Effects of Quantitive Easing on......

This is a discussion on Effects of Quantitive Easing on...... within the Economic & Fundamental Analysis forums, part of the Methods category; The Aegon fund 'hedges back to sterling a minimum 80% of the fund', so I guess that gives them flexibility ...

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Old Feb 11, 2009, 7:13pm   #8
 
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The Aegon fund 'hedges back to sterling a minimum 80% of the fund', so I guess that gives them flexibility to take a small currency bet if they wish to.

The Baillie Gifford fund is sterling only, and Invesco hedge out all forex exposure.
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Old Feb 11, 2009, 7:15pm   #9
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1st question is government doing this for profit or the opposite?
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Old Feb 15, 2009, 10:20pm   #10
 
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Quantitative easing

I have run across a book "Credit Crunch" by Graham Turner (2007).
He worked in Japanese banking industry for abut 20 years. Japanese quantitative easing started in late 1990s, with the effects described in the book.
Can`t remeber the impact on corp bonds prices or yield, but i suggest to take an insight into Japanese bond prices indexes after japanese gov intervened.

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Old Mar 10, 2009, 6:22pm   #11
 
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Stephen King sums up the uncertainty nicely here:
Stephen King: The policy to print money is right but we must be told how it works - Stephen King, Business Comment - The Independent
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Old Mar 10, 2009, 8:21pm   #12
 
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Quote:
Originally Posted by everyonerich View Post
1st question is government doing this for profit or the opposite?
I read last week that they expect to lose about 150m from the 75bn input.
If you do the numbers this suggests that they will stay in until the gilts expire, i.e. the dividends will pay back most of the investment.
Not sure how inflation (or deflation) figures in that though. Perhaps they aren't either !
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Old Mar 12, 2009, 1:05pm   #13
 
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This is nothing more than pure CREDIT EXPANSION. The benefit is 0. In the longterm there will be another crash and another wave of credit to help pay for the ridiculous debt levels that we have. This debt needs serviced.

If you are already in debt how can you service it? Print more money in the ST?

Do we not need to rethink the fundamentals underlying our greed?
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Old Mar 12, 2009, 1:50pm   #14
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It's an expansion, but credit has massively contracted.

I heard rumours they may buy up corporate bonds, which would be good for them.

As to the infaltion question - I saw two economists completely divided and arguing with each other on that. It seems pretty clear to me that no one can say since no one knows who much money will be written off, and how much QE will take place.

I would say that IMO the hole created by the crunch/recession is already, and will turn out to be even bigger than all the mooted QE. I imagine they'll carry on QE-ing until they get some sort of effects. Unfortunately I don't see much clever lending being done in this climate. I think people still underestimate the scale, and inflation is a long way off.
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