Yes, but I can guarantee you, goverment could ask for the bank to do something. It still backed by us the tax payer.
Occupy London! Here we go again!
- Thread starter LateX'Dog
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Yes, but I can guarantee you, goverment could ask for the bank to do something. It still backed by us the tax payer.
When you buy something in mass(say 75 bil), it increases it's price. Once the demand stops, it falls back down.
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I dont have a mortage I couldnt afford the deposit on my own,
I can show you what industry Britain has and that is warehousing.
I drive past a few places that use to employ people now its just to let, to let, to let.
example
That was about 2 years ago. Same area that my biked got nicked outside a gym in the middle of the day 3 weeks ago.
Not jobs, no hope, no councils house but plenty of iPhone 4s
Now assuming you mean "manufacturing" industry then you're incorrect. Britain has a large manufacturing industry, in fact one of the top 10 in the world. In real terms the manufacturing industry has incresed steadily since WW2, only in relative terms has it fallen, ie manufacturing expansion has not kept pace with the expansion of the economy as a whole. Anyway what you are really talking about is heavy industry (steel works etc), that has fallen by the wayside massively as it is an unskilled low paid job that makes little profit (in the UK at least). Taking its place is much more higher skilled high tech manufacturing, unfortunately for the northern steel towns it needs far less employees and more skill.
EDIT: Actually I'm wrong there. Steel manufacturing has increased eightfold apparently in the last 40 years, just been streamlined massively. http://en.wikipedia.org/wiki/UK_manufacturing
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Yes, market value, which the government is then also selling into.
No they can't.
Not force but ask.
Yes the goverment will supply more, decreasing the price. The funds won't buy back instantly, usally wait until its finished QE, so demand falls down.
Anyway whats the point in creating money, for just to be poured back into goverment via bonds? Might as well just give to goverment.
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![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
It is an independant public organisation. I suggest you google it to find out more if you dont understand what that means - effectively it means regardless of who technically owns it, it acts on its own and not through the instruction of government.
Soldato
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[TW]Fox;20318455 said:
You don't have to fully understand something to see that the effects it has are bad.
They can ask, but the BoE will ignore them. They are independent, interest rates and QE are reviewed by the board of governors and are voted upon based on the state of the economy of the day.
Demand for government gilts has not fallen at all, indeed the rates our government are paying for them are some of the lowest in the world, because we're viewed as being one of the most secure and safest governments to invest in long term.
You do if you wish to campaign against something and offer alternatives.
Yes, because we are still buying them. When you buy something, espcially 75 bil worth its going to increase the price.
When QE ends, its going to decrease the price, at which point the pension funds buy more for the same money they sold them at.
When BOE shrink the money supply again, I don't think its the banks or funds loosing out
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Sorry I don't think you understand my point. Demand for UK gilts has gone through the roof, forcing the cost of them to the government down, not up.
When they shrink it, it'll cause deflationary pressure, that's good for the consumer. Also funds are owned by anyone and everyone so what's the problem?When BOE shrink the money supply again, I don't think its the banks or funds loosing out
When demand goes, price goes up.
Goverment buys bond from open markets at high price. 75 bil worth of bonds
being braught will also increase price for goverment.
Funds sell the bonds for the high price.
QE stops, demand goes down, price goes down.
Funds buy more bonds, for the same money sold at.
Goverment can issue bonds for cheaper, not buy them for cheaper.
I'm talking about how financial companies can abuse QE.
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Nope hedge funds are not for everyone. And managers get a lot of the gains, not investors through performance bonuses.
This isn't necessarily indicative of some conspiracy - believe it or not people working in finance come from diverse backgrounds and hold varied political views.
Warren Buffett supports higher taxes for the super rich why can't a trader support the occupy wall street protests?
Selling government debt works in completely the opposite way to what you think. When there is demand for government debt, it forces the cost down. The UK has some of the most in demand debt in the world because we're seen as being a safe haven for investment in relation to other governments debt. Compare us with Spain and Greece, the interest they pay on their soverign debt has sky rocketed because they need to pay more interest to generate enough demand from investors because of the risk they represent.
Because of the demand for our debt, we can offer it at much lower interest rates. More demand = lower cost!
Sorry but hedge funds are just another investment tool that pension funds use, albeit a higher risk one compared to goverment bonds.
I don't believe the previous poster specified 'Hedge Funds' and tbh... they're a bit more vairied from stat arb equity funds to CTAs etc.. Big traditional asset management places are big investors in bonds and they are, indeed, for everyone - my pension, your pension etc...
Your talking about creating new bonds, new cheap low interest bonds.
I'm talking about the BOE buying existing bonds, then selling existing bonds. Once
they exist, goverment has to comply with them. Can BOE disvolve existing bonds? Then sell new ones?
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Hedge funds are private investors, if the manager is wise he can sell bonds at a higher price, then buy them for cheaper using QE.
Yes, normal people can gain from this. But Fund (Pension, HEDGE, Mutual, whatever)managers get a lot of perfmance related bonuses. Thus mainly benfiting financial 'in' people.
Am i wrong here?
Banks also hold a lot of bonds(From what I hear on the news), thus can gain.
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