Bank of England Still Hot on the Quantitative Easing
Remember that the US tends to follow the BoE's example, but with the Fed anxious to pull out, the BoE might be on its own with this one. Here's to hoping Trichet takes a cue from Geithner and starts launching into an expletive-filled rant at Bank of England's Mervyn King. Picture it. "WTF are you doing, King? Lay off the easing already, you asshat!! ^@#$@$@%$@#!!"
We're waiting anxiously for that. Until then, we get to watch the BoE act like a bunch of fiduciary crack addicts at the press. Who knew there existed a central bank that could make Bernanke look bad? Pffft.
The Bank of England decided Thursday to expand its asset-purchasing plan, saying that while there were some encouraging signs in the British economy, the recession was “deeper” than previously thought.
The Bank of England also voted to keep its benchmark interest rate unchanged at 0.5 percent, a record low. The European Central Bank also kept its main refinancing rate unchanged at a record low of 1 percent on Thursday, as expected.
The Bank of England’s policy committee voted to increase the amount of assets, mainly goverment bonds, that it planned to purchase by 50 billion pounds, or $85 billion, on top of 125 billion pounds already spent. Some economists had predicted the bank would pause after recent positive data from the manufacturing and services industries and an improvement in the housing market.
“Though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated,” the central bank said in the statement.
The Bank of England began pumping cash into the financial system in March to help put Britain’s economy back on its feet, and bank watchers were split over whether it had achieved its goal.
Those who favored an expansion of the plan said it had improved the supply of credit only marginally so far, and more needed to be done. Those who opposed it said the British economy was already showing signs of improvement.
The U.S. Federal Reserve, the only other major central bank that decided in favor of large-scale quantitative easing, has already started to scale back its measures. It announced in June that it would not extend one of its emergency lending programs, and it cut back two others.
If you believe in "The Reacharound Conspiracy", of course, this means the Fed will also ramp up its purchases of "US Treasury debt" which means "you buy mine and I'll buy yours" as an emergency plan.
But who believes in such things?
"Currency swap" my ass.
I would like to ask anyone over the age of 18 this very important question: what feels better; stimulating yourself or having someone else stimulate you?
That's all we're saying.