He’s still just not getting it, is he?

The European Central Bank is still e-printing €60bn a month under its QE programme and is committed to doing so until September 2016. In our “Climate QE” paper we propose that to address the challenge of the kind posed by India’s prime minister the ECB should allocate, say, €10bn a month from this QE programme. This could be used to buy climate change bonds from the European Investment Bank, which could then direct these funds to climate change programmes in developing countries. Such an approach could galvanise and put pressure on other rich countries to introduce their own climate QE initiatives.

QE is, by design, reversible.

What he is suggesting is not reversible. Therefore it’s not QE.

19 thoughts on “He’s still just not getting it, is he?”

  1. With the oil price stubbornly refusing to climb back to the good old days of $100+, I am half-hoping these dickheads meeting in Paris agree to some massive “Climate QE” programme which would hose billions of money at random engineering projects with little or no oversight. I can just see the scramble of recruitment agencies and the emails I’d be receiving right now: “Please state your desired day-rate…”

  2. I do like the way that Ritchie keeps changing the prefix for his sorta-kinda QE. It’s very Del boy- try hawking some old crap, discover it’s old crap that no one wants, rebrand and try again.

    Of course, the crowd around his stall has shrunk a bit, so I’m expecting the renaming to get ever more esoteric, whilst trying to piggy back on the headlines of the day.

    “Rebuild Syria QE” can be but a day or two away, followed by Rebuild Labour after Oldham Election QE” and finally “Christmas Edition of QI QE”.

  3. Ugh, it’s more basic than that. Whatever QE is doing here, diverting 1/6th at pet projects will mean it’s doing less of it than before.

    And the EIB will be spending it on projects that can’t justify themselves on merit, such as hosing down Tim N. (did I get that right?)

    So indianen would lose on both sides of the equation.

  4. I thought his “QE” was meant to stimulate the UK economy. Now he wants it to be invested in other economies? his plan is for the EU to give away 10bn euros a month extra to foreign countries?

  5. I’d go one further Tim and say “QE will, by default, reverse”.

    Ian B – as soon as they stop topping it up. Which is presumably once the deflationary risk is gone. Interestingly my firm is running a (paper) firedrill on negative US interest rates on all our systems today.

  6. somewhat cheeky of Murphy to call himself “professor”. This isn’t the US – in the UK and Europe that title is reserved for full professors, not mere lecturers.

  7. CD

    in the UK and Europe that title is reserved for full professors, not mere lecturers.

    Not any longer. In the UK, most universities will grant you the title of (associate) professor if your research/publications are thought to be of high quality. Oxford does, for example.

  8. John Square said:
    “It’s very Del boy- try hawking some old crap, discover it’s old crap that no one wants, rebrand and try again … “Christmas Edition of QI QE”.

    What about “I can’t believe it’s not QE”?

  9. He’s a professor of practice, which just means a professional in an area that does some lecturing and has nothing to do with research or publication.
    At least he’s avoided calling it QE2 so far which is a shame as the potential to wind him up by asking what it has to do with ships would be fun

  10. Printing money is also reversible. You can gather it up and burn it.
    You probably won’t, unless it’s become so low value that it’s worth more for the heat content, but you could. So it’s quite a lot like QE which is reversible in theory, but in practice it won’t happen.
    Not at all like share issues followed decades later by buy-backs which can and does happen.

  11. Speaking as Devil’s Advocate, there’s more chance of Glamorgan winning the county championship than QE being reversed. At least in my lifetime.

  12. It might seem unfashionable but I really hope that inflation does not take hold again. I would love a stable economic sitution to loast until I end my days. If that means the QE is not reveresed then…..too fucking bad.

  13. Tim Newman

    “With the oil price stubbornly refusing to climb back to the good old days of $100+, I am half-hoping these dickheads meeting in Paris agree to some massive “Climate QE” programme which would hose billions of money at random engineering projects with little or no oversight. ”

    Nice idea, but I can’t see one cent of that money making it as far as some actual engineers, it will all be hovered up by policy ‘experts’, PR types, lobbyists, pols etc. Everyone of them a passenger on the Golgafrinchan Ark Fleet Ship B

  14. So what’s wrong with printing money?Banks do it all the time.If the State were to do it, there would be enormous saving on the interest and borrowing costs (from the banks who don’t have the money to lend) and less of the newly created money would end up ramping up land price inflation through successive housing bubbles.

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