QE3?

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mulberryhawk
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The MPC consists of 9 members. Why should one members view or commentary be considered any more or less well informed than the other members?
Iron
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One can stand back in awe and admiration at the collective erudition of the MPC members, and say 'All of these guys know far more about economics than me. Who am I to criticise any or all of them? I'm just glad we have such brainy and educated people at the wheel of the ship.'

Alternatively, one can take a critical view of their decisions and opinions, whilst acknowledging that they know more than you and that you may well be wrong.

I prefer the latter approach...

Jeff
mulberryhawk wrote:The MPC consists of 9 members. Why should one members view or commentary be considered any more or less well informed than the other members?
mulberryhawk
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I was merely pointing out that Sentance was in the minority, and so why should his opinon carry any more weight than the rest of the other members of the committee.

8-1 majority is a pretty comprehensive majority in favour of the doves I would have thought.
Iron
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It is, but I'm always wary of consensus opinions, especially where group dynamics are involved. :)

If the B of E is like some of the companies I've worked for, the MPC will agree with Mervyn King whether they agree with him or not. It takes a strong character to challenge the leader of their organisation's cherished position...

Jeff
mulberryhawk wrote: 8-1 majority is a pretty comprehensive majority in favour of the doves I would have thought.
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superfrank
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i'm not saying that Sentance's view was more important than the others, just that he was the only dissenting voice (which made his position significant).

also Sentance took a position against the financial interest of himself and his peers (given that these are all relatively wealthy men who probably own a substantial amount of assets).

do you think we'd ever have a situation where Merv was the only hawk amongst 8 doves? no, me neither.
Iron
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Surely if these guys are very wealthy (which seems a reasonable assumption!), then they probably don't have a large mortgage to pay off, but do have savings that are making naff all interest. So wouldn't it be in their interests to raise interest rates?

Jeff
superfrank wrote: also Sentance took a position against the financial interest of himself and his peers (given that these are all relatively wealthy men who probably own a substantial amount of assets).
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superfrank
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Ferru123 wrote:Surely if these guys are very wealthy (which seems a reasonable assumption!), then they probably don't have a large mortgage to pay off, but do have savings that are making naff all interest. So wouldn't it be in their interests to raise interest rates?
no, they're not stupid enough to have money on deposit at banks! the BoE moved it's own pension funds into index-linked bonds before they started printing money (it's a fact, look it up).
i suspect that many of the MPC (like most rich people) have substantial property investments (which may or may not be financed by debt).
and you can bet your bottom dollar that most of them will have been in on the recent bull run in equities.
Iron
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Possibly, but if they are worthy of the term 'wise men', they would have steered clear of the property bubble! :)

Jeff
superfrank wrote: i suspect that many of the MPC (like most rich people) have substantial property investments (which may or may not be financed by debt).
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superfrank
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as Jim Royle would say, "wise men my arse!".
Iron
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Failed Fed Policies Prolong the Agony - by Ron Paul

http://thedailybell.com/3559/Ron-Paul-F ... -the-Agony

'The Fed policies of low interest rates, Operation Twist and rounds of quantitative easing are all attempts to keep the economy alive artificially. But the 12 FOMC participants cannot manage the economy any better than the bureaucrats of the Soviet Union. The policies haven't worked. They won't work. Real economic recovery cannot come until we liquidate the bad debt, until we eradicate the poor decisions we made over the last decade and start with a sound foundation. It is time we acknowledge the truth of the Fed's activities: They are merely using fancy words for price setting.'
mulberryhawk
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Sure while were at it , lets reintroduce the gold standard, that will solve everything........ :o
Iron
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And of course, that's the only logical alternative to printing money! :lol:

Jeff
mulberryhawk wrote:Sure while were at it , lets reintroduce the gold standard, that will solve everything........ :o
mulberryhawk
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Well its a bit of an extreme example I know, but I was channeling Ron Paul since u are using him to support your argument ;)
Iron
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Um, OK... :)

Jeff
mulberryhawk wrote:Well its a bit of an extreme example I know, but I was channeling Ron Paul since u are using him to support your argument ;)
Iron
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Nasseem Taleb, quoted in the Spectator (http://www.spectator.co.uk/coffeehouse/ ... sing.thtml):

‘“Quantitative Easing is a transfer of wealth from the poor to the rich,” he says, “It floods banks with money, which they use to pay themselves bonuses. The banks have money, and assets, so they can borrow easily. The poor guy, who is unemployed and can't borrow, is not going to benefit from it.” The QE process pushes asset prices up, he says, which is great for those who own stocks, shares and expensive houses. “But the state is subsidising the rich. It is the top 1 per cent who benefit from Quantitative Easing, not the 99 per cent.”’
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