Tag Archives: The Guardian

BN Magic money from the Bank of England

My hands are clammy, my heart is racing…yep, I’ve just read the Bank of England is cutting interest rates to 0.5 %.

Does anyone else feel the room closing around you when you read any news on the melting economy…we’re all doomed!

So what’s happened exactly?

First of all, the Bank of England cut interest rates by half a percentage point to a new historic low of 0.5% today.

Then…they decided to pump £75bn cash into the economy by buying up assets

So, tommorrow….the idea is that all this cash will be pumped into our pockets through lending and hand-outs.

The nuts and bolts of it is that the Bank of England is buying assets without issuing gilts thus increasing the quantity of hard cash in the economy

So what does this mean for the average jo and joe? Well, not much to be honest.

By flooding the banks with hard cash it should stimulate lending, however, considering their constant tightfistedness this is unlikely, but all that cash combined with historical low interest rates (since 1664) means that if the banks do decide to continue stashing all that money in their coffers there will be no benefits for them.

In so stimulating lending to me and you, and all those in between.

Funny thing though, with my basic understanding of economics I had always thought of the flooding of the economy with freshly printed bills was a very bad idea, I mean this is how inflation gets out of hand and economies are ruined as they are led down the road of hyperinflation eg Weimar, Argentina.

This quantitative easing that the Bank of England is doing is interesting but by no means is it a sure thing.

So, we know the how and the why, the when is a few months, immediate returns are unlikely.

Savers out there my advice is sit on your money for now, don’t hawk-eye your savings but  rather spend wisely to help unclog the economy, although interest rates are so low as to give you negligible returns on your savings, say this: whoever got anything for free? It’s not like the initial amount you put in is devaluing so stop worrying.

Rates on credit cards/loans will continue to rise, although they are not based on the central bank’s interest rate but rather the borrower’s risk which is emphatically increasing.

Mortgage rates have also been cut.

A good crystal ball is the US and their economy, they went into recession six months ahead of us and have already cut the central bank’s interest rate to 0.25 % as well as started quantitative easing.

What do the experts think? The Guardian (interest rate cut: blahhh, quantitative easing: positive outlook), Financial Times (all about gilts and bonds), Simon Ward (blog for the high brow), and from my favourite money person Martin Lewis (interest rate cuts for dummies).

Oh yeah and for the love of god do not support English jobs for English workers aka protectionism aka very, very bad for the economy, at least I know that much.

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Is the US media train ahead of the curve?

Good investigative journalism is hard to come by, more so for local and regional papers who do not have the time or resources to dig too far. And how many journalists know of local crooks out there but do not have the time, and sometimes the editorial backing, to just get the evidence?

A good piece of investigative journalism can make a career, look at David Leigh of The Guardian who uncovered the dirty dealings of British Arms giant BAE or Watergate’s Carl Bernstein and Bob Woodward (a.k.a Robert Redford and Dustin Hoffman, hehe).

I only mention Watergate because I am about to cross the Atlanticand ask the perpetual question –

Is American media more savvy than the UK’s?

Or in other words are they ahead of the curve and breathing fresh air into the newspaper industry more than in this country? I only ask because I am truly curious that the websites and news that have really grabbed my eye these past few months have been American ones…so what’s going on?

Well, first all with investigative journalism, the best pieces in the UK are found in traditional media usually through broadsheets or specialist magazines like The Internationalist/New Scientist/the Economist.

In the US though, the Huffington Post, a fantastic on-line news site (big fan, needs to be RSSd) has announced plans to raise money for investigative journalism projects (according to Robert Macmillan’s blog). Where the money will go, who knows but only three months til further news is announced.

Then there is the emergence of purely investigative sites like sharesleuth.com, bailoutsleuth.com, who reports on financial wrongdoings, and propublica.org which really adds some spice to online news, even if the news is a tad bit over my head.

The emergence of news integration sites, like the Huffington Post and thedailybeast.com, where they combine news pieces with blogs, video, podcasts and visuals, is a news addicts dream.

In the UK, well I suppose The Telegraph has just announced a 5-minute political show on its website offering comment and debate, The Telegraph has always been ahead of the curve, it does have a lot of money, a lot of which was used for the redevelopment of their newsroom not even a year ago and for the hiring of online marketing people and journalists.

I must say though that the BBC are probably the only prudent company looking at the future, they have good political commentary, still fund investigative journalism, have innovative news analysis pieces and are overall reliable with the financial backing to be risk-takers.

Maybe that’s the problem, could we be relying on the BBC too much? Taking up the mantle and leading the way through this dark labyrinth that is techno-land? We should shout no more, we should hasten and create the environment where we too can be innovative with our news, after all if we always follow the BBC’s lead on online creativeness then it will be them who will get the glory and highest web traffic.

We could also have endless talks about the free newspaper wars all over the world, but I won’t.

To put the finishing touches in this polemic, I find the US media coming out ahead, it is not a question of is it bad or good, or should we be jealous and start a riot, rather this is just an observation.

We must now candidly question: Why is the USA coming out ahead of the curve in new media?

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