Taking on the currency cranks

[littlebabyjesus]

I've just found the figures to counter this assertion, and they're pretty conclusive.

Prior to the interbank lending market seizing up in August 2007 the total amount owed between the UK banks was £639 billion.

After August 2007 this dropped almost immediately to below £200 billion, and was still at approximately this level in early 2009 prior to QE kicking in, at the point the SLS was closing, and you're claiming that the situation had already resolved itself

By the end of 2009 after QE had kicked in the rate of interbank lending had more than doubled to £424 billion, so QE had achieved what the previous loan / loan protection schemes hadn't.

You attacked my understanding of the timeline earlier. I'd contend that it's actually you who's got the timeline mixed up here.

figures

Interesting figures. They tell a story about the boom, I would think. Rates fairly stable between 1500 and 2000 up to 2002, then a relentless rise to well over 6000 between 2002 and 2007. Those do appear to have been the years of madness in all kinds of ways.

 

[love detective]

do I think QE is forever?

how do you mean?

QE is an asset purchase scheme, a scheme to purchase something being fundamentally different to a scheme to loan someone some money on a short term basis using that asset as security for the loan.

If you don't understand the difference, well I'd suggest that's your problem not mine.

As for QE being reversed... well, if it is then this will be an entirely voluntary arrangement where the BoE offer the gilts back for sale, and the banks decide to buy them back, as opposed to being obliged to buy them back as part of their original loan agreement.

you don't understand a thing about QE by the looks of things

QE can't go on for ever - it will end in two ways

1) the bank of england starts selling the gilts on the market - this along with the current need of the state to issue fresh gilts to fund the deficit would bring about a glut of gilts on the market, forcing rates up and potential fiscal crisis

2) gilts have maturity date - at which time the issuer (the state) has to repay the principal to the holder (currently the BOE). In order for the state to pay back they have to issue more gilts to fund the repayment, this along with the current need of the state to issue fresh gilts to fund the deficit would bring about a glut of gilts on the market, forcing rates up and potential fiscal crisis

That you say the reversal of QE would be a voluntary arrangement is like saying that the fact that you have to pay your mortgage back is ultimately a voluntary arrangement

 

[love detective]

also, the BoE could as easily sit on those gilts themselves, they're under no actual obligation to sell them if they don't want to.

you do realise gilts have a maturity date don't you?

 

[love detective]

Doesn't matter. At the moment, banks and others are very keen on buying govt debt - hence govt can borrow at very low rates of interest. If the BofE were to introduce a whole load more govt debt for sale, that would be effectively changing the supply/demand balance.

tbh the more I think about this, the more I think qe's primary purpose was to provide a short-term solution to keeping government debt cheap to finance for government.

Indeed, your last sentence is what i've been saying since the very start (posts 184 and 188 for example) as to what is the real unstated purpose of QE (in addition to the stated purpose of trying through fuckwitted means to stimulate the economy)

 

[love detective]

so £75 billion is a paltry amount yet this is 3/4 of the initial amount lent under the SLS scheme, and almost exactly the same amount that was lent during the extension in the scheme from the Autumn to January 2009.

£75bn is a paltry amount compared to the overall amount of QE

How come that the same paltry amount was capable of achieving all you suscribe to it when given as a loan, but when it's actually used to buy the assets directly it suddenly becomes a paltry amount?

btw you seem to have missed the fact that the LIBOR rate had started increasing dramatically again between the end of January and March 2009 between the ending of the SLS scheme, and the start of QE, prior to nose diving as soon as QE kicked in

so wtf have you spent the majority of this thread arguing if not this precise point?
.

