BoE to start printing money

Tim_Nicholas

So when this QE happens, question is, how much is the GBP going to drop against the Euro...

As much as £1 = 90 cents ?

What I don't understand is how high inflation happens at the other side of all of this, anyone able to help me ?

Graham_Devon

Thursday 8th January 2009

http://news.bbc.co.uk/1/hi/uk_politics/7817623.stm

Chancellor Alistair Darling has denied he is planning to "print money" in an effort to tackle the downturn.
On Wednesday, he told the Financial Times newspaper he was considering a policy of "quantitative easing" to increase money supply to the economy.
He has now said he is looking at "a range of measures," but "nobody is talking about printing money". Shadow Chancellor George Osborne said any such move would be "the last resort of a desperate government".

Move forward just over a month and you can bet your bottom dollar Alistair Darling will change his tune. No doubt he wil just say "I denied printing money, not QE". Is he a little confused maybe?

Wookster

Tim_Nicholas wrote: »

So when this QE happens, question is, how much is the GBP going to drop against the Euro...

As much as £1 = 90 cents ?

What I don't understand is how high inflation happens at the other side of all of this, anyone able to help me ?

The truth is no one knows. QE could have several effects ranging from nothing at all to >10% inflation depending on the extent to which it is implented.

What QE has the effect of is putting more money into the economy but not changing the goods available to buy in that economy, therefore relative to the goods available, money is worth less. External markets see that the UK is printing money and are less keen to buy UK denominated securities, causing the pound to devalue against other currencies which has a further inflatory effect on goods in the UK as the UK imports more than it exports.

QE is something that has been used before, but never without detrimental effects (if someone would like to point out I'm wrong here, please do so).

I see in other events Crash's asset protection scheme has fallen foul of the EU...

http://www.guardian.co.uk/business/2009/feb/19/banking-ring-fence-uk-europe

I can just about smell the smoke off those printing presses...

Wookster

Graham_Devon wrote: »

Shadow Chancellor George Osborne said any such move would be "the last resort of a desperate government".

At least the Tories speak, where have they been all this time?

Sleeping??

chucky

Graham_Devon wrote: »

Thursday 8th January 2009

http://news.bbc.co.uk/1/hi/uk_politics/7817623.stm

Chancellor Alistair Darling has denied he is planning to "print money" in an effort to tackle the downturn.
On Wednesday, he told the Financial Times newspaper he was considering a policy of "quantitative easing" to increase money supply to the economy.
He has now said he is looking at "a range of measures," but "nobody is talking about printing money". Shadow Chancellor George Osborne said any such move would be "the last resort of a desperate government".

Move forward just over a month and you can bet your bottom dollar Alistair Darling will change his tune. No doubt he wil just say "I denied printing money, not QE". Is he a little confused maybe?

there's a bit of a difference between printing mony and Quantative Easing.

"Chancellor Alistair Darling has denied he is planning to "print money" in an effort to tackle the downturn." - which is correct and isn't being carried out

"he was considering a policy of "quantitative easing" to increase money supply to the economy." - which as far as the article goes he has never denied

i'm not a Darling or Brown supporter - I'd rather people posted what they actually said instead of making things up just to be popular on here

Graham_Devon

chucky wrote: »

there's a bit of a difference between printing mony and Quantative Easing.

Go on then. What's the difference?

Graham_Devon

Wookster wrote: »

At least the Tories speak, where have they been all this time?

Sleeping??

Probably discussing new security measures to protect their ideas from theft

chucky

Graham_Devon wrote: »

Go on then. What's the difference?

'Quantitative' refers to the money supply; 'easing' refers to reducing the pressure on banks. A central bank can do this by buying government bonds (Treasury securities in the United States) in the open market, or by lending money to deposit-taking institutions, or by buying assets from banks in exchange for currency, or any combination of these actions."

I'm sure that you can work out what printing money is... think of Zimbabwe

mewbie_2

Graham_Devon wrote: »

Go on then. What's the difference?

It doesn't have to mean printing money. Most of the major companies will still accept cheques.

Graham_Devon

mewbie wrote: »

It doesn't have to mean printing money. Most of the major companies will still accept cheques.

Printing money, wouldnt mean printing money.