UK engages QE for the Pound - Will the Euro follow suit?

[pmbug]

The debate continues on whether the US Fed Chairman Bernanke will release more quantitative easing (QE-3), other banks are removing doubts.

Wednesday, The Bank of England’s Monetary Policy Committee voted to add another £75-B of QE in order to support the weak UK economy. This is a Bullish sign for precious metals long term IMO.
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Now, the BOE is launching another round of quantitative easing (QE) worth £75-B, after discussing earlier this month to inject between £50 and 100 billion, the Monetary Policy Committee voted 9-0 for more QE. In September, only one MPC member wanted more QE, but now, all 9 members are in favor of more QE after citing a dramatic deterioration in the International outlook as a Key factor.

The move to put more QE into the economy is another example that central banks are willing to print more money in order to temporarily prop up the economy. Investors take refuge in Gold and Silver because this money printing devalues Fiat currencies.
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More: http://www.livetradingnews.com/bank-of-england-on-gold-and-silver-57496.htm

The race to the bottom has resumed.

 

[DSAbug]

Bullard has a couple comments on QE3 earlier today. Basically said that QE3 is on the table.

I just wish the Europeans could get their act together are start their printing presses.

 

[pmbug]

Be careful what you wish for!

I think Germany's experience with the Wiemar Republic still holds a deep cultural pall against using the printing presses for the Euro. It's pretty fascinating to watch them shoot down all the ESFS bailout proposals.

 

[DSAbug]

We will see what happens. A hard default puts the governments at risk so I still think they are going to do a form of QE.

 

[pmbug]

ECB buying Italian bonds now:

http://www.zerohedge.com/news/ecb-rescues-european-market-after-it-buys-italian-bonds-fourth-day-row

Where is the money coming from? Look for Euro QE or Fed swap lines tapped to be announced in the near future IMO. :shrug:

 

[pmbug]

...
I think Germany's experience with the Wiemar Republic still holds a deep cultural pall against using the printing presses for the Euro. ...

Germany making some noise about abandoning the Euro and reviving the Deutsche Mark?

http://www.zerohedge.com/news/its-b...he-marks-return-sets-eurdem-exchange-rate-195

This is what I meant. Germany holds the keys. They essentially will decide the fate of the Euro and I think they (the people, not necessarily the ruling class) would rather flush the Euro down the drain than mortgage their children's future to bail out the entire Eurozone.

 

[DSAbug]

Article says "no going back" doesn't it?

 

[DSAbug]

http://translate.google.com/transla...es-gibt-kein-zurueck-zur-d-mark/60118880.html

 

[pmbug]

Yeah. Found this too:

Late last week, there was a spike in random speculation that the German government was preparing to exit the eurozone—and that in fact, the Germans had gone so far as to print new Deutsche mark bills and mint new Deutsche mark coins.

Several alternative news sites, including Zero Hedge and others, gave serious credence to this rumor—enough credence that the euro took a hit against the dollar and gold.

But at the end of the day, it was just random speculation from one Dr. Philippa Malmgren, who was interviewed by a Swedish newspaper as saying “My impression is that the German Government sent us a number of signals that, from their perspective there is no other solution [than for them to leave the euro].”

This random speculation—coupled with last year’s random speculation from Hartgeld.com, a German fringe site that claimed with absolute certainty that on May 12, 2010, the Germans would for sure go back to the Deutsche mark, having already printed and minted the new bills and coins—gave the Malmgren nonsense some legs.

The fact of the rumor is no big deal—there are always rumors.

The fact that the financial community took such nonsense so seriously points to the big deal in this situation—the underlying worry that a lot of market participants are fearing: What if the Germans all of a sudden cry, “Fuckit!”, and let slip the bonds of the eurozone?

Can they leave the eurozone?

Sure they can—anything is possible. But is it likely that the Germans will leave the eurozone?

In a word, no—because they are a creditor nation.
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More: http://gonzalolira.blogspot.com/2011/10/germany-will-never-leave.html

Interesting read, but I believe the German people's appetite to cut their losses is much greater from a cultural perspective than most any other nation if given the choice between that or extending more credit to folks who can't pay, endless bailouts and (eventually) running the printing presses.

 

[pmbug]

...
BoE's Fisher said that the BoE will revisit QE once the current purchase is complete, adding that there is a significant chance of a double dip recession in the UK

http://www.zerohedge.com/news/daily-us-opening-news-and-market-re-cap-october-27

To infinity, and beyond!

 

[pmbug]

The Bank of England is poised to pump £50bn of fresh stimulus into the ailing economy in a bid to drive Britain out of recession.

The Bank’s Monetary Policy Committee (MPC) is expected to vote for more bond purchases through quantitative easing (QE) when it makes its monthly decision on Thursday.

It would take the total spent under the programme to £375bn.

Additional stimulus would come against a backdrop of a recession in Britain that is deeper than initially thought, a eurozone debt crisis which continues and falling inflation.

Michael Saunders, economist at Citigroup, said: “We expect the MPC will restart QE at the upcoming meeting, in reaction to the persistent weakness of the UK economy, easing inflation worries and ongoing European Monetary Union crisis.”
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More: http://www.telegraph.co.uk/finance/economics/9367178/MPC-expected-to-launch-50bn-QE.html