you keep seeming to miss the point that at no point on this thread have i argued against the simple/banal truism that QE forces up the price of gilts thus driving down their yield

that you think showing graphs showing the reduction in yields/rates which correlate to QE transactions is somehow proving your point, show's that you don't even understand what the discussion you are involved in is about - which probably explains why you're doing it so badly

i've said from the very start that the impact of QE drives up gilt prices and yields down - that this happens is purely a function of a deep pocketed buyer in the market for something - the argument you and I are having (which I seem to have to remind you as you don't seem to know) - was about the reasoning and motivations of doing QE in the first place. You claim it was purely to help out the banks, I claim that it wasn't as there was a myriad of other schemes in place to help the banks. QE was about two things:-

1) on the surface to try and stimulate the economy (not the banks) and

2) to try to ensure there were sufficient demand for state debt in the market to ward off bond market vigilantism and therefore to artificially sustain the unsustainable political programme of austerity that is being waged

That banks were involved in the transmission mechanism of this and didn't play game is clear, that they may have benefited as a by-product of this situation is also not at doubt. But your initial claim that QE was primarily intended to help out the banks is total and utter bullshit.

 

[love detective]

http://www.newint.org/blog/2012/07/05/john-lewis-cleaners/

hold on though - co-operatives are nice friendly places to work for that don't have any of the negative charactersitics of shareholder owned companies

they are not subject to the same competitive pressures that other companies working in those same markets are subject to

i mean they would never end up subcontracting out elements of their business in order to drive down costs without any concern as to the impact of those decision on the actual workers who do the work would they, erm hang on....

 

[love detective]

ok, maybe to areas of the business that aren't part of the co-op, but within the co-op there will be no shareholder pressure to increase profits by driving down staff wages and conditions because the shareholders are the staff.

sorry but that's laughable - if a co-op can pick & choose which parts of its business are not actually part of the co-op (and therefore outsource and treat them like any other company) - it doesn't say much about the nice, friendly cuddly image of the co-op

you say there is no shareholder pressure to increase profits by driving down staff wages at co-ops - what has the pressure that lead to JL outsourcing its cleaning which ultimately ended up increasing profits by driving down wages and forcing people to work more for less

the main argument from me is that co-ops are subject to the same economic pressures & competitive impulses as are non co-op companies - the outsourcing of cleaning contracts shows exactly that happening in reality

 

[love detective]

It's completely in the nature of business that things are outsourced.

bingo!

like a stopped calendar, once a year you actually get something right

it's completely in the nature of business to look to drive down costs and if this driving down of costs is against the interest of workers then so be it, and this applies regardless of the ownership structure of the companies operating in the market

 

[love detective]

I've just spotted this gem.

So let me get this straight. Your argument isn't about the impact of QE on increasing liquidity in the market, and bolstering the banks cash reserves, it's about whether or not this was an intended impact of the scheme.

So your contention is that despite the lack of liquidity in the market being the subject of several panicked international meetings and stop gap solutions over the previous couple of years that had only partially solved the problem on a temporary basis, the policy they eventually agreed upon that actually solved the problem long term and led virtually immediately to a sustained period of extremely low libor rates, and high levels of liquidity was what? Just a happy accident?

if you'd actually been able to read and follow the thread you would know that our argument from the very start has been about the reasoning & intentions behind QE, not the actual impact or the by-product impacts of it.

that I keep having to remind you what you are meant to be backing up here is pretty revealing

 

[love detective]

I've just found the figures to counter this assertion, and they're pretty conclusive.

Prior to the interbank lending market seizing up in August 2007 the total amount owed between the UK banks was £639 billion.

After August 2007 this dropped almost immediately to below £200 billion, and was still at approximately this level in early 2009 prior to QE kicking in, at the point the SLS was closing, and you're claiming that the situation had already resolved itself

By the end of 2009 after QE had kicked in the rate of interbank lending had more than doubled to £424 billion, so QE had achieved what the previous loan / loan protection schemes hadn't.

