Lots of commentary and opinion on the BoE QE day splash - Robert Peston and others have been rolling out Ricardian equivalence to question the benefits of the state bank buying government gilts (a guilt trip?) and corporate bonds.
I suppose that such assets do occupy the middle ground between two busted flushes - specifically income producing savings and equities but I find it hard to discern a benefit for the 'hard working families and businesses' for whom GB et al would claim it is in service of. Aside from continuing to milk annuities and kill off a viable pension income source, the gilts and bond market is hardly a friendly place for the individual investor.
I can see how such macro flows of money make the 'system' look better and may start to unblock the pipes at the micro level but where are the initiatives to unlock the money and entrepreneurialism of individuals? If the only financial product development of 2009 is a mattress to safely store your money then 2010 is going to be just as painful. The brand that will win in 2010 (both politically and commercially) will be the one that harnesses the individual motivation to create meaning and value for our own lives and feel that we are contributing to a collectively better world as a result - not one that treats us as 'needy' consumers looking for our next fix of credit.
While I can applaud the idea that the FSA is going to get its sleeves rolled up and 'mystery shop' banks to make sure they are not ripping off customers (and I assume not giving away credit to all and sundry), it can't only play bad cop in the market - it also needs to keep an open mind to the innovators who might be our own hope for breaking away from the victorian outdated investment structures which create such tensions and problems in the modern world.
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