Bank of Engand- how much cash does it have?

brightonman123

is there a bottomless pit? i wonder how many bailouts it can manage, before itself implodes?

StevieJ

brightonman123 wrote: »

is there a bottomless pit? i wonder how many bailouts it can manage, before itself implodes?

Basically yes, unfortunately it then creates bad problems down the line.

tomstickland

Inflation is considered by many to be caused when money supply outstrips economic growth. ie: pump loads of new money into the system and the money becomes worth less.

purch

is there a bottomless pit?

The bank can print as much money as it wants/needs (or as much as the Treasury tells it's too) so it will never run out

As mentioned above, the resulting dilution of value of the currency is the least of their worries, and the unavaoidable Inflation will actually help the Treasury in the long run, as the value of the amount of Government Debt is diluted away.

cos69

The Icelandic government seems to have discovered that you have to stop the printing presses eventually - because nobody will take your money if you over do it. UK already has the highest debt per taxpayer in the G9, so printing more money is not a good idea.

treliac

We now have predominantly a service industry and 'produce' little to trade with the rest of the world. When money becomes tight globally aren't we, with a heavy reliance on services and tourism, going to be particularly severely hit?

guppy

The government have the potential to obtain as much money as the population can earn or already holds. They can just take what they want (in tax). Anyone that decides otherwise is faced with the prospect of prison, the police and ultimately the army if it came to it.

But lets not get too apocalyptical on a Sunday...;)

cheekykid

Why money becomes less worthy if more are brought out? Isn't it greed that does it? If there is no greed then goods/services price won't go up and everyone can make a good living. What's wrong with eveyone having money?

Blah99

cheekykid wrote: »

Why money becomes less worthy if more are brought out? Isn't it greed that does it? If there is no greed then goods/services price won't go up and everyone can make a good living. What's wrong with eveyone having money?

Well I clicked the wrong button there, but never mind. For a practical example of this, take a look at Zimbabwe, where a loaf of bread costs eleventy-billion dollars.

cheekykid

Blah99 wrote: »

Well I clicked the wrong button there, but never mind. For a practical example of this, take a look at Zimbabwe, where a loaf of bread costs eleventy-billion dollars.

Sure, but isn't it greed that creates inflation? I don't understand much about economic so I might be wrong. Would appreciate if someone can explain what is the real reason behind inflation and how that affects the curreny rate against other currencies etc.
A lot of money in the society in itself doesn't create more inflation.

Blah99

Have a good old read of this, as you've asked a big question!

http://www.investopedia.com/university/inflation/default.asp