You attacked my understanding of the timeline earlier. I'd contend that it's actually you who's got the timeline mixed up here.

figures

You can't help but make a fool of yourelf over this stuff can you

while the SLS scheme was in operation there was no need for banks to borrow in the market - they borrowed a shit load in 2008 while it was available through state help to get them through what was at that time an un-quantifiable period of seizure in the markets. Don't forget that in 2008 alone the total liquidity provided by the states liquidity schemes (nothing to do with QE) was around £450bn (£200bn from SLS and £250bn throught he treasury insurance scheme)

They filled their boots at that point in time, overfilled them actually because they didn't know what lay ahead in terms of whether markets woud ever become functioning again

by 2009 however markets did begin to open up (mainly because most of the banks did indepth audits and took big write downs on positions so it was much more visible which banks had the biggest exposures to the toxic crap). When the markets started to thaw, there was a big push for banks to free themselves from state aid and for two reasons 1) it was quite expensive relative to now available market rates and 2) it carried a stigma with it which they wanted to unburden

So throughout 2009 liquidity loans started to be repaid (as the graph quoted ages ago shows) which was in return replaced by market funding leading to the increase you point out

that you say the doubling of money market funding to 424bn (an increase of £224bn) was achieved by £75bn of QE which you admit nothing was done with this other than put it back on deposit with the central bank is astonishing. No, the truth is that money market funding increased because the markets thawed in 2009, as i've been saying all along, and things started to operate again at levels nearer what they had been before the freeze.

you continually post up stuff here that detracts from your own case muppet

keep throwing those fish into the barrel though and i'll happily keep shooting them

 

[love detective]

To pick up on the earlier discussion around bank runs, the following are the monthly figures for the total UK site liabilities for the period around the northern rock melt down.



So £68 billion cash was removed from the banks in one month at a time at which their average total cash reserves between them had been in the region of £30 billion.

Still, I'm sure LD must be right, and that this wasn't in any way a significant factor in the loss of liquidity in the banks.


figures

sorry but once again, you're playing around with numbers you have no clue about and are once again making a fool of yourself for doing so

you think the figures that you have quoted represent the amount of sight deposits that customers have with banks

the figures actually (if you read the title of the thing you linked to) represent sight deposits that uk banks have with other uk banks (excluding the central bank). so they represent bank to bank lending

that there is a big drop at exactly the time the money markets freeze up represents the facts that banks started to be shut out of the money markets at that time - and instead had to rely on state help. For example the central bank had to step in with emergency funding of 30bn for northern rock alone at that time

that you think those figures show customers withdrawing 60bn of cash from banks is absurd - where did this money go even if that was what it represented (which it doesn't) - under the mattress? or into other banks?

 

[redsquirrel]

the main argument from me is that co-ops are subject to the same economic pressures & competitive impulses as are non co-op companies - the outsourcing of cleaning contracts shows exactly that happening in reality

I'm not up on all the QE and gilt debate (though I think I'm getting some sense of it, ta to you and Jean-Luc), but I'm amazed that anybody could argue against this point. I mean it's just bloody obvious.

 

[littlebabyjesus]

I'm not up on all the QE and gilt debate (though I think I'm getting some sense of it, ta to you and Jean-Luc), but I'm amazed that anybody could argue against this point. I mean it's just bloody obvious.

It is worth pointing out again, I think, that the cleaners won their dispute. Massive kudos to them for what looks like it was a brilliantly worked piece of industrial action, but I would also like to know what if any pressure JL put on its subcontractor.

It is shit that JL subcontracts its cleaning to non-coop companies. But that doesn't mean that coops are subject to the same pressures and impulses as shareholder-owned companies. They're not. JL is incorporated in such a way (it's written in its constitution) that the trust that runs it is obliged to run the company for the benefit of its workers. And that does have concrete results in terms of the way its workers (the ones who are actually part of the coop at least) are treated. This is in stark contrast to shareholder-owned companies that are normally incorporated in such a way that they are obliged to run the company for the benefit of its shareholders.

So internally, this makes a huge difference - the company is run for its members. Externally - the way it relates to the rest of the economy - I'd like to see some figures. JL has a reputation for treating its suppliers better than other companies in the same sector. Even those cleaners at the JL store who went on strike - I'd like to see their pay and conditions compared to cleaners subcontracted by other companies.

