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COVID-19

Discussion in 'General Chat' started by king karl, Feb 15, 2020.

  1. Dennis

    Dennis Captain
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    How could QE be used to fund Govt borrowing?
     
  2. trevor

    trevor Squad Player
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    By repaying Debt and saving billions in bond interest payments, Although direct to treasury coffers to pay expenditure direct as well

    From " Our Economy"
    There’s now a campaign for something called QE For the People. The basic idea is that instead of creating money to buy financial assets, central banks could invest it directly in public investment projects like building new schools or financing healthcare projects. It’s a pretty exciting idea,
     
    #5722 trevor, Jul 8, 2020
    Last edited: Jul 8, 2020
  3. Tony Wilkinson

    Tony Wilkinson Squad Player
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    Don't know how much but we have been quantitve easing constantly for years as far as I know which is inflationary....
     
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  4. Dennis

    Dennis Captain
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    If that's your belief, you don't understand what QE is. Have a look at what QE is on t'interweb.

    Here's a clue. QE is a monetary policy which stimulates demand in the economy by introducing liquidity into the banking sector, reducing interest rates and encouraging borrowing in the private sector. Unfortunately at the moment interest rates are so low that QE wouldn't work. The banks simply don't need the additional liquidity. It is not a means of either raising new debt or repaying existing debt. The Govt still has to raise debt or taxes to fund the additional expenditure. I'm sure that the Chancellor will tell us more on that score in the months to come.
     
  5. Bronco

    Bronco Star Player
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    Why would it be cut, I didnt head the chancellor mention he was doing away with the triple lock my OAP just helps out, now my final salary pension would be something else £££££.
    Always taught to put a little away for a rainy day, which I did now I'm quite happy with my income, the share scheme at my previous job was a fantastic scheme, couldn't lose, and my endowment mortgage was the best thing I ever did back in the 70s ;).
    I'm not sure what your on about "cash out on my pension", it was a final salary pension there was no annuity to buy so cashing out was never an option.
     
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  6. Dennis

    Dennis Captain
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    We have been doing it for about 10 years now. The BoE has bought back hundreds of billions of Govt bonds from banks over that time to stimulate the economy with some success. But it's been done to such an extent that interest rates have been pushed down to very low levels as savers will know too readily. And simultaneously asset values have increaed as investors in shares for example have realised -prior to the arrival of Covid19 of course. Yes, it certainly can be inflationary if there isn't sufficient productive capacity in the economy to meet the demand it stimulates but that hasn't been the case over this period.
     
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  7. Bronco

    Bronco Star Player
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    Had to smile when Sajid Javid said "low interest rates would not last forever", of course not but they wont be getting hicked in the next 10 years.
    Imagine the people who took mortgages of at very low interest rates having to pay 7/8% interest rates, it would be another finacial disaster on a par with the sub prime fiasco.
     
  8. Park bantam

    Park bantam Regular Starter
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    Sunak is doing a good job next PM?
     
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  9. Campbell's soup

    Campbell's soup Impact Sub
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    Pretty sure he ain’t gonna be that popular in a few months when he reveals how intends to recover the funds from the ‘sorry we killed thousands, here’s some free money’ giveaway.
     
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    #5729 Campbell's soup, Jul 8, 2020
    Last edited: Jul 8, 2020
  10. Fordy117

    Fordy117 Just call me Mr Flip-Flop!
    Bubbles car wash

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  11. Bronco

    Bronco Star Player
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    To be fair when Boris sacked Sajid Javid I was not sure about Rishi Sunak but he looked the part today, very assured at the Dispatch Box.
     
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  12. Park bantam

    Park bantam Regular Starter
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    Well he has a huge task ahead and I don’t envy it him
     
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  13. Bronco

    Bronco Star Player
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    He will get criticised what ever he does, the reduction in VAT will help, and the hospitality money will help generate restaurants bars and the likes, let's hope after last weekend we don't have a spike and second wave.
     
  14. Offside

    Offside Impact Sub

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    We've always got our gold reserves to fall back on , oop's forgot Gordon Clown sold them at a car boot sale .
     
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  15. Get Rid Of It

    Get Rid Of It Squad Player
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    When did boris sack sajid javid?
    News to me, and why did he get "sacked".
     
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  16. Bronco

    Bronco Star Player
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    He went in a cabinet reshuffle, resigned but we all know when that is quoted its only to save face.
     
  17. Hulmebantam

    Hulmebantam Squad Player
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    It is an interesting idea. Not without risks, but we are in new territory and an opportunity to do things differently.

    While QE has given the banks liquidity and helped to support businesses the main beneficiaries have been existing wealth holders. The rise in share prices, bond prices and property values is a testament to this. This has left vast swathes of the population untouched.

    What you are suggesting is different. Give money to people to spend it, on physical tangible products/activity and so stimulate economic activity. This is similar to the thinking behind a universal income.

    It wouldn't go down well, the markets would panic if they thought that the Government policy that helps sustain them were to be amended.

    It also links to Brexit. We HAVE to change our economy and move away from our dependence upon the service sector.
     
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  18. Dennis

    Dennis Captain
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    My own view is that the Chancellor will end the triple lock on pensions but for most people that shouldn't be a major issue.

    The more worrying one would be a change to the taxation of pensioners' total income. At the moment, there is no NI charged on pensioners incomes once they reach sate pension age. It's a bit of an anachronism these days when NI is really just another form of income tax. It wouldn't surprise me at all to see NI extended to cover those pensioners who are still working and don't pay pay NI. That's an easy gain and treats working pensioners just like any other person in employment. Of more concern for those with occupational pensions is whether the Chancellor would have the nerve and the courage to do what several earlier chancellors have considered but run away from and that's to apply NI (possibly at a reduced rate) to occupational pensions. Now that would put the cat among the pigeons!
     
  19. Bronco

    Bronco Star Player
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    I think you're correct with regards the triple lock it was never going to be a thing that continued.
    With regards in changing the tax system for pensioners they will have to make a carefully judgement, us oldies carry a lot of clout when it comes to General Elections and referendums and they will have to balance the potential backlash of any future measures they take with regards tax changes.
    Although low interest rates (which I can't see altering drastically for many years) are great for the young with mortgages and I'm all for it many OAP who have saved for there retirement have little return on their savings.
    We both took out a "65+ Guaranteed Growth Bond" when they were offered and although they are possibly as good as we'll get without risk the returns are hardly great.
    We are where we are @Dennis@Dennis we keep the wolf from the door ;).
     
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  20. MallorcaBantam

    MallorcaBantam Impact Sub

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    BALEARCS Masks to be worn virtually everywhere to stop spikes
    From the week end, of fine for not having one
    Could spoil your tan lines
     
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