Extra £50bn pumped into economy

bo_drinker

http://forums.moneysavingexpert.com/showthread.html?t=1865175

Thrugelmir

Graham_Devon wrote: »

Which begs the question, why? It's been thrown at us that manufacturing is up, falls are declining, GDP is getting better, house prices up, car sales up, that the UK will be the first out of recession, bank profits up etc etc?

Manufacturing was up because the Honda car plant in Swindon is back at work. ( It was closed 5 of 6 months to end of May). In June it was still cranking up. July was running a reduced but normal line.

House prices are only creating another asset bubble. (As we've discussed before houses are not wealth creating).There is concern that the QE cash is also being invested into the stock market.

The cars we are buying are being imported. So have no beneficial effect on the Uk economy.

Bank profits are up (thank goodness). HSBC, Barclays and Standard Chartered making money abroad which is coming back to the UK. This is a tiny tiny amount relative to the losses racked up by HBOS, RBS, B&B and NR though.

There is an enormous shortgage of capital in the financial system. Created by borrowing to purchase inflated assets. Houses, Companies and Commodities. Either debt needs to be inflated away or assets need to deflate until equilbrium is reached again. Either way the medicine for many is going to be painful.

The best way of helping the UK economy is stay at home to holiday.

Trouble is most people want the sun and consider improving their lot someone elses problem.