Accountancy firm backs call for Bank action as economy freezes

The fact that even one of the top accountacy firms does n't have a clue of what is needed to stimulate our moribund economy is yet another example of the fact that it is a futile excercise to look to those that are supposed to know what to do is a complete waste of time. The BOE can pump as much liquidity into the system as it likes, it will make absolutely no difference whatsoever. It will make more money for the likes of PIMCO who are only too happy to see any more fuel added to an already overheated bond market. The answer is obvious -reduce tier-one capital requirements for the banks to more reasonable levels and stop ill - researched political interference in the financial sector. Time for the politicos to move on to something more worthy of their intellectual prowess such as immigration or asylum seekers and how we are going to reducing the funding requirement for public sector pensions.

Well I wonder why BDO would like more funny money from the not very funny comedians at the Bank of (forgeries) England. Where turning out funny money is King and Mr Bean’s Teddy is Deputy Governor, so really what can you expect.

Quantitative easing is just for fools, who really cannot understand even the fundamental economic principals. It is built on nothing and it will collapse easier than a house of cards. But let’s be in no doubt that some people will benefit from this, but it will not be the economy or the British people.

My understanding of the distributive effect of quantitative easing is somewhat different from the author's

Mr Lumsden states that the BoE "bought back" Govt. Bonds? I presume he means the the BoE bought previously issued bonds and cancelled them. If so from whom?

What I think happened was that the BoE pumped money into the clearing banks with strict instructions that they were to use the money to buy tranches of new Govt. debt as and when they were issued. The reason being that if they did not there would be no other takers.

The major banks got their cake and ate it so to speak. They didn't have to use their own cash to buy the bonds, but now that they have them, they can demand regular coupons until maturity.

This enabled the banks to rebuild their balance sheets and got the Govt. off the hook. Until the next time. That next time is coming omenously close, and with the market for bonds in an even more parlous state, it looks like the BoE is going to have to pull the rabbit out of the hat one more time.

The only way quantitative easing has stimulated growth is by devalueing the currency. So in real terms we are still not getting anywhere, just turning the treadmill that bit faster.

well said Mr Tonks I agree with everything you say. Printing money is the road to ruin.

I think more QE is just a recipe for people like Philip Green and his ilk to engage in yet more A&M activity, at a few £billion a deal. That's where all the money goes - and up to 3% commission to the banks, of course. There's not much left over for taxpayer who might need a mortgage or some other reasonable loan service. When you look at things dispassionately, Hector Sants latest ill-thought through idea which, it has been shown, will effectively shut down most mortgage lending, then just allows more money to be available for the banks to chuck it around in A&M deals. I guess they feel they need it now, with oil rich Arabs from Qatar et al coming along to buy up whatever remaining bits of the UK's business base is still profitable. These big accountancy mouths should do something useful, like work out how much money is washing around in A&M deals and how much it is costing the nation in interest payments. Ultimately, it's always the customer who pays the interest, in higher prices charged for goods and services. Come on, Peter Hemington, I challenge you to work it out and let us know. Good man!