Little insight from HSBC's Chief Economist into how the BoE have supplied the low UK gilt rates that the government disingenuously describe as proof their austerity is working and that their policies have given confidence in the UK economy.
http://www.spectator.co.uk/article_a...%20on%20QE.pdf
Quote:
The financial system is increasingly
being rigged...
...via acts of financial repression...
...as governments look for new ways of
funding excessive debts
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No escape from QE and LTROs
The eurozone’s problems demonstrate how the interaction of governments and central banks has become key to understanding the increasing
dependence on “repressing” tactics, particularly within those nations that retain their own sovereign monetary authority.
For example, relative to Spain the UK has a higher ratio of government debt to GDP, a less aggressive austerity plan and a coalition government which
doesn’t always look like a marriage made in heaven yet it benefits from gilt yields down at a whisker over 2% while Spain’s yields threaten to pass through 6%.
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