We recently reported the new policy of quantitative easing ('quantitative easing') development in the UK to combat the credit freeze: Print by the state huge amounts of money, which he uses to buy in the market very large quantities of government bonds in the long term to bring down the price of these notes and force banks to invest in something else.
Why they do it and how it works (or not) our pedagogical introduction see here: [The Crisis for Dummies " The Bank of England released the parachute. "] For now
, recall that, according to opinion of the Bank of England itself on its own policy is a risky maneuver, whose effects are uncertain in the long term.
Well, first news: Americans are shooting today with both hands on the same choke as the Federal Reserve has announced the extension of its plan of easing the 'Treasuries' (bonds) in the long term.
Less than two weeks apart, the Fed up on the same ring as BofE ... for $ 300 billion USD .
[Telegraph.co.uk: " U.S. Federal Reserve plans $ 1.15 trillion injection "]
And - oh gosh ben! - Second story, according to Karl Denninger éconoblogger the perverse have already been felt in England, holders of bonds offered for sale seven times more songs than necessary . For Denninger, no doubt, BofE exhausts his strength in vain, and prices will go up immediately after the sale, forcing the flight forward until the state owns 100% of its own debt. And then goodbye the solvency of the State .
[Market Ticker: Caution is quantitative easing "]
But - aaargh! - Turning predictable for the Financial Times , this abundance of sellers rather good news :
"The Bank WAS Overwhelmed With Offers to Sell the bonds by Some of the Country's Biggest Investment Group in year early sign of icts historic success over quantitative easing move. "So how to explain such a divergence of opinion about the abundance of dealers of government bonds? It is a matter of conviction in this economic model or another. The economists
[Financial Times: "Stampede to sell Government Bonds "]
" Austrian " as Mike Sheldock, Karl Denninger, Loic Abadie and our readers the most talkative, are clearly of the opinion that it is bad news print money to pay its debts is from all eternity, the royal road to bankruptcy of the state.
A good article here: [Financial Sense: "A golden lining in a perfect Storm "]
More distant from the popular sense, the economists " monetarists ", as Scott Sumner, Milton Friedman and Ben Bernanke, applauding For them, it is possible to revive the real economy by quantitative easing, especially if such a policy is accompanied by negative incentives for hoarding.
For the brave, the last point of discussion on this blog itself around a proposal by Scott Summer: [The Crisis for Dummies " Finally an original idea ... "]
Notice that to cite examples from Austria, I am only quoting bloggers, that you immediately gives an idea on whichever side is currently in power.
Besides that, uncertainty is inevitable in the home, since the Austrians cry wolf and advise you to buy gold, where the monetarists are just happy that the state finally decided to press the button "recovery".
And investors have made their first verdict, which referred to the rise of the Dow Jones and Standard & Poors on the announcement of the Fed's decision.
As to who is right ... one more question for Maystadt ...?
Personally I think the monetarists do not care finger in the eye to f.. n, and the carrots are cooked, because:
- The club has already monetarist bankrupt on Chile, Argentina, the Asian tigers, Poland Walesa and Yeltsin's Russia , and mocks the economic development as the fortieth year. Anyway this is the thesis of " The Shock " Naomi Klein.
- If quantitative easing is likely desperate measure, if not why not be implemented earlier, before the 'credit crunch' does come to a crater of 10.000 billion dollars in fiscal American?
[The Crisis for Dummies: "View trillion "]
But it's hard to keep a cool head when I hear about this band of true hawks, and I do not technical skills to refute the arguments of excellent Scott Sumner, who, despite the fact that he drinks from the same source, seems much more civilized than the murderers of Fortis.
A lack of knowledge, will judge each according to his beliefs ...
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Crisis for Dummies 
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