End of QE and impending financial crisis : Mon Jun 24, 2013 12:55 pm  

Are we on the verge of entering the next and most severe phase of the financial crisis? QE looks like it is on its last legs. It was supposed to buy time while borrowings were got under control. In fact, all that has happended is that borrowings (especially of government) has increased. At some point soon things are going to get tough, very tough.

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 1:01 pm  

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 1:07 pm  

Dally wrote:

Are we on the verge of entering the next and most severe phase of the financial crisis? QE looks like it is on its last legs. It was supposed to buy time while borrowings were got under control. In fact, all that has happended is that borrowings (especially of government) has increased. At some point soon things are going to get tough, very tough.

Austerity and absence of Keynesian investment has made it all a lot worse, just as was obvious before the last election.
The hole we are still in is now deeper and has steeper sides.

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 1:24 pm  

What would happen if we just drew a line under everything and just wiped all Government debt?

What I don't really understand is how you can have a global financial crisis where the whole world is in debt without just creating money to clear it? If you can't have QE to clear it, how do you ever achieve it as surely all your are doing is moving debt around from one economy to another?

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 2:55 pm  

F##* it, leave the debt for our kids to clear up, whats the problem ?

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 2:57 pm  

JerryChicken wrote:

F##* it, leave the debt for our kids to clear up, whats the problem ?

None!
I haven't got any.

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 3:37 pm  

Me neither. I'd like interest rates back up to 16 & 17 percent please

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 7:51 pm  

peggy wrote:

Me neither. I'd like interest rates back up to 16 & 17 percent please

For savers that is.

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 7:58 pm  

JerryChicken wrote:

F##* it, leave the debt for our kids to clear up, whats the problem ?

I'm afraid that would be counter-productive as the word is that the only way that things can be sorted is to cut benefits (pensions and care) to pensioners.

Re: End of QE and impending financial crisis : Mon Jun 24, 2013 8:02 pm  

Saddened! wrote:

What would happen if we just drew a line under everything and just wiped all Government debt?

Do you mean printed money to directly pay off the debts? Or simply refusing to pay the debt back?
If the latter then future borrowing would be almost impossible as rates would be monumentally high or people would simply refuse to lend to us at all. The value of the pound would fall dramatically. The economy would suffer from a significant fall in demand since 70% of government debt is held by people or institutions within the UK. There would be unemployment and possibly deflation.

Saddened! wrote:

What I don't really understand is how you can have a global financial crisis where the whole world is in debt without just creating money to clear it? If you can't have QE to clear it, how do you ever achieve it as surely all your are doing is moving debt around from one economy to another?

The whole world isn't in debt. Just a lot of governments that's all. There are plenty of companies and individuals who hold wealth.