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Quantative Easing

Although it sounds like me trying to get into a size 18 pair of trousers, I realise that it has something to do wiv da kreditt krunch.

Please tell me this is not about inventing money where its not real. How does it work, have we done it before, has anyone done it before and what was the outcome?

Ta
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Comments

  • mewbie_2
    mewbie_2 Posts: 6,058 Forumite
    1,000 Posts Combo Breaker
    Hi Jenner, I bow to no man in my knowledge of this subject. Many hours spent boning up (as we say in the old economics profession). I will be only too glad to share freely of my extensive knowledge on this and any other economics matter you may be wishing to ask me.

    mod: mewbie knows nothing on this or any other subject. Ignore him.
  • kwikbreaks
    kwikbreaks Posts: 9,187 Forumite
    jenner wrote: »
    Please tell me this is not about inventing money where its not real. How does it work, have we done it before, has anyone done it before and what was the outcome?

    Ta
    Ok I'll tell you it's not about inventing money at all. It's about printing money.

    The money is real but unfortunately it has the effect of making any money you had before slightly less real.

    The Germans tried it in the 1930's and probably others before them so it isn't new. Mr. Mugabe of Zimbabwe is the current champion of this means of fiscal policy.

    At the end of the game the Germans didn't do too badly and Mr Mugabe is still in control of Zimbabwe so I guess it can't be ruled completely bonkers.
    http://en.wikipedia.org/wiki/Quantitative_easing
  • jenner wrote: »
    Please tell me this is not about inventing money where its not real.

    Ironically, this is the premise of our fractional reserve banking system. Have a look at this which will explain the basics of banking.....

    http://uk.youtube.com/watch?v=vVkFb26u9g8
    In the beginning the Universe was created. This has made a lot of people very angry and been widely regarded as a bad move........Douglas Adams
  • puddy
    puddy Posts: 12,709 Forumite
    WHAT????????????

    am I going to need a wheelbarrow to buy some bread???

    >runs off screaming with hands in the air<
  • 1echidna
    1echidna Posts: 23,086 Forumite
    jenner wrote: »
    WHAT????????????

    am I going to need a wheelbarrow to buy some bread???

    >runs off screaming with hands in the air<

    Might be worse - there might be no bread to buy or you don't have the notes to buy it with.
  • Masomnia
    Masomnia Posts: 19,506 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    jenner wrote: »
    WHAT????????????

    am I going to need a wheelbarrow to buy some bread???

    >runs off screaming with hands in the air<

    Our situation and Germany's in the 1920s, not 30s, is pretty different, it was all to do with reparations after the first world war. Same with Zimbabwe, different circumstances. We print money frequently, though I'm not really going to be good at explaining exactly why, something to do with the economy growing.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • zarazara
    zarazara Posts: 2,264 Forumite
    so, if theres no bread, will there be cake?
    "The purpose of Life is to spread and create Happiness" :j
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I am getting bored with QE anyone got any other High falutin Economic concepts to discuss? :confused:
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • 1echidna
    1echidna Posts: 23,086 Forumite
    Masomnia wrote: »
    Our situation and Germany's in the 1920s, not 30s, is pretty different, it was all to do with reparations after the first world war.

    Yes it is different as is Zimbabwe's and as was Argentina's. We are though in a pretty deep hole caused by the bursting of the mother of all credit bubbles on whose growth we financed our life style. Of some comfort is tha Japan tried 'quantitative easing' in the nineties and it didn't result in raging inflation although it didn't end a long recession either.
  • repoamuse
    repoamuse Posts: 95 Forumite
    1echidna wrote: »
    Of some comfort is tha Japan tried 'quantitative easing' in the nineties and it didn't result in raging inflation although it didn't end a long recession either.

    Japan had nowhere near the level of national / personal debt we have. In fact they had SAVINGS and INDUSTRY

    The Japanese's problems were totally different to ours.

    Our problem is a [STRIKE]credit[/STRIKE] debt problem.
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