THE SATURDAY ESSAY: the role of conservative madness in the markets

The Slog

hogarthtitleDon’t tell the boffins, but matter can be created after all. What’s more, doing so ensures that confidence will not be destroyed.  The Slog offers a Dummies’ guide to the mathematics  of conjuring something from nothing.

A couple of days ago, the Bank of England did nothing. I don’t mean that everyone turned up for work and played backgammon. I mean the Bank kept both the interest rate and QE programme level completely unchanged: the rate stayed at 0.5% (almost nothing in the first place) and the level at £375bn (untold riches to you and me, but the efficacy equivalent of trying to revive a dead rhino by fanning it with a stickleback).

So with everything at close to nothing, the Bank did nothing; and within 27 minutes, the FTSE had risen 0.1%.

A proposed future role for central banks

Extrapolate that market rise forward for a given day, and…

Δείτε την αρχική δημοσίευση 2.394 επιπλέον λέξεις