JL is far from ideal, but stating that being a coop makes no difference is overstating the case. It makes less difference than one might hope, but I would contend that the more coops there are, the better they will behave. The pressures on them will change because the capitalist relations within them will have changed. I come back to that question 'who owns what?'. If you're coming to a society fresh and trying to work out the power dynamics of that society - and if you know that the concept of private property is well entrenched - that question 'who owns what' is just about the first port of call. Changing patterns of ownership changes behaviour.

 

[free spirit]

you don't understand a thing about QE by the looks of things

QE can't go on for ever - it will end in two ways

1) the bank of england starts selling the gilts on the market - this along with the current need of the state to issue fresh gilts to fund the deficit would bring about a glut of gilts on the market, forcing rates up and potential fiscal crisis

2) gilts have maturity date - at which time the issuer (the state) has to repay the principal to the holder (currently the BOE). In order for the state to pay back they have to issue more gilts to fund the repayment, this along with the current need of the state to issue fresh gilts to fund the deficit would bring about a glut of gilts on the market, forcing rates up and potential fiscal crisis

That you say the reversal of QE would be a voluntary arrangement is like saying that the fact that you have to pay your mortgage back is ultimately a voluntary arrangement

This is like wading through treacle.

Do you not get the difference between a loan with a fixed payback date that uses something as collateral, and someone actually buying that thing off you?

In the first scenario the banks were obliged to pay the loans back within a relatively short time frame, in the second they're under no obligation to do anything at all, the money is theirs to do what they want with it for as long as they want.

The fact the BoE may decide at a later date to try to flog the gilts on the open market has no bearing on the situation from the banks point of view - they're free to participate in buying those gilts at that time if they choose to, but are under no obligation to do so.

Or do you work on the basis that anytime you buy something from someone they're automatically obliged to buy it back again from you if you tell them to?

 

[free spirit]

while the SLS scheme was in operation there was no need for banks to borrow in the market - they borrowed a shit load in 2008 while it was available through state help to get them through what was at that time an un-quantifiable period of seizure in the markets. Don't forget that in 2008 alone the total liquidity provided by the states liquidity schemes (nothing to do with QE) was around £450bn (£200bn from SLS and £250bn throught he treasury insurance scheme)

so when you said the money markets had been freed up and were operating freely by the start of 2009 so that QE wasn't needed for this purpose, what you actually meant was the complete opposite?

You realise of course that all (or maybe virtually all) the previous funding was in the form of loans, or loan guarantees, and that the loans needed to be repaid over the next 3 years, so all that extra cash in the market was going to be withdrawn over that period despite the fact that the money markets, or the interbank lending market at least, had hardly been freed up at all, and LIBOR remained at something like 8 x it's more usual rate.

 

[littlebabyjesus]

The fact the BoE may decide at a later date to try to flog the gilts on the open market has no bearing on the situation from the banks point of view - they're free to participate in buying those gilts at that time if they choose to, but are under no obligation to do so

You have missed a point here, I think. Of course they're under no obligation. They're under no obligation to buy govt gilts now, but they do. But the more gilts the govt tries to sell, the higher the interest rate it will have to offer in order to sell them. That's just simple supply and demand - increasing the supply reduces the price.

So ld is right on this, I think - and everyone I've read agrees on this point: at some point QE will need to be unravelled - all that extra money that they printed up will need to be destroyed. I would enter a possible third scenario to the ones ld suggests, which is that the BofE could do some more QE to buy more gilts. I would wonder how long such a trick could continue before confidence in the currency collapses, though. But Japan's been doing it for over a decade now and is currently on its eighth round! Link. We could very well be in for a future similar to this - prolonged slump with low interest rates, low private investment levels and round after round of qe. In fact, we already are in this process, as many predicted in 2007. For Japan 1990, read UK 2007. The structural similarities in the countries' booms and debts are strikingly similar. And in Japan, for the last 20 years, the overextended private sector has been paying its debts down, to be replaced by govt debt, whose yields are kept very low through qe.

