Quantitive easing

When you say work

It works by devaluing the pound thus making us all worse off and fuelling inflation - as its hard to see firms giving big pay rises anytime soon it makes us all even worse off still (even worse still if you are a pensioner)

We are being royally ****** mate - it will take years of someone competent running the economy (ha!) to turn this round.

I suspect we will finish up having to join the Euro on France and Germany's terms to stop economic meltdown and runaway inflation.

Brown will be gone by then though so some other poor government - probably Tory will be left holding the baby

 

Well its too late now

But what we should have done is have some proper regulation of the banks so they cant lend what they dont have

Mutual societies are not allowed to borrow money to lend on - thats why quite a few wanted to convert to banks.

The trick that was pulled here was banks all lent money they didnt have and "insured" the debt against none repayment. The insurance was a way to work around regulations - the debt was insured so there was no risk

Of course the problem is that huge amounts of lending took place to people who could never pay back and the insurance turned out to be not worth anything as the companies insuring were bankrupt when called upon to repay.

The reason Spanish Banks are buying some of ours up is that the spanish government blocked this - basically pyramid selling - scheme.

But that particuar stable door was left open years ago


as to today
I am not an economics expert (if they exist at all) the problem is Britain has been living beyond its means for the entire life of Brown being in charge of the pennies.

Leaving all other considerations aside(and there are many!!) - under Maggie we were paying off the National debt. Since Blair Brown the country has lived beyond its means and financed job creation of (none?) jobs in the public sector by increasing borrowing.

There has to be a painful correction - there is no magic solution we are all going to be worse off.

Now to the particular problem addressed by printing money
As I understand it the Bank of England minimium lending rate is almost irrelevant today - assuming you can borrow some money to invest in business - or even for personal loans the banks are charging much higher rates.
Basically we scratch the banks back by insuring all their duff loans and taking large amouts of stock and they return by sticking 2 fingers up to us.
The plan is to flood the economy with enough notes that the banks will be so flush with cash they will start lending again at competative rates.
I'd prefer to see some legislation forcing them to do that - even at the expense of profits - how that can be implemened I dont know but as we are major shareholders of many of them there must be a way

Printing money is an act of desperation

 

As I see it

Consider that you and I set up a printing press and create loads of nice shiny £20 notes.

We then go and spend loads on new goods holidays new cars etc etc.

If we stand at the turnstiles on Tuesday and give £100grand to each supporter local business in Barnsley would see the benefit very quickly .

Thats pretty much what is happening except its the Bank of England is the master forger and its mates are the banks who it is hoping will lend the nice shiney new money to us all to do pretty much the same thing

 

Not often I agree with your economic policy

But in principle - dont we now own a major share of the banks so why cant we lend as required to business and individuals at competative rates. The others would then have to follow suit or go out of business.

I am sure this is better than just printing money