Impact of Quantitative Easing on Investment Markets

Impact of Quantitative Easing on Investment Markets A simple definition of Quantitative Easing (QE) is central bank issues money to other banks, the discharge by central bank of adequate funds to encourage activity in a banking system that has become slothful and produce an upgrading in the economy. This sometimes means printing money in order to provide banks more capital (Financial times dictionary, 2009). The first remarkable handling of QE was by the bank of Japan in the early 2000s and similar plans were used again in 2008 by the Federal Reserve to deal with the United States. QE is using to increase the money supply significantly only seen when interest rates have been already reduced to zero and when the government is still trying to stop credit crunch condition. Lower interest rates encourage people to spend, not to save but when interest rates can go no lower, a central bank only choice is to pump money into the economy directly. Printing money can be defined as the central bank financing of government debts this is caused in both 1920s Germany and Zimbabwe and the British government insist it is not doing, even though the short term achieve is similar. But the banks believe this form of QE is altered because its a high risk strategy like old fashioned money printing, pumping too much money into the economy and causing high price rises, as seen in 1920s Weimar Germany and modern day Zimbabwe. For example if QE works, credit growth will pack up and business will find it easier to get credit that, in turn should help to motivate the economy (BBC news channel, QE, 2009). Abstract My whole research report will explain QE and its impact investors worry about the economy. In literature i have chosen three author who spoke about the investors and they are thinking about to invest in safe place like profitable markets and fearing about the deflation and inflation. In my methodology I have chosen to find out the reasons how to approach these thinks and what type of methodology need to put in practice I took face to face interview, population survey and focus groups to find out the answered. I used some systematic data like data gathering, data analysis and resource what i used in my research report. Title Impact of Quantitative Easing on investment markets Research Question How the Quantitative Easing is affecting investors, but getting the response for research question, needs to raise the other question such as how the investors worry about the deflation and inflation. Literature Review Many authors commented on QE effecting investors in different way but these three authors says about impact of QE on investment. Denise Law, 2009 said investors are pour money into gold markets, Paul Amery, 2009 told that same thing investors are trying to invest money into gold and silver markets and Jams Pexton, 2009 said that investors are looking for the safe way to invest before they invest the money into market they will look at the deflation and inflation. These three authors said same thing about investor QE and its impact on UK economy. Denise Law, 2009 state that investors are looking for a safe place are turning to gold because of UK economy. But professional says there are no signs the strong feeling will end soon, investors are notice that get higher in gold prices as reflection of external factors such as inflationary worries rather than of supply and require essentials. The bell run gold prices follow a survey that was released earlier, which exposed that investors are showing more interest to put money into gold markets. The survey shows a general gift towards more stability particularly amid fears that the Bank of Englands QE programme will shows active inflation. However investors consider that the gold prices will persist to rise, continued by increasing investors enthusiasm for an asset class that is often shows its ability to perform well in times economic uncertainty in the UK. Suki Cooper an economist at Barclays said in many respects gold has proved its value with in UK portfolio at the end of last ye ar when prices were falling across asset classes but gold prices did not fall and it allowed some investors to take profit and meet margin calls Paul Amery, 2009 said that the suggestion of QE for corporate debt are a less clear, while central bank afraid in the countries would like to move forwards the credit spread between corporate and government bond yield lower, the scope for straight interference in the corporate bond markets is more limited. While Bank of England has particularly authorised such a move under its QE agenda the effect remain to be seen. One instant outcome of QE broadcast has been to push the currencies of all the countries implicated sharply lower. But some commentators have said that QE can allow competitive economy devaluation against your neighbours something incidentally, that there are certain to be discussions on this subject at G20 event beginning in London, though whether these will lead to any statements on economy policy remain to be seen. In any case investors with foreign currency publicity in a country committing to QE may wish to avoid losses. The clearest follow-on effect of Quantitative easing policies is likely to be seen in the government debt and currency markets. Government may well manage to dowel or restrict bond yields for a continued period. At the same time they are increasing the risk of currency depression, and they are possible to increase currency instability. Gold and silver investment stipulates is likely to stay strong while such policies continue. And the result on equities is uncertain, as its unsure whether QE policies will renew the expansion on which divide prices depend. James Pexton, 2009 said investors are getting worry about the economy deflation and inflation. It is