Quantative easing - good time to have a mortgage?

FungusFighter

Perhaps we should all be able to print our own money, like stamps etc:beer:

You could get software to design your own, like that customised Monopoly:j

Generali

FungusFighter wrote: »

Perhaps we should all be able to print our own money, like stamps etc:beer:

You could get software to design your own, like that customised Monopoly:j

That would be feasible under a Gold Standard. Indeed that's how bank notes started in England - they were receipts for gold held in bank vaults effectively.

Masomnia

drbeat wrote: »

Yes of course you're right! Argentina, Weimar Germany and Zimbabwe were all one offs...never to be repeated again!

Doh!

Not 100% on Argentina, but your examples aren't quantitative easing. Yeah they printed the money, but as far as I'm aware didn't use it in exchange for government debt.

Generali

Masomnia wrote: »

Not 100% on Argentina, but your examples aren't quantitative easing. Yeah they printed the money, but as far as I'm aware didn't use it in exchange for government debt.

IMO it doesn't really matter how you get the cash from the printing presses into circulation. You could drop it from a helicopter or pay people to dig it up from holes in the ground (as suggested by Ben Bernanke and JM Keynes respectively).

Masomnia

Generali wrote: »

IMO it doesn't really matter how you get the cash from the printing presses into circulation. You could drop it from a helicopter or pay people to dig it up from holes in the ground (as suggested by Ben Bernanke and JM Keynes respectively).

I'm sure it would have the same effect long term, but if the money supply grew by the same amount over five years, because the money was gradually lent out by the banks, rather than instantly, wouldn't the inflationary effect be less per year? If that makes sense. So instead of putting it directly into the economy and getting 10% over one year, it gets 2% (for simplicity's sake) over five years. Thus lessening the chance of hyperinflation?

I'm just speculating, really I'm not sure and ask out curiousity, hoping to learn from the discussion. I have no formal background in economics whatsoever, I should probably add!

Generali

Masomnia wrote: »

I'm sure it would have the same effect long term, but if the money supply grew by the same amount over five years, because the money was gradually lent out by the banks, rather than instantly, wouldn't the inflationary effect be less per year? If that makes sense. So instead of putting it directly into the economy and getting 10% over one year, it gets 2% (for simplicity's sake) over five years. Thus lessening the chance of hyperinflation?

I'm just speculating, really I'm not sure and ask out curiousity, hoping to learn from the discussion. I have no formal background in economics whatsoever, I should probably add!

My opinion (and this is a country mile away from orthodox economic theory) is that you will never be able to finesse printing money no matter which way you do it.

Fundamentally, what is the economy about do you think? My opinion is that it is about providing goods and services that other people want and are prepared to pay for and as a result will swap their labour for. It's the same whether you are buying a carrot, a car or a house.

Governments try to pretend they can control the billions of decisions made by millions of people each day. They can't and that's why socialism can never work even when Socialists end up at their logical end which is the Gulag.

tomstickland

Yes, but the failure of Woolworths proves that capitalism is wrong.

Generali

tomstickland wrote: »

Yes, but the failure of Woolworths proves that capitalism is wrong.

AIUI, current 'Democratic Socialist' Orthodoxy is that any failure by any individual, organisation or system means that nationalisation needs to result to prevent recurrence.

Woolies will never go bust again.

Harricks

This has been interesting reading. Generali, you do seem to have some knowledge about these things. Any thoughts on the original question I posted? Is inflation a real possibility - in which case should those with savings let inflation erode the value of their mortgage rather than pay it back now, and secondly whether euro or dollar look a better currency than the pound for holding cash savings over the next year or so? Let the pound weaken, pay back the mortgage by having held cash in a stonger currency and have cash left over?

mummytofour

Personally a food store and going back to basics by growing ones own food and developing a less commercial approach might help. When we get hyper inflation we are all going to have to find a way out and not all of us can afford gold bars.