BoE to start printing money

boyse7en

The BoE is going to ask permission from Darling to start 'quantative easing'. LINK

So what now?

Buy another house and put the savings in gold?

purch

Wow. :eek:

Never saw THAT coming !!!!!

boyse7en

purch wrote: »

Wow. :eek:

Never saw THAT coming !!!!!

Well, you need to pay better attention to the financial news! If you don't we'll have to surgically remove your MSE license (it's like a poetic license, but with added vested interest)

Generali

From the Indie article:

Charles Bean, the deputy governor for monetary policy, said on Monday the aim was to boost the supply of money and credit to achieve the Bank’s 2 per cent inflation target and not to finance a government budget deficit as happens in corrupt regimes.

In other news:

Government borrowing for the first 10 months of the financial year now stands at £67.2bn. The chancellor has forecast borrowing for the full year of £77bn.

http://news.bbc.co.uk/2/hi/business/7898871.stm

Wookster

And in the FT:

http://www.ft.com/cms/s/0/35788e96-fe6d-11dd-b19a-000077b07658.html

With the public finances falling so much more deeply into the red than the Treasury expected, its forecast for a deficit of £118bn or 8 per cent of national income now appears all but impossible to meet. The consensus among independent forecasters, who have tended to be slow at realising the depth of public borrowing, is for the deficit to reach almost £130bn in 2008-09 with no improvement in 2010-11.

Generali

So that's the Government expected to borrow 27% of GDP over the next three years. Actually, assuming GDP falls the proportion of GDP being borrowed will rise.

At what point will the surpluses cover that so that borrowing is only being used for investment over the economic cycle as per the Brownian 'Golden Rule'?

While we're on the subject of Labour making a complete hash of running the economy (in the same way as every other time the British people have been unwise enough to vote for them), the last time Quantitative Easing was required in the UK was in the late 70s, just prior to inflation shooting up (peaked at over 20% in the early part of the Thatcher regime).

Oh and the same Government was also at the helm of HMS UK the last (only) time that Britain had to go cap in hand to the IMF.

Surely you guys will learn one day. Don't vote for them - they just screw everything up.

StevieJ

Generali wrote: »

So that's the Government expected to borrow 27% of GDP over the next three years. Actually, assuming GDP falls the proportion of GDP being borrowed will rise.

At what point will the surpluses cover that so that borrowing is only being used for investment over the economic cycle as per the Brownian 'Golden Rule'?

While we're on the subject of Labour making a complete hash of running the economy (in the same way as every other time the British people have been unwise enough to vote for them), the last time Quantitative Easing was required in the UK was in the late 70s, just prior to inflation shooting up (peaked at over 20% in the early part of the Thatcher regime).

Oh and the same Government was also at the helm of HMS UK the last (only) time that Britain had to go cap in hand to the IMF.

Surely you guys will learn one day. Don't vote for them - they just screw everything up.

Gen, so you actually believe that if we had a Tory govt in power now, we wouldn't have any of these problems

Generali

StevieJ wrote: »

Gen, so you actually believe that if we had a Tory govt in power now, we wouldn't have any of these problems

No I don't. I think the UK would be in a better position fiscally however which would make things much easier and probably lead to a better outcome.

The Labour Party does have a particularly poor history on economic management. Every UK Labour Government has had to endure either a Sterling crisis, a funding crisis or both IIRC.

Wookster

The problem is that Tories haven't really come up with any pragmatic ideas. In much the same way John McCain was completely unable to relate to the economic crisis in the US the Tories are wholly failling in this regard. If they win, its because they are less bad than Crash not because they will provide leadership, inspiration and new ideas.

The UK has SUCH a crisis of leadership, and able brained people in government at the moment.

Generali

Wookster wrote: »

The problem is that Tories haven't really come up with any pragmatic ideas. In much the same way John McCain was completely unable to relate to the economic crisis in the US the Tories are wholly failling in this regard. If they win, its because they are less bad than Crash not because they will provide leadership, inspiration and new ideas.

The UK has SUCH a crisis of leadership, and able brained people in government at the moment.

The problem is that everything is such a massive mess that it really is hard to see a way out.

If you prop up the banks you promote moral hazard and are giving out a blank cheque but then everyone is terrified of the alternative, especially the politicians who have promoted the idea that they can solve all ills with a wave of the magic pen.

The economy is screwed and again, the politicians are scared to do the obvious thing which is to scale down the public sector and make business more competitive by reducing the tax and regulatory burdens they face.

brightonman123

forgive my ignorance, but how does the extra cash get fed into the system, and then to my pocket?