Honesty is its own risk/reward

The middle of last month saw nerves spread across the markets as investors worried the prolonged period of fiscal stimulus by central banks was coming to an end.

This now seems further off, as in the UK the prospect of further quantitative easing returns, following Mervin King’s chat with the Treasury Select Committee. So too in the US, with Ben Bernanke admitting to the Senate Banking Committee that rates will have to stay low for the foreseeable future as the economy struggles to come to terms with the effects of the recession. While these comments from the central banks give some guidance to the markets they do nothing to settle the arguments over what the long-term effects of this unprecedented programme will be. And more importantly how inve...