Wednesday, Jan 07, 2009
Print, print, print etc
Evening Standard: Brown in final gamble: to print money
''THE Government may resort to printing extra money if interest rates keep falling. It is being considered as a desperate measure if base rates fall so far that they cease to work as an economic lever.''
Posted by hpwatcher @ 09:23 PM (1066 views) Add Comment
28 Comments
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1. crunchy said...
''THE Government may resort to printing extra money if interest rates keep falling.
Get on with it.
I know you cant wait.
Just give me a job running the presses, that's all I ask as compensation.
2. crunchy said...
Has anyone heard of a new retailer called doublepoundland?
3. drewster said...
crunchy,
I don't like the idea of that. It's doubleplusungood.....
4. crunchy said...
3. drewster
Don't you mean norfolk'n'good.
Where will it end?
5. little professor said...
əɯ ʞɔnɟ
![](http://msnbcmedia1.msn.com/j/ap/c4a35852-bc2a-4b23-8c85-059661252a8f.widec.jpg")
This is scary now. This printing money meme has gone mainstream - I can't belive it's actually become a feasible option to open up the printing presses at full tilt. This is going to lead to the complete ruing of this country.
6. Rimmer said...
Disasterous news for us all if this goes ahead.
Yes personal debt and government debt will be wiped out but the long term affects for the UK and us all will be Very Very Grim.
Certainly IRs will have to go 10% + and maybe far greater to contain it, i believe Zimbabwi IRs are currently 1200%
7. crunchy said...
Depression, hyperinflation it is then.
I'm shopping for Christmas already! Is that the idea? Scare the living daylights out of the consumer. When you don't spend we press the button.
Where is the terrorism act. I want to take a look!
8. techieman said...
"Desperado, why don't you come to your senses
You've been out ridin' fences,
For so long - now.
Ohh you're a hard one.
I know that you've got your reasons.
These things that are pleasin'you
Can hurt you somehow."
9. jackas said...
Even if you don't believe the hyperinflation doomsayers, you would be a fool to not admit it might happen.
Rather than spit blood, we should be asking - How do we protect ourselves?
10. crunchy said...
8. jackas said...Even if you don't believe the hyperinflation doomsayers, you would be a fool to not admit it might happen.
jackass, you can take that to the bank in a wheelbarrow.
On your journey 'cross the wilderness
From the desert to the well
You have strayed upon the motorway to Hell
Well I'm standing by a river
But the water doesn't flow
It boils with every poison you can think of
And I'm underneath the streetlights
But the light of joy I know
Scared beyond belief way down in the shadows
And the perverted fear of violence
Chokes a smile on every face
And common sense is ringing out the bells
This ain't no technological breakdown
Oh no, this is the road to Hell
And all the roads jam up with credit
And there's nothing you can do
It's all just bits of paper
Flying away from you
Look out world take a good look
What comes down here
You must learn this lesson fast
And learn it well
This ain't no upwardly mobile freeway
Oh no, this is the road to Hell
Chris Rea. Last part of Road to Hell.
11. str 2007 said...
Yes, how indeed.
12. jamonit said...
So, what to do instead? If you were PM or Chancellor.
13. crunchy said...
Trying to artificially inflate one's way out of a recession is a very dangerous tactic.
The thought of creating more money to un jam a credit system is just plain crazy. If that is the objective. Hmm!
If they do inflate, peoples wages will not rise because consumers will just tighten their belts further.
This is a recipe for a depression. There will be vast amounts of money in the system to lend with no borrowers willing to take it on. IMHO
14. crunchy said...
How do you protect yourself...................
I can only think of one way. If the credit lets rip again take on as much debt as you can, hide it then go bust. You wont need the banks again.
I am not advocating this, just stating a possible solution to one protecting themselves in an extreme case senario.
15. stillthinking said...
Money printing is the mechanism to transfer wealth from savers, as has been noted inflation on it's own does not create additional demand. The government proposes to appropriate and spend the wealth of the savers.
Personally I don't think they will be able to print because sterling would take such an immediate battering against everything and more to the point, New Labour wouldn't survive, and if New Labour wasn't going to survive anyway, one likes to think they would pursue more appropriate policies.
