Printing money

purch

I'm interested to know, what is the negative points of quantative easing?

That they don't do enough of it, or not as quickly as required and asset prices and money supply velocity continue to shrink and the recession gets worse and worse, and becomes a depression.

P.S. I aplogise for not joining in the sensationalist scaremongering.

MRSTITTLEMOUSE

An old German friend of mine was a teenager when they did this in Germany in the early thirties.
She was telling me they got paid daily,ridiculous amounts of money and by the time they got to the shops they could'nt even afford to buy a loaf of bread with a days wages.What they could afford in the morning was unaffordable by tea-time.
Printing more money just proves we're realy in the do-do's.

stevetodd

amcluesent wrote: »

>House prices crash even harder.<

Depends. Once inflation takes hold, there could be increased demand of tangible assets as the purchasing power of savings falls.

I think you are right if inflation really takes hold it's cash that devalues, at that point assets such as property would better to hold than cash

purch

when they did this in Germany in the early thirties.

It was never done in Germany in the 30's or any other time.

Constant comparisons to the situation in the Weimar Republic and Zimbabwe could not be further from the truth.

Tygermoth

Please could you explain this statement and educate me why its different.

purch wrote: »

It was never done in Germany in the 30's or any other time.

Constant comparisons to the situation in the Weimar Republic and Zimbabwe could not be further from the truth.

beingjdc

It was almost exactly done in Germany, though in the 20s rather than the 30s. They couldn't afford to pay their war reparations, so they gave out Mark-denominated bonds etc. Like we're giving to the banks now who can't afford to pay their subprime debts!

purch

Well if you remember from your O level History

Germany defaulted on it's reparations in 1923....France took over the Ruhr Valley and other areas of Germany annexing virtually all the manufacturing and production capacity. The workers stopped working, and did a bit of rioting. French soldiers killed a few.

So that bit is exactly the same as what is happening here in the U.K. now...

...now for the differences...

Grade_A_Reject

Printing money is so 20th century. Most people have internet access and colour printers these days. They should make it a free download. :rolleyes:

Really2

ManAtHome wrote: »

Think they're only only buying "assets" (of potentially dubious worth) from the banks

The insurance thingy could benefit large and small corporates - something along the lines of "bank lends £2 billion to company, if they default bank is hit for £200 million, taxpayer picks up the other £1.8 billion" - will certainly discourage "irresponsible lending"...

No, What I was talking about they were saying there was a £50bn package for large business (over 1/2bn turnover) to finance things direct form the BOE direct for assets. Which then could be purchased back.
This was seperate to the insurance. at least that is what they said on radio 5?

MRSTITTLEMOUSE

purch wrote: »

It was never done in Germany in the 30's or any other time.

Constant comparisons to the situation in the Weimar Republic and Zimbabwe could not be further from the truth.

Sorry if I got the date wrong but I don't think my friend was lying to me.She may be old but her memory of that time was still good.