers, it is transferring money from "the rest" of us, to the rich. You had it the wrong way around.

[gibbsy]

Originally Posted by keydude

There are also responsible, anti-gambling bankers.

The Co-operative Bank for one and many mutual socities. But I fear they are in the minority with the number of banks around the world that have their begging bowls out. If it were not so why are the economies of the world in such a mess.

[MikeTV]

Originally Posted by Squiffy

And where would we be without doctors, teachers, accountants, solicitors and even bankers.

I'm picturing glorious sunshine and meadows, children playing happily, people dancing and holding hands....

[kav]

Originally Posted by gibbsy

Epitaph for the eighties? "there

is no such thing as society"



Prime minister Margaret Thatcher, talking to

Women's Own magazine, October 31 1987

Boom boom

I'm sure you know well that that was taken completely out of context.

[karkus30]

Originally Posted by MikeTV

I'm picturing glorious sunshine and meadows, children playing happily, people dancing and holding hands....

:-)

[johntheexpat]

Originally Posted by MikeTV

When the government is printing money to pay bankers, it is transferring money from "the rest" of us, to the rich. You had it the wrong way around.

Very true.
The trouble with this policy is that it is taking from those who have anything, no matter how small. £100 quid in a savings account, crap rate of interest, below inflation, loss of value in real terms, that wealth is transferred elsewhere.
Small pension pot? Stays small, any growth magically disappears to somewhere else.

Oh yes, QE is the most insidious & stealthy of all stealth taxes.

The only people who don't suffer its pervasive tentacles are those with absolutely nothing. And they will suffer because they will continue to have nothing.

[Squiffy]

Originally Posted by johntheexpat

The trouble with this policy is that it is taking from those who have anything

Who will be impacted the most by it? Those who have small savings or a lot?

Why do you think this is just transferring money to the rich, when the rich have the most to lose from the policy?

[MikeTV]

I predict the pound and the euro will be at parity within the next 12 months - despite (or because of) the impending eurozone catastrophe, and due mainly to economic mismanagement by this government. I don't even think it's a bold prediction. We are more economically dependent on the financial sector than any other country by a significant order of magnitude, and there are serious problems ahead.

[pandemic]

^^^ I can't see the pound weakening against the euro at the moment, ever since the Greek crisis has unfolded the pound has strengthened against the euro. If anything, it will be the euro at parity with the US dollar.

[dovercat]

Originally Posted by keydude

income tax - tax on your personal income
VAT - tax on purchases
QE- tax on existing money?

QE only devalues existing money if it results in inflation.

In the current economic situation of mass debt and people repaying that debt and banks lending less, money supply debt is going out of the real economy, so increasing money supply cash may not be very inflationary. Since the UK government appears to view low inflation as a requirement for economic recovery due to encouraging borrowing and investment, I doubt high inflation is anticipated to be a problem.

Inflation devalues money so it devalues debt and savings. So debtors benefit and savers suffer. While those that hold real world assets rather than fiat money should not be affected.
I think most government gilts maybe fixed interest not inflation linked so it might also devalue government debt.

It also devalues wages making people cheaper to employ, and welfare benefits cheaper.
It may encourage people to spend their money today rather than tomorrow as the buying power of money is going down, so increasing consumer spending, decreases saving.
It may help devalue the currency, exchange rate, making our exports cheaper, and imports more expensive, helping UK producers and the balance of trade.

But inflation must be predictable and not excessive otherwise it deters investment and economic growth.

[keydude]

Originally Posted by dovercat

QE only devalues existing money if it results in inflation.

Yes but isn't one of the factor of inflation is QE? Right now I can see inflation, so the pound been taxed?

Originally Posted by dovercat

I think most government gilts maybe fixed interest not inflation linked so it might also devalue government debt.

Is this good in the longer term, who is going to lend at the same rate? Isn't this a bit like mini default?

Originally Posted by dovercat

It also devalues wages making people cheaper to employ, and welfare benefits cheaper.