too early to say whether the serious move towards QE will be successful, but its immediate contact appears to be inadequate. We imagine deflationary concerns to persist to overlook in 2009, but consider that accelerating inflation is likely to be a effective warning from 2010on wards. Deflation means value of economy fall down, deflation is a rare happening and once well-established, it becomes very complicated to get growth in an economic recovery. Therefore Central Banks are fearful of deflation, we guess Central Banks to fault on the side of doing too much and to carry on to enlarge programmes that speed up growth of the money deliver. Inflation means economy having certain value at present Inflation is a feasible option when the public debt stock is denominated in the nations own currency and mainly supposed in nature. Speedy inflation erodes the genuine value of any nominal liabi lities and redistributes from the creditors to the borrowers, with the state frequently being one of the main beneficiaries. Whether an inflationary outcome is the outcome of a policy mistake or an intentional policy, we strongly believe it is worth thinking not only about the investment implications of near term deflation but also the risk significantly. Methodology The life of this planned study is investigative, rather than helpful, as not much literature has been shown on the subject of Quantitative Easing is affecting investors. This type of research will implement a stranded theory move towards developed by. According to them, stranded theory is the finding of theory from data and that is analytically obtained from research. The theory developed is imitative from data and then illustrated by the quality (Springer Netherlands, 1998) A permutation of data collection method of face to face interview, population and focus groups will be used in the planned research. The face to face interview is a unstructured interview and comfortable type of interview meant to investigate in a general topic to be discussed and with face to face interview have benefit of being able to observe and record verbal and non verbal behaviour, however this interview can be conducted by phone or online and online interview offer the chance to conduct more interview within the same time. These approach also save the travel expenses and time. This interview will be conducted without any list of questions, even though clear supreme areas to search require to be recognized prior to the interview. In such data collection method, interviewee is given the chance to talk liberally about QE and its impact on UK economy (Cooper and Schindler, 2007, pg-204 to 207) Population is the total collection of elements about which we wish to make some suggestion. A population is part of sampling the basic idea of sampling is that by selecting some of the elements in a population, we may draw the conclusion about the entire population. Most of the investors are choose samplings because it shows the cost, availability of population, accuracy of result and speed of data collection. For example the economic advantage of taking a sample rather than a sample is massive. Consider the cost of taking a poll. In 2000 due to a supreme court ruling requiring a poll even though statistical sampling techniques, the UK bureau of the poll increased its 2000 decennial poll budget estimate by  £1,723 billion, to  £4,512 billion. In any wonder that investors in all types of firms askà ¢Ã¢â€š ¬?why should we spend thousands of pounds interviewing all 4,000 employee in our company (Cooper and Schindler, 2007, pg-402 to 405) Focus groups became widely used in research during the 1980s and are used for increasingly various research applications today. A focus group is group of people, led by an educated diplomat, who meet 90 minutes to 2 hours. The facilitator or moderator uses group dynamics ethics to focus or guide in a swap of ideas, feeling and experiences on a exact topic (Cooper and Schindler, 2007, pg-146) Data collection Methods The research says the beginning of face to face interview with Ian Hally Director of the British insurance group Aviva Plc told in interview many investors are willing to invest in Asian property markets because next two years and is looking to improve the regions share of its asset to 25% over the next 5 to 10 years. Aviva investors sees a healing in Asian property markets on real estate investment a lot of the markets across Asia investment chances are going to be attractive in 2010 and 2011. In interview with Ian hally was good because I havent prepared any questions but I have clear idea of areas to be enclosed in the discussion. The interview estimated to half an hour to 45 minutes but he has give enough time to discuss and he spoke to me with friendly nature however the conversation was good and got clear idea of investors behaviour (Eriko Amaha, 2009) The survey conducted by the Nick Clark, 2009 Managing Director of the property investor show. Many of the investors are looking for safe place to invest before like real estate, gold and groceries but according to new survey the investor confidence in the UK and overseas property market has risen considerably in the last three months. Because the increase in confidence and changed desire in UK and overseas property has been signalled by reports that UK property prices have stabilized and the first signs of enduring job rises being reported. There has also been a strong move in the market with confidence UK investors commencement to re-explore overseas opportunities as they survey for investments with better returns than the other poor performing investment vehicles such as bank savings and the stock market, because the UK economy is slowly coming out from deflation this survey would easily say the population of investors and we can collect the each investor personal ideas and his opi