steering clear from lpt's, page-9

The UK has moved to Quantitative Easing (QE). For those that don't know the term it is "printing money" - remember Zimbabwe. Well hopefully not that bad.

The UK central bank has approval up to GBP150b to buy back gilts and other specified bonds etc. Talking this morning to a senior currency strategist he is quite upbeat about the UK situation 'finally'.

The UK market has now moved to a perception (According to the Strategist) that UK banks have aired their dirty laundry (Write-offs) and that although some further issues are in play, overall, unlike the US, the Strategist doesn't feel there is too much further bad news in the UK banking market other than them attempting to raise further liquidity.

QE has a strong multiplying effect so the UK central bank will be careful to not cause long-term infaltionary impacts taht can't be controlled in some way. But it should rather quickly (Within 12 months) have a positive influence on UK economic numbers it is believed.

The currency strategy thinks the lower pound has also been long over due and should continue to also help the economic situation.

As to the US economy (i.e. banks) well, nothing to say there at risk of being moderated.....

The important point is, the UK central bank has a more identifiable solution even if it is difficult and going to take time. The US government still isn't clear on what they are really trying to achieve. I blame the thousands/millions of special interest groups that all want their own little piece of the pie and to hell with the overall benefits.

The US has a long way to go, so I suspect, Europe and Asia are to be Australia's saving grace over the coming 2 years.

Property markets in the UK now are expected to be popular and growth should return rather quickly the strategist believes once the multiplyer effect and some further liqudity is raised. Could take 6 months or 9, but we could be nearing a well defined bottom in the UK market.

How long the rest of Europe will take, well it will depend on how quickly the hard decisions can be made.

These are just some thoughts from a well respected Currency Strategist and should only be taken for what they are and where they are printed - loosely...I know the strategist well and they are confident there is a definite upward trend appearing.

However, asset pricing are not going to spring to life immediately. First we are likely to see just a floor. Nothing more. Stop the loses first and then sit back and take a big breath....