Looks like the recent stimulus policies from Central banks around the world is set to continue for the next few months at least, but caution is recommended says Evan Schnidman in ‘Seeking Alpha’
In the last couple months of 2012, we are likely to see increased global stimulus efforts, not a withdrawal from stimulus. Some of these measures will be outside the precise purview of central banks, but they will probably have similar economic effects.
The first of these potential stimulative actions is a Spanish bailout as early as November. As with everything in the EU, this is tenuous at best, but reasonable projections indicate that a bailout could very well occur before year-end, and thereby bolster Spanish bonds and the eurozone as a whole.
The next stimulative action could be more direct market intervention from the Bank of England through more asset purchases. Although the BOE’s October minutes demonstrate a split over this policy move, the strength of the GBP and projected 0% growth in the British economy indicate that unless the Funding for Lending scheme becomes dramatically more successful, the BOE is likely headed for more QE.
