Recent speeches from number eleven include back from the brink of bankruptcy, the march of the makers, ahead of the curve, offering a safe haven, on a rock of stability, masters of our own destiny,
executing plans designed in tough times for tough times, acting first like a tug of war team pulling in the same direction, then like a football team, playing in the right position. We will not win anything if we all charge ahead in the same direction, we would just let in goals at the back. Excellent.
Headlines, from the Sunday Times, Gordon Brown believed the financial crisis would be over in six months, the Governor, the lender of last resort, did not really want to bail out the banks (moral hazard) and Fred Goodwin brought panettone to the Chancellor as a quid pro quo for the bail out. Now there is a deal maker.
In the UK economics news was light on the ground, the GDP figures were unchanged, the migration figures confirm things are bad, the Poles have stopped coming to the UK. Martin Weale, new man on the MPC has called for a further round of QE just as Bernanke eschews a further round in the USA. Actually the Bank of England prefers the term asset purchases to QE. What does it achieve? Asset purchases inject liquidity into the banking system, forcing up asset prices and pushing yields down. But what else?
