Has printing money ever worked?

Sir_Humphrey

purch wrote: »

The only thing that appears to be "Hyper Inflating" are the continued ludicrous references to Zimbabwe and Germany in the 1920's

After watching that ghastly report on Channel Four News last night, I truly wonder how any intelligent person could compare the UK to Zimbabwe.

treliac

ad9898 wrote: »

I can't see it ever working, if you have a pound it buys you a certain amount, if there are too many 'pounds' in circulation your pound is worth less and so buys you less, leaving you in the same position (or worse) than you were initially, the only difference now is you have '2 pounds' instead, yet they will only buy you the same amount as when you had 1 pound.

That's right and, to my non-expert mind, seems the simple truth. However many pounds are circulating, there is only the same amount of wealth, in the shape of commodities to barter with and for. Just mean that more pounds will be needed to buy, as you have said. I guess, though, our incomes don't improve to match the need for more money to spend, so the cost of living rises.

Going back to being a non-expert. The bit I have most trouble with is that the government seem to be completely inept and non-expert too. So from UK plc, "H e l p ........" (fading into the distance)

kennyboy66_2

Generali wrote: »

The Americans tried it in 1931 in deflationary circumstances that have echoes today and it didn't work - it just had no impact. It is important to remember that we live in a very different world now to the world in 1931.

I thought that the US Fed didn't buy government securities until 1932 (probably too little too late).

I do know that in 1931 the federal reserve & Hoover (separately)

1) Increased interest rates.
2) Kept USA on Gold Standard
3) Increase taxation to try and blance the budget
4) Allowed 100's more banks to fail (9000 in total by the end of the depression
5) Signed protectionist legislation.

At least we know for certain what not to do.

If both Milton Freidman & Keynes say that the Fed should have provided emergency funding for banks to stop them failing, then thats probably good enough for me.

baby_boomer

They weren't too keen on printing money in the 1930s.

I'm not sure we've even had a deflationary depression where the whole world tried to print money to get out of it.

Hyperinflation comes from individual countries trying it & wrecking their currency in the process.

But if we all do it, we can't all wreck our currencies simultaneously.

mrstinchcombe

Sir_Humphrey wrote: »

After watching that ghastly report on Channel Four News last night, I truly wonder how any intelligent person could compare the UK to Zimbabwe.

I suppose at least its only our bank balances and jobs that have been massacred and not our residents... apart from the pensioners who can't afford heating because of failed pension schemes and sky high council tax bills of course!

Browns Britain... We've never had it so bad

mrgerrard

It was tried in Japan at the start of the decade without any clear sign of success or disaster. Ominously though every time this is even mentioned by the BoE Sterling gets massacred on the money markets. If I was Mervyn King I would not print money as Sterling is not a global reserve currency and the effect on exchange rates would negate any positives printing money might bring. But I'm not, it looks like that is what the bank is planning so we could have an answer to the question in the next 12 months.

mrstinchcombe

I think printing money would work in this country, but only if we print billions of dollars and euros.

Our economy would look quite good then!

purch

But if we all do it, we can't all wreck our currencies simultaneously

This way we all lose !!!!!!!!!!! :T

Asheron

The Labour party aren't that bothered though. They know it'll be the Tories that'll have to deal with a mess

O please wake up, fool, both party's are controlled by the same people!

It's like Mc Donalds, when you have Cold Fries, you go to the Manager to complain, but you never see the Main Managers the real owners!

LOL!

When you vote in another party you never see them changing the mistakes of the previous party, do you?

Graham_Devon

Asheron wrote: »

When you vote in another party you never see them changing the mistakes of the previous party, do you?

Erm, yes. Hence why everyone complained so much when interest rates had to rise so much and people like Maggie had to make some of the toughest, riot creating decisions.

People don't just put interest rates up to 15% for the fun of it after yet another labour collapse of the economy.