Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Invest in Sydney/Brisbane property markets, or for media/public speaking requests, email pete@allenwargent.com

Wednesday, 30 May 2012

QE on the way to UK again?

I'm not talking about Queen Elizabeth and the coming Jubilee weekend, instead I'm referring to Quantitative Easing (QE) in the UK.

The ever-brilliant lads at Deloitte Access Economics highlighted that with GDP in Britain floundering (worsened by diabolical weather in April) if the Eurozone crisis intensifies, the Brits won't hesitate to switch on the printing presses to pump up the economy with more cash.

Of course, in this day and age, they won't literally print more cash.

Instead the Bank of England will buy assets from the private sector, government bonds and quality corporate bonds - effectively increasing the amount of money in the economy and hopefully stimulating growth.

Since 2008, the Bank of England has fired some £325 billion into the economy.

Normally, a central bank would look to cut interest rates, but with rates already a record low of 0.50% there is not much room for movement left to work with.

Inflation risk

Inflation in the UK is running at 3.5% year on year.

History has shown that QE does not necessarily lead to inflation, but where inflation does occur, QE is often a key precipitating factor.

A tax on net savers

Inflation is bad news for those who try to save their cash (and also for pensioners) as each year the cash loses a percentage of its purchasing power.

What is needed as protection is investment in inflation-busting assets - shares in outstanding franchise-type companies who have the ability to raise their sales prices in line with or above the rate of inflation (personally, in the UK I just buy the FTSE 100 index via a fund) and investment properties in areas with supply shortages (London and the south-east of England).