The UK is in a liquidity trap – say no to more QE on planet ZIRP

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A further round of asset purchases merely oils the liquidity trap, digging a deeper hole, increasing the inflationary impact and reducing growth as investment plans are reigned back and household incomes are placed under greater strain. Sometimes the correct action is to do nothing, especially when it is more of the same toxic solution.
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Sunday Times and Croissants – CEO’s weekly update 9th October

John Ashcroft

Watching the Osborne speech, at times the Chancellor appeared to stare at the auto cue with a fair degree of incredulity. Such is the danger of auto cue when ideas can be added at the last minute, even the Chancellor appeared bemused by some of the material. This must have been the case with the idea of credit easing. This is a new idea which no one, including the Chancellor, knows anything about. The project appears to suggest SMEs will issue long term bonds with a low coupon, packaged into a series of CDOs, AAA rated by Standard and Poors, bought by the Treasury, sold to the Bank of England and placed off balance sheet in a structured investment vehicle backed by a RMBS (Rumours of Monetary Backing Somewhere) then written off over thirty years.
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Sunday Times and Croissants – CEO’s update 2nd October

John Ashcroft

The Labour attacks on government policy were so thin that Andrew Tyrie, the formidable Chairman of the Treasury Select committee decided to help out. Tyrie is unimpressed by the Big Society and the lack of a growth strategy, suggesting economic policy is inconsistent, incoherent, contradictory and at times irrelevant. Who would have thought? Tyrie has a point, why spend billions on a Libyan adventure and then try to save millions making 1000 sailors redundant?
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