Nope, he’s still ignorant

Quantitative easing is the process where a central bank (in the United Kingdom, the Bank of England) buys bonds that have been issued by the government that owns it. The aim is threefold. First, it wants to provide liquidity in the form of new money to the economy when private banks are not lending enough to meet the need for money creation. Second, the aim is to create inflation when (as now) the economy stubbornly refuses to do so of its own free will and the curse of deflation hangs over us. Third, it hopes that because of changes in the way QE, at least in theory, changes financial asset portfolios that some new money will trickle into the real economy to stimulate growth.

So, that third reason: lower long term interest rates by getting people to move out along the risk curve.

So, what does he then complain about?

And the new money has only given rise to asset price inflation

Which is the fucking proof that it’s worked, isn’t it?

11 thoughts on “Nope, he’s still ignorant”

  1. when will people understand that loosening monetary policy pushes asset prices up, tightening it pushes them down – that isn’t some idiosyncratic feature of QE, it is a consequence of monetary policy always and everywhere. This is arbitrage, if the returns you can get on bonds (or cost of borrowing) rises or falls, that’s going to wash out across all asset markets.

  2. “Which is the fucking proof that it’s worked, isn’t it?”

    Not to the 20% of a professor and his acolytes. Asset price inflation is not real or beneficial inflation, apparently.

  3. How much of that asset price inflation is house price inflation? Certainly real but not beneficial (except to owners of large or expensive properties).

  4. I think the point is that if people have more money they will experience even more joy when they pay their taxes.

  5. In this week alone he has admitted to not having proper economics qualifications when asked about doing a masters
    Then when he went on a rant about accounting standards producing ‘works of fiction’ I asked if hadn’t he used standards to prepare accounts for his clients he replied that they had changed a lot since he was an auditor. So no knowledge of accounting standards etc either.
    Makes me wonder is there any subject he actually does know about?

  6. I’ve said before that he is omni-incompetent. He’s the mirror inverse of a polymath. He’s a polyignoramus. When I see someone who spouts gibberish in the fields about which I do have some knowledge, and also see him being roundly castigated by subject-matter experts in fields in which I am unversed, I am forced to conclude he is equally full of shit across the whole spectrum. There are other signs, too, like the thin-skinned response to any criticism and the inability to maintain a consistent viewpoint through time (one is allowed to change one’s mind as facts change, but not simply to jettison previously-held stances to accommodate new audiences). His sole talent seems to be self-promotion, and even that has to sooner or later run up against the reality that he’s a) mendacious b) malign c) ignorant of what he purports to know and d) thick as pigshit.

  7. “The aim is threefold.”

    Ah, the inevitable list. A bit late in the latest sermon and a mere three items in length; he must have had a tiring day.

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