Quantitative Easing
Printing money, which is what QA is, although now it is done with electronic money, is a risky process which can lead to chronic currency devaluation. So far people feel it has worked. There are signs to watch, however. Inflation has jumped up dramatically and may have to be brought under control with a rise in interest rates. The other point is that the Government, through the bank of England, has been buying its own bonds. Now it is out of the market we shall get a better feel of sentiment among institutional and overseas investors to whom, normally, we look to buy Gilts. This is when the downgrade spectre begins to take form.
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Be sure I´ll be back. Found this great blog by searching for buying currency
I really don’t understand what people mean when they talk about a “bubble” in the bond market. Bonds aren’t tulip bulbs. Why not just say that interest rates are pretty low right now, and it seems that interest rates are more likely to rise than to fall in the near to intermediate term? “Just check the duration. That’s a technical term that’s the best measure of a bond’s inflation and interest-rate risk.”
The key to successful long term investing is not is predicting the bubbles, but in creating a reasonable long term asset allocation