nions and this survey will recorded. Focus groups are well known because they are experts in research to test reactions. A focus group sometimes called a à ¢Ã¢â€š ¬Ã‹Å"focus group interview is a group interview that focuses clearly upon a particular issue or topic and encompasses the need for interactive discussion amongst participants. They share the ideas, suggestions and tips for the particular topic these discussions conducted several times with similar participant to enable trends and patterns to be identified when the data collected and analysed (Lewis, P. Etal, 2009, pg-243 to 247) Data analysis This research proposes to use a mixture of qualitative and quantitative data analysis come within reach of data obtained through face to face interview, population and focus group will be analysed using the set of procedures from standard strategies approach of coding (Cooper and Schindler, 2006). These strategies approach is a systematic, advantage of the approach is that data analysis can be conducted in a less formalised and proceduralised manner while maintaining a systematic loom to reach certain strategy. Quantitative data refer to all such data and can be product of all research strategies, it can be shows from simple counts such as the frequency of occurrences to more complex data. Qualitative data refers all numeric data and data that have not been quantified and can be a product of all research strategies, it can variety from a short list of responses to open ended questions in an online questionnaire to more compound data (Lewis, P. Etal, 2009, pg- 414 and 480). Resource requirement The review of the literature will be got maximum from the journals and articles from the college library facilities like Emerald. The initiation of other work will get from usage of books and internet facilities from the college library books. Bibliography Cooper. DR, Schidnler.PM, 2006, Business Research Methods, Tata McGraw-Hill Edition Lewis. P, Saunders. M, Thornhill. A, 2009, Research methods for business students, Pearson Education Limited, pg-243 to 247

Economic and Political Systems of Cuba Essay

The Economic System in Cuba is known to be communism. Communism can be defined as a scheme of equalizing the social conditions of life. This system considers the termination of inequalities in the possession of property as well as the distribution of wealth equally to all individuals. Therefore, the means to achieve this is by the collectivization of all private property. By extension, collectivization is the process of forming collective communities where property and resources are owned by the community and not individuals. Freedom of expression is also mediated by the state. Communism is a system that usually is unsuccessful however, the only way that communism may be achieved is if every single member of a communist society is in complete agreement with the arrangement which was mentioned above. In early Cuban Political history, there were various communist as well as anarchist organizations for example the Communist Party of Cuba which was initiated in the early 1920’s by Julio Antonio Mella, Carlos Balino, Jose Marti and Fabio Grobart. It was then later led by both the first secretary and secondary secretary: – Fidel Castro and Raul Castro respectively. In Cuba, no other political party other than that of the Communist Party of Cuba is allowed to be formed in the fear that a non – communist party which will be funded by the United States of America would intervene and claim Cuba’s independence. In comparison to other ruling communist parties around the world, the communist party in Cuba retains a stricter approach and adherence to the tradition of Marxism – Leninism and the traditional Soviet Model. In addition, the Cuban Political System is described as authentic which is based on the unique history of the struggle for equality amongst individuals as well as independence. Cuba is a republic with a centralized socialist system with a structure of the State of Republic of Cuba as follows: –* National Assembly of People’s Power * Council of State * Council of Ministers * Provincial and Municipal Governments * Judiciary System

Descartes’ Philosophy Essay

Rene Descartes is one of the most distinct rationalists of the modern period who boldly claim that knowledge can be achieved through reason. He suggested that in the pursuit of knowledge one should be able to distinguish that which is true and that which is not true. This opens the idea towards his criticisms against experience as a source of knowledge. Experience, as Descartes puts it, cannot be trusted to produce genuine knowledge because experience can deceive a person (Heyward & Jones). It is a fact that experience comes from the external environment derived by the sensory organs (e.g. eyes, ears, nose, skin, and tongue). These sensory organs are deceptive in such a way that it can generate ideas that are not really existing or happening. Because of this fallibility of experience, Descartes argues that it cannot arrive at true knowledge. In effect, Descartes suggests that in order to obtain genuine knowledge, one should suspend his judgment on things that he or she perceives unless those things are proven to be certain and indubitable. With this method he called his pursuit of knowledge as the Methodic Doubt (Heyward & Jones). Discourse on Method In his Discourse on Method, he gives four laws which guide the person from pursuing the genuine knowledge (Heyward & Jones). The first law states that one should not admit anything as true that is not clearly and lucidly comprehended by reason. As he claims, truthfulness of an idea is based on it’s the clarity which is examined by reason. Reason tells which ideas are clear and generated by distinct intuitions. Having this law, he proceeds to the second and third laws. The second law suggests that