LONDON (MarketWatch) -- The Bank of England's Monetary Policy Committee on Thursday unexpectedly boosted its asset-purchase program by 50 billion pounds ($84 billion) to a total of 175 billion pounds. Economists had expected the committee to either pause the program or boost it by a more modest 25 billion pounds. As expected, the committee left the bank's key lending rate unchanged at a record low of 0.5% http://www.marketwatch.com/story/boe-boosts-bond-buying-plan-by-50-bln-pounds-2009-08-06 How desperate is BOE to revive the economy ?
Redeker pounding the table http://www.bloomberg.com/avp/avp.ht...//media2.bloomberg.com/cache/vKbaJiSaPvLk.asf
They're just buying protection... Like Goodhart said yest in an interview yesterday, QE is easy to stop and the economy is weak so the insurance value of increasing the program outweighs the potential costs of overdoing it.
Absolutely irrational. Does not account for: a) The lack of "common sense" behind creating money out of thin air. b) Possible systemic effects that are wide-ranging, long-term and difficult to decipher. c) The raging inequity of printing money. d) Pushing the cost of saving lower and forcing more money into speculative and junk investments and increased risk as well as consumption.
I wasn't expressing my opinion of their actions. I was just trying to summarize the likely logic behind their decision.