This has been brewing for a while – but I doubt any politician will be brave enough to point it out. Unemployment is much much lower than you would expect given the depth of this recession. Now, like Chris, you may wonder if there is a lot of hidden unemployment, but even on his figures, the ‘discouraged’ workers are back at levels of March 97 – which was a growth year, the fifth in a row. Basically, employment figures are back where they were when Labour came to power – it could be much worse.
And no doubt will be, when the public sector cull gets underway.
The debate about QE and interest rates policy is definitely hotting up. Ambrose Evans-Pritchard on how it hurts German insurance companies. Duncan’s solution – using the money for a National Investment Company. A man called Cheeseman agrees with Duncan that the effect it has had on the economy is not what it says on the tin - ‘boosting spending’. The Bank are now very bullish – or is that just Paul Fisher interviewed in the FT (they all sound so different on this one). And anyone with a brain ought to realise the foolishness of David Cameron’s dogmatic position.Nils Pratley asks if Mervyn will slap him down. Whose independence is being threatened, exactly? The Bank’s to operate monetary policy – or the Government’s to use fiscal policy?
Krishna Gua is not the first to ask why the FOMC is sounding hawkish when we are clearly a long way from hitting economic capacity in the States. And I want to ask how much of the enormous profits of Goldman Sachs come directly from this policy.
If what we need is more monetary looseness, I’m not encouraged by the news that the MPC is visiting Scotland. Sell stocks, now.