Re: Re: The debasement of the Dollar and the Pound – perpetual Q

#113152
Chopera
Participant

QE in the UK was mainly about propping up asset prices – both the FTSE and house prices were tanking before the BoE started buying gilts. The pound was “debased” by the Forex markets because people assumed that all or at least some of the printed money would end up in the UK’s economy, but so far it hasn’t and the pound has crept back up a bit. The problem with QE is it is government interference in markets (even though the situation was so dire that the government did have to interfere) but now we have a situation whereby asset prices are based on speculation around government actions rather than whether there is any genuine market demand for them. This is unsustainable. The can has been kicked down the road (which was an achievement in itself considering the situation at the time) but the problem has not been fixed.