16. d'oh said...
I always wanted to be a billionaire...
17. stillthinking said...
Another weird thing about current policy is that there is a fair chunk of savings overseas held by Central banks, I think personally -they- are the most culpable savers, basically we are facing demand collapse as a result of foreign government action.
But the UK policy response is to attack their domestic savers instead. They are absolutely correct in that they can bully, say, Granny Tibbs in Swansea out of her savings much easier than forcing the central banks of Japan and China to start spending. Very socially unfair.
But coming back to the weird thing, which is, they seem to be making the presumption that these foreign bank reserves somehow don't exist anymore. Hence Mervyn can make his n.i.c.e. decade comments and we can carry on under the illusion that we don't have an inflation problem bearing down on us.
The squealing of the savers is getting fairly noisy now, but really at the moment it is just greedy. At the moment for a saver, anything pretty much that you want to buy is collapsing in price. In other words, in real terms the value of your savings is shooting up tremendously and you should all be very happy. Instead of the loud grunting and curly tail hanging down straight.
(apart from the loss of value against dollars etc) So basically as a UK saver there is still time to make plans.
But. The real problem is coming. The inflationary wave is coming. It is coming for Japan too one day. They managed to putter along with mild deflation for nearly two decades but one day....
However, the problem will only arrive with an economic recovery. I can't see one anytime soon so to conclude, if you are a saver, you have plenty of time. Maybe. Of course I just made all that up so don't rely on it.
Also, regarding my comment on 14. I neglected to say because I make this point again and again, they don't need to use money printing as a means of state appropriation of spending because they are already doing so using legislation against pension funds to involve them in the false priced gilt market.(german government bond auction already failed etc)
18. stillthinking said...
sorry, "appropriation of savings" not "appropriation of spending"
19. titaniccaptain said...
Hang on guys..........I have a question...........If we see inflation creeping back up then wont the BOE have put interest rates up?
20. inbreda said...
yes tc - I predict double digit interest rates within the next year or so.
21. inbreda said...
PS - where did we get to with talk of organising a shot across the BoE bows? A threat to empty savings accounts on 14 Feb if they continue to cut rates and deprive savers?
22. str 2007 said...
Inbreda
IMO the Government won't let the B o E raise interest rates to 5% never mind double digit within a year. I think we'll be in deep recession proper by then.
I hope you're right, but fear you're wrong.
RE: Feb 14th, where do you propose putting all your savings ? Are you talking under the matress or buying a stack of Gold or something ?
23. str 2007 said...
Inbreda
BTW I do quite like the idea of a mass punishment from savers to Banks/Government.
It is our money they're using, we should have some say.
24. crunchy said...
20. inbreda said...yes tc - I predict double digit interest rates within the next year or so
crunchy- Look at what Gordon has done it the past It will be ignored. A mere blip!
25. titaniccaptain said...
STR2007 and crunchy........the BOE is independent form the government.....and at some time in the future I think that will be made quite clear.........I have a bad feeling about gold......I do think it will continue to rise then just like crunchy said the other day its going to fall like a hot rock
26. str 2007 said...
TC
Just as we've had conversations before about preserving our savings, New Year and all that I feel I should make them work this year, just deciding what to do.
You could well be right about Gold, I certainly don't like buying out of desperation, but given this and other recent articles (taxing savings etc) it does make you wonder how safe money is in the bank.
27. crunchy said...
25. titaniccaptain.... The BOE is independent form the government.
crunchy-Those that are unaware of history are doomed to make the same mistakes.
I will give you the benifit of doubt. For now!
Re Gold- Who owns most of the gold in the world. That's power and it can move mountains.
28. landofconfusion said...
17. stillthinking said...
"At the moment for a saver, anything pretty much that you want to buy is collapsing in price."
According to the BoE inflation calculator, my personal inflation rate is circa 6% and RISING (mainly because food makes up such a large part of my outgoings).
19. titaniccaptain said...
"If we see inflation creeping back up then wont the BOE have put interest rates up?"
I'm with Imbreda on this one. I think rates will probably rise again by this time next year, mainly as a result of so called "imported" inflation.