As slump continues, and round after round of QE is carried out, it does rather leave one thinking of Wile Coyote at the point where he still hasn't realised he's run off the cliff. For money systems to work, people need to have confidence in them. Once that confidence goes, the whole thing collapses. Don't look down, Wile!

 

[free spirit]

that you say the doubling of money market funding to 424bn (an increase of £224bn) was achieved by £75bn of QE which you admit nothing was done with this other than put it back on deposit with the central bank is astonishing. No, the truth is that money market funding increased because the markets thawed in 2009, as i've been saying all along, and things started to operate again at levels nearer what they had been before the freeze.

£75 billion was just the first bit of QE, by the end of 2009 when the majority of this unfreezing of the interbank lending markets took place, the BoE had bought around £200 billion worth of gilts.



It's not me who's wrong here, and it's odd that I'm the only one posting up facts and figures to support my case. Why is that?

 

[free spirit]

You have missed a point here, I think. Of course they're under no obligation. They're under no obligation to buy govt gilts now, but they do. But the more gilts the govt tries to sell, the higher the interest rate it will have to offer in order to sell them. That's just simple supply and demand - increasing the supply reduces the price.

not you as well.

how hard is this? Under the previous schemes the banks HAD to repay the loans on a fixed timescale.

Under this scheme the money is theirs to do what they want with for as long as they want. The fact the BoE might have to try to sell on the gilts in the future has zero baring on the other banks liabilities, they're under no legal obligation to buy them back from the BoE are they.

If they choose to buy them back then that's their choise, but the BoE can't force them to buy them back.

So ld is right on this, I think - and everyone I've read agrees on this point: at some point QE will need to be unravelled - all that extra money that they printed up will need to be destroyed.

I've never said it won't, but the banks are under no obligation to buy them back if they don't want to, which is vastly different to a scenario where they'd just been loaned the money and had to repay it within a relatively short timescale.

I reckon I could make a killing from those on this thread as a loan shark btw given how you all seem to not understand the difference between a loan using an asset as a guarantee with a fixed repayment period and a sale.

eta, it's not me that's missing the point.

 

[littlebabyjesus]

Ok, I see. Misunderstanding I think. I was looking at this from the BofE's point of view rather than the banks'. Yes, you are right from that point of view - the money the banks received from qe through sale of their govt gilts doesn't have to be repaid. It's a change in liquidity of funds, rather than an increase in funds, though, isn't it? Changing govt gilts into cash, basically.

From what I can tell, qe is no problem for the banks. It's the Central Bank that has given itself a future headache. That's what I was talking about.

 

[free spirit]

you keep seeming to miss the point that at no point on this thread have i argued against the simple/banal truism that QE forces up the price of gilts thus driving down their yield.

what the fuck are you prattling on about here?

At no point have I even mentioned the price or yield of gilts, and none of my references have related to this either.

If you've been discussing the implications of the price and yields of gilts, then you've been having a completely different conversation to the one I've been having, which is odd seeing as the starting point for this discussion was you disagreeing with my points earlier in the thread.

 

[littlebabyjesus]

tbf I think I misunderstood you too, fs. Easy to talk past one another in this particular subject, ime.

And there is a lot to dispute - the BofE has as good as admitted that it is taking a leap into the unknown somewhat with QE. In the 70s we had 'stagflation' - high unemployment, high interest rates, high inflation and low growth. But now we have something different - high unemployment, low interest rates, low inflation and no growth. The key factor I would see is employment. If you want growth, you have to have people doing stuff! So austerity is self-defeating, leading to higher govt deficit, not lower, which requires qe to make the deficit viable.

What I'm unsure about is how this can end. The way out of qe is to return to growth, which would reduce the deficit and allow the BofE-owned gilts to be sold back. But we're not likely to return to growth as long as the private sector, taken as a whole, is paying down its debts, which is what has been happening in Japan and now appears to be happening here.

