Thursday, October 06, 2011

Bank Of England Throws UK Savers Under The Bus

Take note of today's comments from the Governor of the Bank of England.  He does not disguise the fact that quantitative easing - using artificially created money as credit to purchase sovereign debt - is inflationary.  He openly admits that this pro-inflationary policy will hurt savers on fixed incomes and that hurting them is necessary to avoid a new recession. 

The Bank of England has declared war on the most vulnerable people in British society to delay the inevitable destruction of financial asset valuations.  The best we can say is that the BOE is more forthright than the Fed about its true intentions.  The U.S. dollar and pound sterling will soon be in a race to the bottom, right after the euro implodes of course.  If the BOE has to throw savers under the bus, it should at least be a London double-decker bus.  God save the Queen. 

Full disclosure:  No position in the U.K. pound or any derivative thereof at this time.