Action Needed Now To Avoid Depression, Warns ITEM Economist
Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club said that quantitative easing is needed immediately
By Angela Monaghan and Edmund Conway
Last Updated: 9:56PM GMT 17 Jan 2009
The Government and the Bank of England have got "days not weeks" to take action to revive the economy or face a prolonged depression, one of the UK's leading economists has warned.
Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club said that quantitative easing, whereby the Bank of England would print money to buy assets such as corporate bonds and consumer loans, was needed now.
"My concern is that people don't fully understand the dangers lurking out there. The Bank of England needs to move towards quantitative easing immediately – you don't have to wait until you get to zero per cent interest rates. If someone is choking to death you don't think twice about giving them an emergency tracheotomy. There may be dangers, yes, but the alternative is that they die," he said.
[snip]
Sounds like Henry Paulson. Unless your house is on fire, it is prudent to distrust anyone who hustles desperate action based on urgency. It is the cardinal warning flag of a con artist at work.