That Worked Well...NOT! BofE QE Achieves Almost Nothing...No One Surprised, Except The People Operating The Presses

HT Adam Smith Institute...

The BoE claimed that the £200 billion it printed in 2009 onwards, resulted in the yields on five and ten years gilts being 100 basis points lower than they would otherwise have been.  It claimed that growth was boosted by between 1.5 and 2%.  On the basis of this, it enthusiastically decided to print another £75 billion this October.

Not so, says the highly authoritative (and not personally interested) Bank for International Settlements in its latest quarterly report.  The real effect was about a quarter of what the BoE claims.  Yields were on average 27 points lower.

The BIS also doesn’t agree with the BoE’s belief that new stimulus will have a similar effect.  “It may be harder to achieve the same degree of effectiveness as with the initial programmes once the surprise or novelty element wanes”, it states in its conclusion.  This basically means that financial movers realise that the money printing results in inflation, and that they therefore add that future inflation into their behaviour.

OldSouth 's Economic Epiphany: DaFed Undertakes QE Round 2

Epiphanies arrive uninvited, unexpected, and sometimes resemble a good ole-fashioned slap upside da head.

Today's WSJ coverage of DaFed's newest effort to save civilization was one of those moments. An epiphany.

The Federal Reserve is close to embarking on another round of monetary stimulus next week, against the backdrop of a weak economy and low inflation—and despite doubts about the wisdom and efficacy of the policy among economists and some of the Fed's own decision makers.

The skies opened, the angels sang, the sun peeked above the eastern horizon, bathing OS in the light of revealed wisdom:

Damn! So THAT's how it's done! (Sound of palm slapping forehead in amazement.) I just sit at my computer, and CREATE money to go buy stuff with! Silly me...