Chancellor set to print more cash

superstar_2

One word, i diot!

TattyBear

Since my outgoings are minimal, hyperinflation equal huge rises in interest rates, equals a very nice return on my large amount savings.

Yes please!

Although, I agree the printing money idea is suicidal, and that Brown and Darling need to be shot.

tradetime

juicyjude wrote: »

How can we spend more?? Or am I totally missing something here. Our interest on our savings now is so poor that we cant afford to spend any more. Yes if you are prudent and save for your future, forget any reward now get into debt thats a different matter. So angry about a further cut today,I know it will happend at noon. Just waiting for the announcement!My interest on one account has gone from £207 per month to now probably £60.

How can we spend more??

forget any reward now get into debt

I think you've answered your own question there mate, not that I agree with that policy, I have no debts myself, am old school, was brought up to view debt as a bad thing.

tradetime

TattyBear wrote: »

Since my outgoings are minimal, hyperinflation equal huge rises in interest rates, equals a very nice return on my large amount savings.

Yes please!

Although, I agree the printing money idea is suicidal, and that Brown and Darling need to be shot.

I think you need to do some study, the expression "Be careful what you wish for ." springs to mind. I can assure you you do not want hyperinflation mate, trust me.

juicyjude

No I totally agree, we dont have debt either, I was just being a bit sarcastic, we are of the old school as well we always believed in an old fashioned sort of way that what you cant afford you saved up for then bought it.

tradetime

juicyjude wrote: »

No I totally agree, we dont have debt either, I was just being a bit sarcastic, we are of the old school as well we always believed in an old fashioned sort of way that what you cant afford you saved up for then bought it.

LOL I got the sarcasm, though it is more truth than sarcasm sadly, that is exactly what the governments want, all the dumb !!!!!!£s have borrowed the country into oblivion, ably assisted by the banks lending to them, now they want the sensible people to spend all their hard saved and take some debt, as since they're sensible they'll be able to manage it, and in the meantime, the government will spend our future as well.

Masomnia

Printing money is not at all unprecedented as someone wrote somewhere. We do it frequently, and people bring up these extreme examples (Zimbabwe, Argentina, Weimar Germany) because it fits in nicely with their political agendas; no need to worry that they have almost no similarities with our situation now...

Yes printing money can cause inflation, but remember that we're likely to face deflation as well, and it is not just the money supply which determines inflation, but the velocity of money also. If the velocity is low, and prices are falling then printing money will not necessary have an inflationary effect.

mrposhman

Masomnia wrote: »

Printing money is not at all unprecedented as someone wrote somewhere. We do it frequently, and people bring up these extreme examples (Zimbabwe, Argentina, Weimar Germany) because it fits in nicely with their political agendas; no need to worry that they have almost no similarities with our situation now...

Yes printing money can cause inflation, but remember that we're likely to face deflation as well, and it is not just the money supply which determines inflation, but the velocity of money also. If the velocity is low, and prices are falling then printing money will not necessary have an inflationary effect.

Not necessarily, remember a significant proportion of our goods that we buy are from abroad and we've all seen the reduction in the value of the £ recently. Should all countries do the same then its not such a bad idea. If they do not, then the £ will continue to weaken causing higher priced goods to us, hence inflation on these goods.

A run on the £ will surely remove the deflationary worry but create the worry of hyperinflation.

To me, the problem that we definately have at the moment, is that the banks are lending and no matter how much hot air spills out of brown and darling they won't lend. Its not hard to see why, this has not happened before, some banks are making their first EVER losses and things won't get back to how they were overnight like Brown appears to want.

The banks have become very internally focused as they try to protect their businesses and ensure that their balance sheets become robust again.

Until this happens we will not see lending like we used to, and then it will probably be on a reduced basis.

Therefore, if Brown wants someone to lend why not look at another weapon in his arsenal. Northern Rock. Why not divert some of the funds he is wasting elsewhere, to Northern Rock which will be used only for increasing lending. This is not borrowed amounts and therefore shouldn't adversely affect NR, but it should increase the money supply specifically to small businesses which will decrease the worry of job losses.

These loans can then either be packaged up and sold back to the mainstream banks at a later date or they can be consolidated into NR making the bank more attractive to potential purchasers which will hopefully produce a positive return for the taxpayer.

It definately seems like an attractive idea but one that hasn't been talked about.

Any views?

ES10

tradetime wrote: »

all the dumb !!!!!!£s have borrowed the country into oblivion,

Maybe it's the people like us who have saved that are the dumb !!!!!!£s ???
Kind of looks that way now ....

tradetime

Therefore, if Brown wants someone to lend why not look at another weapon in his arsenal. Northern Rock. Why not divert some of the funds he is wasting elsewhere, to Northern Rock which will be used only for increasing lending. This is not borrowed amounts and therefore shouldn't adversely affect NR, but it should increase the money supply specifically to small businesses which will decrease the worry of job losses.

These loans can then either be packaged up and sold back to the mainstream banks at a later date or they can be consolidated into NR making the bank more attractive to potential purchasers which will hopefully produce a positive return for the taxpayer.

It definately seems like an attractive idea but one that hasn't been talked about.

Any views?

AFAIK the government would not be allowed to do this, as it would be deemed unfair competition on banks, not only here in the UK but all over the EU.
As regards general bank lending, the banks won't start lending until they see some stability in the financial markets because as long as things keep deteriorating they face further witedowns, there is a very good chance that most of the money pumped into the banks so far will end up going to future writedowns, and they will need more to cover things like losses in commercial property markets, and the glut of leveraged buyouts that occurred just prior to the wheels coming off.