Ritchie will be pissed

The Bank of England should consider unwinding its £435 billion quantitative easing programme earlier than planned, one of its eight policymakers has suggested.

Wait for the spin turn from “QE will never be unwound” to “QE doesn’t need to be/shouldn’t be unwound.”

At which point someone really does need to point it out to him. There is that bolus of M0 floating around the economy as a result of QE. That will, at some point, cause inflation. Do note that Ritchie himself says this will happen as and when you print money. We can reduce that inflation by reversing QE. Or, as he says, we can deal with the inflation by raising taxes.

That is, if we don’t reverse QE we must, at some point, increases taxes. Sure, the Dicktator always thinks MOAR TAXES. But someone really should ask him. Reverse QE or more taxes Mr. Senior Lecturer at Islington Technical College?

7 comments on “Ritchie will be pissed

  1. ‘earlier than planned’ in the excerpt is not quite true. The threshold for unwinding is flexible. Originally it was getting unemployment under 7%. When that looked like it would happen the BoE changed the threshold (pdf) to ‘Interest rates being above 0.5%’.

  2. “Central bankers are trying to crash the world economy”

    Really! Central bankers are part of a conspiracy to crash the world economy, a conspiracy they have individually and collectively kept under wraps all these years. I don’t suppose there is any point asking Spud for just a hint of evidence for this is there?

  3. What I want to know is why would they want to trash the world economy? These are people with families, friends and acquaintances, does he seriously think they are all mad?

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