"Showering the population with greenbacks..."

BlondeHeadOn

... is a quote from Robert Peston's blog this morning:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

Actually the full quote is back to the issue of 'quantitative easing':

"The Fed is... spending hundreds of billions of dollars buying up US government debt and also loans to companies and householders - which has the effect of forcing down yields or interest rates.
By the time the US central bank is finished, it will have pumped trillions of dollars into the US economy in this way.
Over here, the Bank of England is preparing to do something similar, for the moment when its Bank Rate falls to nil (which may never come - but it would be foolish of the Bank of England to assume the zero hour will not arrive). This process has the ghastly name of "quantitative easing..."

and

"... it's not dissimilar to running the money printing presses at quadruple speed, filling up choppers with cash and then showering the population with greenbacks.
It's supposed to encourage businesses and consumers to spend rather than save, so that economic activity revives.
And it exposes the shocking paradox of our age: debt got us into this mess, but paying down that debt too quickly will only make the mess worse (or so the Federal Reserve and Bank of England believe - though I should point out that a growing number of economists are beginning to express fears that what the central banks are doing will prolong and exacerbate the crisis)."

Even now I understand it better, it still doesn't sound like a very good solution to me....

mewbie_2

As soon as I lose my job I'm going to go for this. Max out credit cards and spend my way out of trouble. Can't see a flaw in it.

neas

indeed.... then go bankrupt and you've coasted for 5 years no problems .