The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Wednesday, September 29, 2010

Bank of England likely to stow-away on the QE2 ship

Judging by BoE MPC external member Adam Posen's remarks, the UK central bank will be jumping abard on the Fed's QE2 ship. That means lower long-term rates in the US and UK, and more global stimulus, which arguably only increases the upside risks for Australia:

"The risks that I believe we face now are the far more serious ones of sustained low growth turning into a self-fulfilling prophecy, and/or inducing a political reaction that could undermine our long-run stability and prosperity...

The case for doing more is about activism for sustaining a period of recovery from a low point, thereby preventing us from getting stuck in a long-term trap. The challenge for monetary policy today is not about fine-tuning developments in prices and output...

The data seems to me pretty conclusive, in the sense that if it was going to be a recovery that either was inflationary, or consistent with high interest rates and credit growth, to overcome the usual pattern of post-financial crisis stagnation, it would have been evident by now."