Bond-Buying Spree: Wall Street 'Feasts' While Americans Lose

The holiday shopping season has kicked off in the U.S. and many retailers have even broken tradition by pushing their opening hours into Thanksgiving night, instead of waiting for the official start of Black Friday. Exactly five years ago the Federal reserve announced its own unprecedented shopping spree, but it's hardly been helping America's economy. RT's Marina Portnaya met one of those behind the experiment, who thinks it was a big mistake.

Quantitative Easing Explained

«Bernanke pumpt eine weitere Blase auf»
TAGES ANZEIGER: Der Chef des Bostoner Vermögensverwalters GMO, Jeremy Grantham, hält Aktien für überbewertet und warnt vor grossen Risiken am Bondmarkt.

Wenige Investoren haben in den vergangenen Jahren so viel Klarsicht bewiesen wie Jeremy Grantham. Der Gründer des Bostoner Vermögensverwalters GMO warnte vor 2007 wiederholt vor einem Kollaps am US-Immobilienmarkt und vor einem Börsencrash. Im März 2009, auf dem Höhepunkt der Marktpanik, empfahl er in einem Kundenbrief mit dem Titel «Reinvesting When Terrified» den Kauf von Aktien. Heute ist er skeptisch. Die Aktienmärkte seien als Folge der enorm expansiven Geldpolitik der US-Notenbank bereits überbewertet, während der Bondmarkt für Investoren «tödlich» sei – ein Riesendilemma für Anleger, sagt Grantham. Er rät zum Aufbau von Cashreserven. » | Von Mark Dittli, Finanz und Wirtschaft | Donnerstag, 14. April 2011

Inside Story: UK March for an Alternative
In an event dubbed the march for the alternative, hundreds of thousands gathered in London - protesting against the coalition's planned spending cuts - the largest cut-backs since the Great Depression. Organised by the Trade Union Congress, the protests remained largely peaceful. However events were overshadowed by violence that later erupted. But as Europe is still struggling to avoid another financial crisis, would such measures have any impact? And what are the social and political implications?
 Inside Story, with presenter Ghida Fakhry, discusses with: Jeremy Batstone-Carr, head of research at Charles Stanley stockbrokers; Max Keiser, financial analyst and renowned banking critic [Wiki] and Tom Clougherty, executive director of the Adam Smith Institute, a U.K.-based think tank dedicated to free market policies.

Sorry, Ma’am! It’s Time for Us to Accept the Euro
Successive governments, along with the Bank of England, have shown that they are quite incapeable of taking good care of our currency. They’re obviuosly unable to maintain its value. Now, it seems, that dear Merve doesn’t even hide the fact! He wants a weak currency in order to “rebalance the nation’s economy”. What the hell does “rebalance the nation’s economy” mean anyway? It means nothing! These people are just trying to baffle us! What a load of bulldust it is! If these people had balanced the nation’s economy in the first place, they wouldn’t have to try and rebalance it now!

And what’s all this nonsense about quantitative easing? That’s a euphemism for printing money. History tells us where that leads to! It leads to hyperinflation.

It seems to me that neither the government nor the Bank of England are serious about maintaining a stable and valuable pound. People at the top of the banking sector don’t need to care about the pound’s falling value. All they have to do is award themselves hefty bonuses to make up for the lost value of their savings and salaries. For less privileged folk, this is not, alas, a possibility. So, with the pound falling dramatically in value and interest rates remaining very low, and likely to do so for quite some time to come, the people who are becoming poorer and poorer are ordinary folk, i.e. people who do not work in banks! Therefore, perhaps sadly, it is time to get rid of the pound and place our currency into good, safe hands – into the hands of the European Central Bank (ECB).

I, for one, am looking forward to the day when we shall have a stable and desirable currency. The euro must surely be the currency of the future of all European nations. It must surely also be the currency for the future of the United Kingdom, too. So let’s adopt it before we’ll be forced to do so by circumstances beyond our control. By that time the pound sterling may have have become next to worthless. – © Mark

Sterling Slides After BoE Chief Mervyn King Backs a Weak Pound
THE TELEGRAPH: Sterling fell to its weakest against the euro in more than 5½ months, pressured after Bank of England Governor Mervyn King said a weak domestic currency was helping to rebalance the nation's economy.

The UK currency also hit a near 2½-month low versus the dollar, stung by Mr King's comment to a regional UK newspaper that sterling's fall "will be helpful" to rebalance the UK economy to one focused more on exports.

While the comments reiterated the central bank's long-held view on the currency and the economy, analysts said the market considered his remarks a good opportunity to wipe out sterling's gains made the previous day.

Sterling had rallied on Wednesday after minutes from the BoE's policy meeting earlier this month showed a unanimous vote not to extend quantitative easing in September.

Market participants said those gains had been overdone, and some analysts said that even though King's comments on Thursday did not offer new insight into the BoE's position on sterling, his statement helped to revive momentum to dump the pound.

"When the market's down on a currency, it will jump on anything that justifies selling it," said Stuart Bennett, currency strategist at Calyon in London.

"Sterling is certainly the whipping boy at the moment."

The euro climbed roughly 1.5pc on the day to 91.53p, its highest since early April. Daily trade volumes surged on the move, with the number of trades executed on the Reuters Dealing system hitting its highest in at least three months.

Thursday's move put the euro on course to posting its best daily performance against the pound since late April. >>> Reuters | Thursday, September 24, 2009

Bank Calls Unprecedented Meeting of Economists
THE TELEGRAPH: The Bank of England has summoned the City's leading economists to an unprecedented meeting in Threadneedle Street, as the pound plunges amid growing confusion over its radical Quantitative Easing (QE) policy.

The Bank will host a seminar of all London's major economists next Tuesday – the first time it has invited them in en masse in recent memory – in what has been construed as a sign that it fears market participants are starting to lose faith in its efforts to pump cash into the economy. The move has also sparked speculation that it is poised to announce a major change to the monetary policy framework, although insiders dismissed such suggestions.

It came after the minutes from the Bank's latest Monetary Policy Committee meeting revealed that the idea of cutting the interest rate banks are paid on the reserves they hold there was not discussed this month. The pound has lurched lower in recent weeks, thanks in part to speculation that the Bank will impose charges on banks for holding excessive amounts of cash in reserve at its vaults. Under QE, it is pumping £175bn into the economy, but much of this cash is sitting in banks' reserve accounts rather than being recycled and flowing around the broader economy.

The suspicion that the Bank will soon take action to mitigate this has pushed down market interest rates sharply and contributed to an almost 5pc fall in the pound against other leading currencies. It has caused gilt prices and short-term interest rates to fluctuate wildly in recent weeks. >>> Edmund Conway and Angela Monaghan | Wednesday, September 23, 2009

Quantitative easing >>>

It’s Time to Adopt the Euro >>> Mark Alexander | Saturday, September 19, 2009