Billions of pounds of QE unlikely to cause inflation - IMF

Central banks can unleash billions of pounds more quantitative easing with little threat of stoking inflation, according to analysis by the International Monetary Fund

Work by economists at the Washington-based institution found the historic link between unemployment and inflation has weakened “over the past several decades” and that even a sharp fall in joblessness would not lead to spiralling price rises.

“Looking to the future, our analysis suggests that ongoing monetary accommodation is unlikely to have significant inflationary consequences, as long as inflation expectations remain anchored. In this regard, preserving central banks’ independence is key,” the IMF said in a pre-released chapter of next week’s World Economic Outlook.

“Indeed ... any temporary over-stimulation of the economy – perhaps stemming from misperception about the size of output gaps – is likely to have only small effects on inflation.”

The findings will be welcomed by the Chancellor, who is pinning his hopes for growth on the incoming Bank of England Governor Mark Carney. Mr Carney has indicated he is willing to take radical action to revive growth in the UK.

The Bank has already injected £375bn into the economy through QE, the largest monetary stimulus of any developed country as a proportion of GDP. Sir Mervyn King, the outgoing Governor, has called for another £25bn for the last two months – but has been outvoted by his fellow policymakers.

It also follows comments by IMF managing director Christine Lagarde over the weekend, when she described Japan's massive new money priting programme as "a welcome step". However, she warned there was "a limit to how effectively monetary policy can continue to shoulder the lion’s share of this effort".

Japan's currency fell Tuesday, struggling at four-year lows against the U.S. dollar as it extended its dive in the wake of fresh Japanese monetary stimulus.

The U.S. dollar (USDJPY) bought 99.40 yen in Asian trade, compared with Yen99.21 in North American trade late Monday.

What they are basically saying is that its OK to print shitloads of money, just so long as it only goes directly towards bailouts, if the money stays in the hands of a select few and doesn't get spent into the economy then there's no inflation.

A lot of inflation in Europe oddly enough has come on the back of taxation of fuel.

, as they steal people's bank deposits, and prepare to do the same on a wider scale elsewhere, on behalf on an institution that slavishly defends the central banks that run the system, which are privately owned, which feed all of their revenue into the Bank for International Settlements, which is privately owned, which acts as a central bank for central banks, even though it's nearly 90% owned by the central banks themselves!

It is beyond ridiculous.