Time up for QE

No one really understands it and because of this opinions are all the more divided and intransigent. Despite this incoherence the market has understood enough to know that it drives asset prices and confidence in future prices.  It is QE – quantitative easing.

Ben Bernanke - the Godfather of QE

QE is where Central Banks print themselves some money to buy bonds and other instruments from the banks, the idea is that this puts cash / liquidity into the economy increasing the money supply and making credit more freely available.  Under “normal” conditions of growth (+2-3% annually)and inflation (around 2% annually) equilibrium this would drive up aggregate demand (growth)  and inflation as the banks push this extra liquidity out into the market in the form of loans.

The Full Monty on Osborne's economic policy

In the five years that have elapsed since the global financial crisis  erupted in the summer of 2008 living standards in the UK have dropped sharply (in 2008 a single person earning £13,000 would have reached the minimum they needed to get by. if their wage had risen in line with average increases, they would now be earning £14,000 – which is roughly three thousand short of the £16,850 salary needed to cover the same basic standard of living today).  During this period we have had two governments who have been  attempting to nurse our broken economy back to health.  In  the first two years of the crisis we had the 'fag end' of a long running Labour government, who had little stomach for the fight.  The only Labour minister who came out of this period with any credit was Alistair Darling the who, despite constant interference from Gordon Brown (self styled saviour of the world), did an excellent job of first aid on a patient that was dead on its feet.  His sensible approach to encouraging consumption through sales tax reductions and the motor car recycling scheme combined with a massive blood transfusion of QE made sure that Britain survived the trauma of an imploding financial services industry and the cataclysmic effect this had on credit markets and the tax take.  The rest of the Labour government were in shock as they watched 13 years of neo-socialism unwind before their eyes. 

Broken promises

My New Year resolutions and progress (or lack of it) to date

	Resolution	Status	Note
1	To be more organised on home administration and less transfixed by work	?	Jury's out on this
2	To drink less expensive French wine	x	Blew this pretty early on - I got undone by a couple of bottles of Château Calon-Ségur
3	To complete all the odd jobs around the home that have been on my list for 12 months or more	?	I have a list I just haven't started yet
4	To be less of a contrarian and less controversial (argumentative, rude, boorish).	x	Obviously not - read post on my blog since New Year
5	To give up dancing and generally being weird in front of my children	x	First resolution to go up the Suwannee - about 2am on the 1st Jan
6	To do less gardening	a	The weather has kept me honest
7	To stop using other people toothbrushes	x	I lasted about 7 hours
8	To be less silent and a better listener	?	Hopeful and trying hard
9	To write better and more timely thank you letters	a	Did my Christmas letters by the 28th Dec
10	To spend less time on my blog and twitter - but be more interesting	x	See for yourself