Part of the stealth tax?

Originally Posted by dovercat

It may encourage people to spend their money today rather than tomorrow as the buying power of money is going down, so increasing consumer spending, decreases saving.

Spend our way out of trouble?

Originally Posted by dovercat

It may help devalue the currency, exchange rate, making our exports cheaper, and imports more expensive, helping UK producers and the balance of trade.

If it comes to devalue or property crash, I can understand. QE for the banks to cover the 'black hole', as if the public will then get lend the money? It is for the banks and banks only. Lend out or not, great news for them.

Originally Posted by dovercat

But inflation must be predictable and not excessive otherwise it deters investment and economic growth.

Let see the 'government' own figures at the end.

No I don't have an answer, we already been robbed by bankers. Can't do much about spilled milk.........

I only blame the person reponsible for holding the milk at the time.

[sidicks]

Originally Posted by keydude

QE for the banks to cover the 'black hole', as if the public will then get lend the money? It is for the banks and banks only. Lend out or not, great news for them.

Please explain how replacing government bonds with an equivalent amount of cash 'covers black holes' for banks....?

[keydude]

As you can tell, I am not an economist.
All I can say is my pound is not worth as much and my preception (which can be wrong) the cause is QE.

So I (and I presume everyone has pounds and earn pounds) lost out on QE. Where has this money gone? My short answer is BoE/government newly available funding, it has a cost.

I would guess the biggest benefactor are banks that recieve these newly available funds cheaply (not physically available to them at that rate before).

I would guess banks were in big trouble as reflected by shares prices. Having funds available and cheaper ultimately made them money these few years. With favourable trading conditions made by the government, the banks in bad shape start to square up (governemnt owned) and the banks which were in better shape (not governement owned) started to make big money. This 'black hole' or void, I presume was filled by QE.

I am only guessing, because in this real world with QE, I am loosing out, and I can spot the winners. This is simple observation.

[sidicks]

Originally Posted by keydude

As you can tell, I am not an economist.
All I can say is my pound is not worth as much and my preception (which can be wrong) the cause is QE.

So I (and I presume everyone has pounds and earn pounds) lost out on QE. Where has this money gone? My short answer is BoE/government newly available funding, it has a cost.

I would guess the biggest benefactor are banks that recieve these newly available funds cheaply (not physically available to them at that rate before).

I would guess banks were in big trouble as reflected by shares prices. Having funds available and cheaper ultimately made them money these few years. With favourable trading conditions made by the government, the banks in bad shape start to square up (governemnt owned) and the banks which were in better shape (not governement owned) started to make big money. This 'black hole' or void, I presume was filled by QE.

I am only guessing, because in this real world with QE, I am loosing out, and I can spot the winners. This is simple observation.

I explained after your previous post that you were confusing the impact / intention of QE with that of the newly proposed loans to banks for onward transmission to businesses.

Now you are simply repeating your previous statements that I have already pointed out are incorrect.

[keydude]

As I said, I am no economist.
Isn't both QE and the current loan both come from BoE/government?
Does it really matter in that principle when it get dish out?

[MikeTV]

Originally Posted by sidicks

Please explain how replacing government bonds with an equivalent amount of cash 'covers black holes' for banks....?

Well, if you're mortgaged up to the hilt, and have maxed out your credit cards, and then someone comes along and gives you a brown paper bag full of taxpayer's cash - enough to pay off your mortgage - I'd call that "covering your black hole".

[Squiffy]

Originally Posted by MikeTV

Well, if you're mortgaged up to the hilt, and have maxed out your credit cards, and then someone comes along and gives you a brown paper bag full of taxpayer's cash - enough to pay off your mortgage - I'd call that "covering your black hole".

But haven't the QE funds been used to buy government bonds/gilts.

Rather than a mortgage as you put it, isn't the money being used to buy an asset? And an asset which was about as safe as you can get too?

Not sure how this is filling any black hole as the banks balance sheet remains unchanged other than bonds now replaced with equivalent cash.