Breaking this cycle could be done through government spending programmes - govt investing directly in the economy to replace private investment. This is going to happen in one way or another in the coming years, I think - it's been happening in Japan already. Steve Keen has a suggestion for a different solution. He suggests reducing the private debt burden ( which is the real story of the crisis - it is a crisis of too much private debt, not public debt - public debt has been rising precisely because the private sector has been seizing up, not the other way round) by attacking the problem from the other end. Instead of buying gilts from banks, you give the money you've printed directly to those who are in debt. This is particularly suitable in the UK, where household debt is enormous. You give everyone £10k, for instance, on condition that they use this money first to pay down any debts they might have. They are free to spend anything left over.

 

[free spirit]

Ok, I see. Misunderstanding I think. I was looking at this from the BofE's point of view rather than the banks'. Yes, you are right from that point of view - the money the banks received from qe through sale of their govt gilts doesn't have to be repaid. It's a change in liquidity of funds, rather than an increase in funds, though, isn't it? Changing govt gilts into cash, basically.

yes, as I've repeatedly stated, it's not a change in the overall balance sheet, it's a change in their actual cash holdings.

and it was the cash position that was the systemic problem, not access to gilts, as they could all have happily swapped gilts for other gilts all day long but it wouldn't have altered the fundamental problem that they didn't have sufficient cash within the entire banking system to cover their liabilities, and as a result they were all incredibly reluctant to lend to each other still.

The previous schemes had managed to stave off total collapse, but hadn't actually worked to really free up the interbank lending market, and bring libor down to anything like it's previous level precisely because they were loans that needed repaying in the not too distant future, so didn't really alter the medium term position, and the banks were still hoarding the cash in order to ensure they had sufficient to repay these loans when they fell due. They'd certainly not have been wanting to lend large volumes of it to other riskier banks that might have gone bust in the intervening period, leaving the original bank still needing to find that cash to give back to the BoE.

LD is arguing that the intent behind the injection of £370 billion of actual cash into the banking system that resulted in the freeing up of the interbank lending rate, and Libor dropping like a stone and staying down had nothing to do with any of this, the fact that it actually sorted the situation out was just a happy byproduct of it's true purpose or something. Also that the previous loan schemes that needed to be repaid from cash reserves of the banks that were 1/3 lower than the total value of those loans at the point of QE starting wasn't a problem either.

 

[free spirit]

tbf I think I misunderstood you too, fs. Easy to talk past one another in this particular subject, ime.

given that I've never once mentioned the price or yields on gilts, I don't understand how anyone could think this was what I was talking about.


I think I may have noticed LD mentioning something about it at some stage previously, but as it was irrelevant to the point under discussion I ignored it.

 

[love detective]

This is like wading through treacle.

Do you not get the difference between a loan with a fixed payback date that uses something as collateral, and someone actually buying that thing off you?

In the first scenario the banks were obliged to pay the loans back within a relatively short time frame, in the second they're under no obligation to do anything at all, the money is theirs to do what they want with it for as long as they want.

The fact the BoE may decide at a later date to try to flog the gilts on the open market has no bearing on the situation from the banks point of view - they're free to participate in buying those gilts at that time if they choose to, but are under no obligation to do so.

Or do you work on the basis that anytime you buy something from someone they're automatically obliged to buy it back again from you if you tell them to?

Your changing the topic - my post was a response to your post asking:-

'do i think QE is forever' what do you mean?

I answered it, and explained that QE cannot go on forever, it will come to an end eventually in one of two ways

that you take a hairy strop because i answered your question is bizarre

 

[love detective]

£75 billion was just the first bit of QE, by the end of 2009 when the majority of this unfreezing of the interbank lending markets took place, the BoE had bought around £200 billion worth of gilts.

