Tuesday, October 18, 2011

Turn those printing presses off please!!!

Pop-up tents © fintag

News comments:
UK Inflation. 5.2%

So the excuses we are hearing about are related to energy costs. Well these are high because Sterling has been hammered as its a low grade currency. Peanuts = higher import costs = high energy prices. And lots of other high prices.

But the real reason is the printing presses are distorting the money supply. Same thing in the USA too.

If these morons want to get out of this mess, put rates up, lower sales taxes and put duties on stuff made in China.

Basic economics. To reduce inflation you put up interest rates. You don't feed the fire with petrol.

Today's shorts:
UK (bloomberg)


Anonymous said...

"It is crucial to the health of the world economy that we find ways of allowing competitiveness to adjust so that trade imbalances, and hence the present scale of indebtedness, can be reduced. Neither liquidity nor austerity are answers to the question of how to restore a loss of competitiveness."....

"Asset purchases work by increasing the amount of money in the economy. When the Bank buys assets, the people who sell the assets to us receive money which can then be used to buy other assets. In turn, the sellers become buyers of other assets, and so on indefinitely as the money is transferred from one account to another. The prices of assets that investors choose to buy go up, raising wealth and pushing down on yields. Those yields are the opposite side of the coin to the borrowing costs of companies. In these ways,
the Bank purchases of assets increase demand in the economy."