Wednesday, Feb 18, 2009
Good intentions
Telegraph: Bank of England seeks power to inject more money into economy to fight recession
The Bank of England's Monetary Policy Committee has voted unanimously to seek Goverment permission to increase the amount of money in the economy as interest rate cuts lose their power to fight recession. The 9-0 vote by the MPC was revealed in the minutes of the meeting held on February 5. The Bank's Governor Mervyn King will now write to Alistair Darling, the Chancellor, to ask for approval to introduce measures aimed at raising the supply of money in the economy – known as quantitative easing.
Posted by quiet guy @ 12:47 PM (507 views) Add Comment
4 Comments
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1. Crunchy said...
Tell me something I did not know months ago. What a corner they have gotten us into.
SO PREDICTABLE. Banks get toy money to lend back to us on a real basis and of course they do not create the interest. Oh dear!
Over to you Mugabe.........
2. Tonys said...
Now we know why the pound slipped so quietly, -away from the media's attention,- against the dollar and the euro. The port of escape for uk savers shut quietly down ( I am now looking around to open a sterling account abroad or even considering Iceland!).
The debt became so large that some of the interest on it has to be printed too, sacrificing savers. Obviously they will never print money to cover all the interest, but enough to make the debt load payable.
3. flintster1994 said...
Off topic, but there's been a bit of talk today in one or two of the broadsheets about Gordon Brown taking on the job of some sort of global financial minister. Would this require him to stand down as PM and even though it's being rubbished by the government, what would that entail? Scary thought about GB becoming the global financial tzar. Probably rubbish.
4. stillthinking said...
The crazy thing is that Brown has no background in economics at all. Although it is a while ago now, the only reason Brown became Chancellor was because Blair nabbed prime minister ahead of him. He became Chancellor purely because it is seen as the No.2 government position. Nobody in New Labour ever though that perhaps an economist might be a good choice, these were roles divided up purely on the basis of "perceived" importance.
I think if you look at GB's press announcement and strategy since problems became apparent in late 2007, you can see him revealed at the beginning as totally clueless, and even now he is still dependant on advisors from the banking sector. He is way out of his depth.
For him to be in any finance position at all is ridiculous.
The only reason it makes any sense would be to stop the other countries arguing, like crappy small Brussels getting the European government seat because the larger countries couldn't abide one of the others having it. In the same way, there wouldn't be any spats from productive economies if the head of financial tzar came from the recently collapsed no.20+ in the world order.