Cheap Parking – Money Hangs on a Word

ino.com
Bank of England ‘finely balanced’ over stimulus
May 23, 5:32AM EDT

The minutes to the last policy meeting at the Bank of England show that only one of the nine members of the rate-setting committee voted for more economic stimulus. However, the minutes, published Wednesday, show that several members thought the decision was finely balanced. For the second month running, David Miles was the only member voting to expand the 325 billion pounds ($510 billion) program of asset purchases, known as quantitative easing. The U.K. economy has fallen back into recession, and on Tuesday the International Monetary Fund said Britain should consider additional stimulus measures. All nine members voted to keep the Bank’s base rate at the all-time low of 0.5 percent.

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AP
11:48PM BST 16 May 2012

Minutes of the central bank’s April 24-25 meeting stated that “several members” thought additional Fed support could be needed if the recovery lost momentum or if the risks to the economy became great enough.

The minutes did not spell out what circumstances would trigger further Fed efforts to lower interest rates to boost the economy. But they did note some threats to the US economy. One is Europe’s debt crisis. Another is the risk that spending cuts and tax increases that could take effect at year’s end if Congress can’t reach a budget agreement could slow growth more than expected.

The comments stood in contrast to the previous minutes, which said that only “a couple” of members expressed support for further bond purchases. Since the financial crisis, the Fed has pursued two rounds of bond purchases to try to push down long-term interest rates, with a goal of encouraging borrowing and spending.

Private economists said the change in wording to “several” from “a couple” raised the possibility of further Fed action. But analysts said they still think no further moves will occur unless Europe’s crisis worsens or a budget impasse in Congress threatens the US economy.

“Nothing in the minutes changes our view on policy,” said Sal Guatieri, senior economist at BMO Capital Markets.

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May 23, 2012, 2:16 p.m. EDT
Gold sinks 1.8% as Greece worries lift dollar
Palladium futures lead metals’ declines, down 4%
http://www.marketwatch.com/column/metals%20stocks

Metals prices showed little reaction to U.S. economic data released early Wednesday. Sales of new U.S. houses rose 3.3% in April to an annual rate of 343,000. March’s sales rate was revised up to 332,000.

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The concept of a single word change, from ‘a couple to several’ members, decides the monetary fate of nations. I remember that debate with my Mom, between a couple and several. That was what we were allowed out of the cookie jar, a couple, and that did not mean several. I plead ‘a few’. Few sounded reserved, and she would retort with ‘not one more.’

So I note the mirrored announcements between the Fed and the Bank of England. A majority prefers to let prices deflate a little while longer. The third article sums up the announcement of an increase in the largest consumer asset/liability class, real estate. What to glean? Cash is more valuable than inventory. Production can shop for cheaper supplies and attempt to gear up. Once supplies are in process, money printing can inflate values for next spring’s orders. Over the summer, workers can be hired for less. I’m looking printing, logic says around Sept., or dog day in August when people aren’t thinking about the news, but it could happen at any time. Greece is scheduled event now and July 1st has been glowing like a cosmic ingot since Feb last. This is the poker game of finance. People should be really itching for a raise by October, before the US election, if they don’t get one sooner. Click Little Miss Liberty to follow this monetary research for a new story in real time. More background? The power paradigm.

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