View attachment 23782

It's not me who's wrong here, and it's odd that I'm the only one posting up facts and figures to support my case. Why is that?

you're right about one thing, it is like wading through treacle

you claimed earlier that the £75bn was the thing that made market rates drop from their high of 240 or whatever to around 20/40. In which case why was there a need for another £300bn subsequent to that? You admit yourself that the majority of the unfreezing in the interbank lending markets had taken place by the end of 2009, and the graph that you posted shows fairly constant rates ever since - in which case why the need for another £175bn since then?

and i noticed you didn't respond to my post where you asked me what was the reason for QE in october 2011 - where i replied that was the time the fear of a double dip recession was starting to mount and so more monetary stimulus (in the shape of QE) was announced. keep on avoiding the inconvenient facts to your shit thesis free spirit

 

[free spirit]

But your initial claim that QE was primarily intended to help out the banks is total and utter bullshit.

For the record my initial point on this subject was this.

really. So it's not been partly used by the banks to build up their capital reserves to meet the government's new requirements for the proportion of capital reserves to liabilities the banks must hold in order to ensure they can meet a greater proportion of their existing liabilities?

in response to this point from LD

quantitative easing has nothing to do with 'meeting the banks existing liabilities'

now I did also go on to say this,

Quantitative easing was therefore a win win for both sides, but the ultimate driving force for it IMO was the recognition of the need to inject huge quantities of hard cash into the banks, and that without QE the banks would be forced to achieve this in ways that would negatively impact on government's ability to borrow at low interest rates. I entirely acknowledge the potential that the politicians aren't even aware of this, and believe their own bullshit about getting the banks lending etc, but it is largely bullshit, as the figures on the ground clearly demonstrate.

which is a bit more in line with LD's statement, but my point all along has been arguing against LDs initial statement that QE had 'nothing to do with meeting the banks existing liabilities'.

I'd find it hard to determine exactly which motivation for QE was the strongest, but resolving the cash problems of the banks, and thereby solving the credit crunch aspect of the problem was certainly a major motivating factor behind QE IMO.

The other key liability that it solved for the banks was the £180 billion liabilities they owed to the BoE from the previous loan scheme that LD seems to think somehow wasn't an issue.

 

[free spirit]

you're right about one thing, it is like wading through treacle

you claimed earlier that the £75bn

actually, you introduced the £75 billion figure.

 

[free spirit]

and i noticed you didn't respond to my post where you asked me what was the reason for QE in october 2011 - where i replied that was the time the fear of a double dip recession was starting to mount and so more monetary stimulus (in the shape of QE) was announced. keep on avoiding the inconvenient facts to your shit thesis free spirit

I've not denied this would also have been a motivating factor.

You're the one that seems to be denying that the rise in the libor rates at the same time could have had anything to do with it, as you're denying that this aspect had anything to do with the motivation for QE.

 

[love detective]

LD is arguing that the intent behind the injection of £370 billion of actual cash into the banking system that resulted in the freeing up of the interbank lending rate, and Libor dropping like a stone and staying down had nothing to do with any of this

you keep saying this and i keep telling you that you're incorrect

In post 184 of this thread, almost 300 posts ago i said this

The reasons the state indulges in QE is that they think they can stimulate real activity in the economy purely through monetary shenanigans, and part of this reasoning is that by pushing down the yield on gilts (through artificially driving up the price of gilts through QE/Central bank purchases) and therefore pushing down market interest rates in general it will encourage people to 'do stuff'.

That you seem to keep on insisting (in the face of a whole lots of posts from me that say the contrary) that I have argued anything like what you suggest above in your case says a lot more about your lack of comprehension and reading skills than it says about me

 

[free spirit]

Your changing the topic - my post was a response to your post asking:-

'do i think QE is forever' what do you mean?

I answered it, and explained that QE cannot go on forever, it will come to an end eventually in one of two ways

that you take a hairy strop because i answered your question is bizarre

and I'd also explained in that post how QE differed from a loan scheme, in that the cash injected into the banks was a permanent injection of cash and not a temporary one.