"Would you be able to explain - for the ageing and confused section of your subscription list (myself in particular) the difference in approach that governments seems to be following. For example the UK government seems to be engaging simultaneously in Quantitative Easing and also in deficit reduction (or at least interest on the deficit reduction). Why engage in these seemingly contrarian [Ed: contradictory?] activities at the same time? Also any comment on the recent 20 richest nations' conference which seemed to agree 'no more QE'

"Many thanks for the best global service anywhere."

David Fuller's view Many thanks for the generous feedback.

At the risk of sounding too cynical, much of what governments do can seem to be contradictory because of spin. There is also the tradeoff between what they would hope to do and the 'lesser evil' which they may feel compelled to opt for.

QE helps a government to keep long-term interest rates lower than they would otherwise be, as it attempts to recapitalise banks, cushion disinflationary pressures and jumpstart economic growth. However QE also risks spooking the markets because of spiralling debt and the prospect of future inflationary pressures. Government debt in most OECD countries is unacceptably high. The new UK government knows that it needs to keep interest rates low because the economy is still weak but it also needs to cut unproductive state spending.