What effect
has quantitative easing had on pension deficits of large UK companies? A recent study has suggested that the
final-salary pension shortfall of the top 350 companies in the UK has
quadrupled over the past year from £20 billion to £80 billion. The authors of the report suggest that this
increase is largely due to falling gilt yields, arising from the fact that the
Bank of England has bought a third of the gilt market through quantitative
easing. But this report ignores the
impact of quantitative easing on equities and other real assets held by pension
funds. As highlighted in an earlier
post, quantitative easing may have helped sustain returns on real assets.
According to Robert Shiller , speaking at Davos, Bitcoin is a perfect example of a bubble - story here . Shiller sees Bitcoin as a backwards step in the evolution of money. George Selgin , a free banker, takes an opposing view - click here . Although he doesn't believe that Bitcoin is money, he sees its development as a fascinating turn in the evolution of money. In particular, he lauds the fact that Bitcoin production is constrained and cannot be infinite. There is a short video below where Bitcoin explain how it works.