because the mind can absorb complex ideas, these complex ideas should be able to transform to simple ideas that can be intuitively analyzed by reason. This emphasizes that simple ideas are the only ideas that reason can recognize such that complex ideas should be breakdown to simpler ideas in order for the reason to understand it clearly and distinctly. While the second law appears to be the analysis of the ideas, the third law is the synthesis of the ideas which attempts to figure out the connection and relationship among different ideas that are presented in the mind. This synthesis enables the mind to sort out ideas, and abstract them to arrive at conclusions, generalizations and judgments. The fourth and the final law suggests that the use of induction and deduction assures the achievement of knowledge since the ideas derived through induction and deduction are clearly and distinctly recognized by reason (being represented in simple ideas). Method of Doubt The discussion on the laws given above is essential in discussing Descartes’ Method of Doubt. As emphasized by the laws, ideas in order to serve as knowledge should be strongly recognized by reason in a sense that the reason cannot deny them at all. Hence, his Method of Doubt functions so as to arrive at certainty – that which cannot be doubted or denied by reason (Heyward & Jones). His method is different from the method used by the skeptics in such a way that the latter suspends their judgments only for the sake of doubt while the former suspends judgment for the achievement of certitude. As mentioned earlier, one should come up with a starting point which can be clearly recognized by reason and that which cannot be doubted. Descartes arrives at a conclusion that the thing that cannot be doubted by reason is the fact that one cannot doubt his existence. This is for the reason that if one is on the stage of doubting, it is certainly that he is thinking, and that thinking implies that there is something or someone who or which does the act of thinking. Hence, the thinking-thing exists. And that thinking-thing is, as Descartes put sit, â€Å"I.† Therefore, that which cannot be doubted is the fact that a thinking-thing exists (I think therefore I am [existing]) (Heyward & Jones). On God’s Existence As Descartes recognizes that one can be deceived by experience, such implies that there is true and false belief. This false beliefs which come into the mind as ideas are not caused by God for Descartes. For him, God is the most perfect entity that which cannot be doubted and that which cannot cause doubt. Hence, God is that which is certain and that which causes certainty that is why he cannot inflict deception (Still). The existence of simple, clear, and distinct ideas is the manifestation of the existence of the most perfect being that which is absolute and certain that is God. Therefore, God exists (He causes the most clear and distinct simple ideas which make up the certainty of things and ideas). Furthermore, Descartes advocates the idea that there are innate ideas. These innate ideas are not cause by the thinking-thing which is first established by him as that which cannot be doubted anymore. And those ideas have objective reality which is not influenced and caused by the thinking-thing; it appears then that there is actually another thing that certainly exists which caused the ideas absorbed by the thinking thing. And this thing that which exists prior to my existence is something which is absolute and the most certain of all certain things and ideas. As Descartes puts it, it is God. Another way of proving God’s existence is the idea of perfect and less perfect. As the thinking-thing is obligated to doubt so as to arrive at genuine knowledge, it implies that he is exposed to deception caused by the fallibility of the experience. And since the thinking-thing cannot discern all things with certainty it follows then that his power is limited. But the concept of perfection implies certain and absolute attributes (Still). As the thinking-thing recognizes the concept of perfection and his being an inferior and thus imperfect being, he concludes that there is something which is superior and that which is perfect, certain and absolute – that is God. Evaluation of Descartes Arguments on Knowledge Descartes is correct in saying that the mind can only and intuitively recognize simple ideas that are represented in the mind with perfect clarity and distinctiveness. He is also correct in saying that our sense perception can be deceived (e.g. optic illusions, the bending of the pen when submerged in water, etc.). And finally, he has a good point in saying that the foundation or the most fundamental thing or idea that is indubitable or cannot be doubted is the fact that the thinking-thing exists which does the doubting. However, his account on the existence of God and the innate ideas that he advocates are questionable in a way that they leave controversy and uncertainty. He equated the thing that causes the simple, clear and distinct ideas to God as well as the bearer of the attribute of being perfect. Being perfect, God is not caused by anything other than himself. But the mind is in fact the creator of such entity. If God is perfect how can be that he is not visible or perceptible to us? It is not enough to say that we are imperfect that is why we cannot perceive him. How can it happen that something which is perfect does not have a corporeal body, which the imperfect entities have? As a perfect being he should possess all the qualities that even the mere imperfect entities have. Works Cited Heyward, Jeremy and Jones, Gerald. Meditations: Rene Descartes. Hodder Murray, 2005. Still, James. â€Å"Descartes’ Meditations Ontological Argument.† 30 November 2005. Internet Infidels. 08 November 2007

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