[sidicks]

Originally Posted by MikeTV

Well, if you're mortgaged up to the hilt, and have maxed out your credit cards, and then someone comes along and gives you a brown paper bag full of taxpayer's cash - enough to pay off your mortgage - I'd call that "covering your black hole".

That is pretty much the situation for the government not the banks.

You obviously don't appreciate how QE works.

[MikeTV]

Originally Posted by Squiffy

But haven't the QE funds been used to buy government bonds/gilts.

Rather than a mortgage as you put it, isn't the money being used to buy an asset? And an asset which was about as safe as you can get too?

Not sure how this is filling any black hole as the banks balance sheet remains unchanged other than bonds now replaced with equivalent cash.

You are right in a technical sense that the bonds are assets of the bank. But what QE is doing is turning those assets into hard cash to help the bank's cashflow and deleverage. Banks are net borrowers. Because it is raw cash, they can use this cash in way they want - to repay their commercial debt, or pay themselves huge bonuses, buy new post-it notes, whatever. And you can argue, they are getting the cash before the currency devaluation (through the increase in the money supply). And not only that, the currency devaluation is great for the banks too - because they are net borrowers. So it's a win, win, win situation for the banks. And a lose, lose, lose for the taxpayer.

[MikeTV]

Originally Posted by sidicks

That is pretty much the situation for the government not the banks.

You obviously don't appreciate how QE works.

I think I do - the taxpayer is essentially bailing out the banks again. All of the banks. Just indirectly.

[sidicks]

Originally Posted by MikeTV

I think I do - the taxpayer is essentially bailing out the banks again. All of the banks. Just indirectly.

[MikeTV]

Originally Posted by sidicks

Yes - my reaction to QE was to facepalm too.

[keydude]

Action: Policy on QE and inflation.

Result: I am getting poorer and bankers and banks are getting richer.

Where is the robbery and where has the money gone?

You don't have to look too far back to know you are being shafted.

[dovercat]

Originally Posted by keydude

Yes but isn't one of the factor of inflation is QE? Right now I can see inflation, so the pound been taxed?

When have you not seen inflation?
Inflation is a natural byproduct in fiat money economies which continously slowly increasing money supply to stimulate more demand and supply in the economy, it is a byproduct of trying to grow the size of the economy.
Zero inflation and deflation would not be desirable.

[keydude]

I just feel the current level of inflation is much worst than I ever experienced, regardless of the official government figures. Am I alone or am I the only 'nutter'?

[dovercat]

Originally Posted by keydude

I just feel the current level of inflation is much worst than I ever experienced

Which raises the question how old are you?
In the 1970's year on year RPI inflation hit 26.9%, in the early 1980s 21.9%, in the early 1990s 10.9%.

Year on year RPI inflation in April 2012 was 3.5%.

[karkus30]

Originally Posted by dovercat

Which raises the question how old are you?
In the 1970's year on year RPI inflation hit 26.9%, in the early 1980s 21.9%, in the early 1990s 10.9%.

Year on year RPI inflation in April 2012 was 3.5%.

Very much depends on how you measure inflation. There are statistics, damned statistics and lies. Things get measured for the benefit of the those doing the measuring. I reckon 10" but my wife seems to disagree.

[leedswillprevai]

Come on, you know those inflation figures are meaningless, they don't take into account the cost of living and of course we see how the amount in any given product is being reduced (1.5 litre bottle) (shrinking chocolate bars) etc and yet the price is still creeping up.
I just opened up some ham and have been reminded that I paid x amount for 4 slices, the same price, now 3 slices, that's a 25% increase in the price.
The cost of food, utilities has risen into double digits

[dovercat]

Originally Posted by karkus30

Very much depends on how you measure inflation. There are statistics, damned statistics and lies. Things get measured for the benefit of the those doing the measuring. I reckon 10" but my wife seems to disagree.

The UK ONS is independent of political government. It is a arbiter of truth not propaganda.