FT Alphaville reported last night (and because of the importance of the issue I quote extensively):
We know central banks have the power to support asset classes and to move markets, and do so frequently in the name of financial stability.
But are there other social threats that could be stabilised or mitigated by central banks in a similar way?
For example, should central bank monetary policy be charged with a green agenda? Should central banks take it upon themselves to encourage and support the formation of liquid environmentally-focused markets?
That's just one of the ‘unconventional' areas the BoE's One Bank Research agenda – revealed by the Bank on Wednesday – is keen to explore in a bid to stay ahead of fundamental change affecting the economy and financial stability in the market.
It was five years ago that Colin Hines and I created the idea of Green quantitative easing. It looks possible we may now get it.
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Sounds appealing and ony additional resources going into green energy or insulation of homes would be good. However, the financial world already has enormous influence with very little accountability: this would place unaccountable central banks even more at the centre of politics and crush the small vestige of democracy that is left even more.
It’s a massive stretch of the truth to suggest that Green QE is being considered by the BoE.
I’d go as far as to say it’s a lie.
Nowhere in their research agenda is it mentioned, and climate change is mentioned only in their “Response to fundamental change” section along with many other factors.
http://www.bankofengland.co.uk/research/Documents/onebank/summary.pdf
And I disagree
Unsurprisingly
Then show me where it is being discussed – it’s not mentioned in any of their papers or that FT article.
The BoE considering climate change is not the same thing as looking at Green QE.
That all said – I hope they do look at it and point out the gaping flaws in the hole thing. Namely that what you are suggesting isn’t QE, it’s monetarism. Printing money Zimbabwe style.
Just as QE is printing money. Don’t you understand money or QE? It rather looks that way
I see you are avoiding the question – did the BoE discuss “Green QE” or not.
I do understand QE – which is very distinct from what you are suggesting. Which is pure monetarism. I’m pretty sure from our previous debates (again, with you repeatedly failing to answer points) that you don’t.
I assume you will now resort to name-calling or deleting posts.
Richard Werner thinks this is QE
He inventd the term
Your document on green QE contains one of the best analyses of QE and its purported effects ; especially the comment that ” it has been an extremely underhand process, almost invisible to the public of the UK and unacceptable as a consequence.”
Will look at the link but can’t see how the proposal is other than public spending. The same argument for more infrastructure spending has been proposed elsewhere such as US and Germany, with the focus being on replacement rather than an environmental focus (to address crumbling infrastructure).
Not sure what adding QE to the label adds to your proposal (other than suggesting the scale). In particular QE had a focus of changing the risk curve for government securities (with stimulus effects a secondary concern) and a primary impact was to defray vast flows of surplus savings from EMs out into other asset classes. Green QE does not address this.
Also since your proposal the price of oil fall means a reconsideration would be necessary because many Green projects are significantly uneconomic.
QE creates new money
QE is money printing pure and simple. Just because the money is swapped for securities doesn’t make any difference.
Those securities could b ripped up rather than being kept on the government balance sheet.
And I’m still waiting for someone to sufficiently explain why it is perfectly OK to print money to bail out banks but not to benefit ordinary people.
Green QE is money printing to benefit us all