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Golden Dollar

Disarmed austerity

MADRID | By Luis Arroyo | Since Quantitative Easing programmes began, the dollar has been strengthened, that is, its price has gone up against the most used currencies in the international markets.


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The Ying and Yang of Economic Policy

By David Denton | The Richter Scale  The UK QE has merely allowed the banks to off load UK government debt and replace this with other government debt, helping to keep bond prices high but having no impact on the real economy, other than to keep interest rates artificially low.


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British inflation draws a faltering economy

LONDON | Since the consumer price index began to record UK’s month on month inflation back in 1996, the downturn experienced in the clothing and footwear section from May to June this year has doubled the next largest decrease. The data, released Tuesday by the Office for National Statistics, brought inflation from 2.8 percent to 2.4 percent, while the retail price index fell, too, from 3.1 percent to 2.8 percent….


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A euro devaluation against sterling is on the cards, HiFX reports

LONDON | As the markets are rocked by France’s presidential elections and attention continues to linger on Spain, where official figures announced that it is once again in recession, currency specialists HiFX reported on Monday a 175% increase in euro sales. The move could benefit euro country members’ exports to the United Kingdom but it would hurt the British economy, as 40% of foreign sales go to the European Monetary…


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Equities don’t like it when Quantitative Easing ends, warns Morgan Stanley

From a Morgan Stanley research note, a cautionary tale on what happens when the US Federal Reserve’s Quantitative Easing tap is closed and, more globally, when central banks stop supporting currently struggling economies in the developed countries. Analysts describe QE termination as one of the main risks of the next stage in the cycle… in Europe, too. “Our analysis of European equities around the first hike by the Fed historically…


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Switch on the sterling pound printers, Schroders advises Number 10

LONDON | Although under threats of a possible sovereign debt rating downgrade, the UK’s government showed how to take advantage of the little margin for manoeuvre available when presenting the 2012 budget. Some pro-business measures would boost growth, said investing management firm Schroders, but they will not be enough to avoid a return to the Bank of England’s monetary expansion programme. Schroders released its viewpoint over the coming months and pointed…


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When it comes to money, one can get really FED up

By Juan Pedro Marín Arrese, in Madrid | Markets around the world are flooded with huge loads of fresh cash pumped in by central banks. The balance sheets of central banks have tripled since 2008. And yet monetary supply is lagging behind. Don’t put the blame on banks. Their assets are shrinking as a result of the massive reshuffle in credit exposure undertaken by enterprises and individuals. A grim outlook is…


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Who will untie the knot of the Quantitative Easing cash line?

LONDON | Even those who in principle appear at ease before the Bank of England’s new printing money operation have had but an apathetic attitude. The bank’s Monetary Policy Committee voted this week to increase the size of its asset purchase programme, financed via issuance of central bank reserves, by £50 billion –to a grand yet still temporary total of £325 billion– and friends, and foes, saw it coming without quite seeing…


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The Fed's twist in the words of JP Morgan

JP Morgan expects that US Federal Reserve will announce that it is to auction between $300bn and $400bn in Treasuries with one to three years to reach maturity, and that it will concentrate 70% of its purchases on seven to 12 year-maturity securities while the other 30% will be on longer maturities. The bank believes that the Fed will carry out these acquisitions within the next 6 months. “The benefit…


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The Fed’s twist in the words of JP Morgan

JP Morgan expects that US Federal Reserve will announce that it is to auction between $300bn and $400bn in Treasuries with one to three years to reach maturity, and that it will concentrate 70% of its purchases on seven to 12 year-maturity securities while the other 30% will be on longer maturities. The bank believes that the Fed will carry out these acquisitions within the next 6 months. “The benefit…