QE2 and deleveraging Watch

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Markleberry
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#1
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So I just saw a very interesting comment here and I'm wondering what you lot think of it.

I myself would be too worried about perverse incentives, so I wouldn't go so far, and I certainly don't agree with writing down mortgage debt right now (maybe in a double-dip) but using it to bring down interest rates seems fine by me.

Discuss.
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Quady
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Why would any bank want to do that?

Especially publicly owned ones which would face a multi billion write down

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Markleberry
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(Original post by Quady)
Why would any bank want to do that?

Especially publicly owned ones which would face a multi billion write down

I was focusing more on the fact that the QE spending could be used to create a personal debt holiday without any damage to the private banks, not the idiocy about writing it off.
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creak
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But doesn't Osborne's whole growth strategy (as much as you can call it that) rely on the public taking on ever-increasing amounts of debt?

http://krugman.blogs.nytimes.com/201...gman&seid=auto
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D.R.E
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In 2011, it still surprises me that people pay attention to anything Ed Balls and particularly Paul Krugman have to say.
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turn and fall
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Good lord the comments and posts are just ridiculous.

All of them centre around the idea of getting the economy going. NO. We need to let the economy recover. If I hear another politician/academic talk about how to

KICK START THE ECONOMY

I am going to throw something at them.


The economy is not a car.
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MagicNMedicine
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(Original post by creak)
But doesn't Osborne's whole growth strategy (as much as you can call it that) rely on the public taking on ever-increasing amounts of debt?

http://krugman.blogs.nytimes.com/201...gman&seid=auto
Yes and this is why you will notice Osborne and the Tories have gone quiet on the issue of "Britain being the most indebted society..." which was a big theme of theirs during 2009 and 2010. They were constantly saying that Labour had made Britain a nation of borrowers, in fact I remember Cameron saying in the 2009 Tory Party Conference that he wanted a Tory government to make Britain a nation "built on saving not borrowing".

What the OBR has now told them is that as part of their strategy for reducing government debt, we will see a huge increase in household debt - of course this may be easier to sell later on as they can attack households for 'reckless borrowing'.

But have no doubt about this - Britain's households will be far more indebted after 5 years of Tory government than they were under the Labour government, and Osborne knows this, which is why they have stopped criticising Labour for it.
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Aphotic Cosmos
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Sorry, we don't own the QE2 any more.

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Tawheed
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QE2
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RichPiana
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(Original post by Tawheed)
QE2
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