Bank of England Launches £75bn More QE!
- “It was a carefully contrived occurrence. International bankers sought to bring about a condition of despair, so that they might emerge the rulers of us all.“
Louis McFadden on 1929 Stock Market Crash. Louis McFadden died of poisoning shortly thereafter.
– - “The depression was the calculated ‘shearing’ of the public by the World Money powers, triggered by the planned sudden shortage of supply of call money in the New York money market….The One World Government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank.”
Curtis Dall, FDR’s son-in-law as quoted in his book, My Exploited Father-in-Law
– - QE and debt monetization means currency debasement. It does nothing but stir inflation. The Illuminist central banksters would like us to believe that shifting money around, creating money out of thin air, playing numbers on their computer screen… generates economic growth. I don’t think so! Central banks are the cause of the economic depression. (emphasis mine)
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Austrian Economics
In contrast to most mainstream theories on business cycles, Austrian School economists focus on the credit cycle as the primary cause of most business cycles. Austrian economists assert that inherently damaging and ineffective central bank policies are the predominant cause of most business cycles, as they tend to set “artificial” interest rates too low for too long, resulting in excessive credit creation, speculative “bubbles” and “artificially” low savings.[32]
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According to the Austrian School business cycle theory, the business cycle unfolds in the following way: Low interest rates tend to stimulate borrowing from the banking system. This expansion of credit causes an expansion of the supply of money, through the money creation process in a fractional reserve banking system. This in turn leads to an unsustainable “credit-fuelled boom” during which the “artificially stimulated” borrowing seeks out diminishing investment opportunities. This boom results in widespread malinvestments, causing capital resources to be misallocated into areas which would not attract investment if the money supply remained stable. Austrian School economists argue that a correction or “credit crunch” – commonly called a “recession” or “bust” – occurs when credit creation cannot be sustained. They claim that the money supply suddenly and sharply contracts when markets finally “clear”, causing resources to be reallocated back toward more efficient uses.
– - Bank of England launches £75bn more QE
By Philip Aldrick, http://www.telegraph.co.uk/
The Bank of England has taken pre-emptive action to rescue the faltering recovery by increasing its money printing programme by £75bn.
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The Chancellor has cleared the Bank to increase the scale of its quantitative easing (QE) programme from £200bn to £275bn due to the deterioration in the economic outlook.
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In his letter of authorisation to Sir Mervyn King, the Bank’s Governor, George Osborne hinted that the Bank could consider using the funds to buy up to £50bn of “private sector assets”, which would potentially transform the way QE has been operated.
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So far, all but £1.3bn of the £200bn of existing QE has been used to buy gilts. But with gilt yields now even lower than during the first programme, economists are doubtful that a straight policy repeat would have much effect. Buying corporate or mortgage debt, as the US did in its original $1.7 trillion QE scheme, could help ease the credit strains in particular parts of the economy.
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Leaving rates on hold at 0.5pc, Sir Mervyn said in his letter to the Chancellor: “The pace of global expansion has slackened, especially in the UK’s main export markets. Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery.
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“The available indicators suggest that the underlying rate of growth has moderated. The squeeze on households’ real incomes and the fiscal consolidation are likely to continue to weigh on domestic spending, while the strains in bank funding markets may also inhibit the availability of credit to consumers and businesses.
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