Bank Of England Urged To Extend Quantitative Easing

[interestrateripoff]

http://business.timesonline.co.uk/tol/busi...icle6736308.ece

The Bank of England’s monetary policy committee (MPC), which meets this week, is under pressure from economists and business to extend its policy of “quantitative easingâ€, or creating money.

The shadow MPC, which meets under the auspices of the Institute of Economic Affairs, says interest rates should stay at 0.5% but the Bank should extend quantitative easing.

The policy, which has mainly been achieved by purchases of gilts, has so far amounted to £125 billion, within the £150 billion limit agreed with the Treasury.

The shadow MPC says the Bank should proceed with the remaining £25 billion and then go further, with between £50 billion and £300 billion of additional easing.

The British Chambers of Commerce agrees. “It is clear that quantitative easing is not yet fully effective and we urge the MPC to step up the pace,†said David Kern, its chief economist. “The size of the programme should be increased without delay, well beyond £125 billion, and the proportion of corporate paper purchased by the Bank should be raised.â€

The City is expecting the Bank to leave the door open to further quantitative easing but to continue the moratorium it signalled at its meeting last month. Mervyn King, the governor, has emphasised that the stock of purchased assets is more significant than the flow of such purchases.

• The Adam Smith Institute this week publishes a 10-point plan to cut Britain’s budget deficit, with 3% annual real cuts in public spending.

As I keep asking if we can simply print money what is the point in working? Why doesn't the BoE simply give everyone the £20 design and we can all print our own.

Lets debase the currency and solve our economic crisis. It hasn't gone wrong in Zimbabwe has it, that country is full of billionaires now.

[BalancedBear]

Yes, it makes you wonder why these stupid "economists" think we can print money to increase wealth, when other countries cannot. As I have said before why do we not just send a printing press to every poor country to make them rich? These muppets are so stupid they thought debt was wealth, and now that is proven to be wrong, they think they can just print money to become wealthy. Well they can print lots of money, but everytime they print they devalue the remaining money. Printing more money does not make this country more able to produce anything, increase its output or become more efficient. I sure hope this policy is not followed, otherwise we will go Zimbabwe.

Edited August 2, 2009 by BalancedBear

[Bloo Loo]

the british chamber of commerce were looking for my membership.

no way.

[crashologist]

A brief history of banknotes:

http://www.bankofengland.co.uk/banknotes/about/history.htm

So what exactly does 'I promise to pay the bearer on demand the sum of ten pounds' etc. actually mean for us during a period of QE?

It's us, the people, who will 'bear' the brunt of this.

[Injin]

All they have done is print and print.

And talk a lot about how they aren't printing and how difficult it is for them to do.

Bank of england - Paid Banker VI/media

Print.......... Story designed to make you uncertain 1

Print.......... Story designed to make you uncertain 2

Print.......... Story designed to make you uncertain 3

Print.......... ***** about deflation

Print.......... Concerns about inflation pooh poohed by respected academic

Print.......... Buy a bear with keynesian leaning (Hi Nouriel!)

Print.......... Roll out nobel prize winners

Print.......... etc

Edited August 2, 2009 by Injin

[Guest Daddy Bear]

All they have done is print and print.

And talk a lot about how they aren't printing and how difficult it is for them to do.

Bank of england - Paid Banker VI/media

Print Story designed to make you uncertain 1

Print Story designed to make you uncertain 2

Print Story designed to make you uncertain 3

Print ***** about deflation

Print Concerns about inflation pooh poohed by respected academic

Print Buy a bear with keynesian leaning (Hi Nouriel!)

Print Roll out nobel prize winners

Print etc

anyone out there happy holding paper at the moment?

(unless you are on the crapper)

Edited August 2, 2009 by Daddy Bear

[Guest Daddy Bear]

anyone out there happy holding paper at the moment?

(unless you are on the crapper)

[roman holiday]

anyone out there happy holding paper at the moment?

(unless you are on the crapper)

Yes, buying cheap dollars... and will sell when expensive for cheap gold and silver.

[crashologist]

Yes, buying cheap dollars... and will sell when expensive for cheap gold and silver.

How does that work?

[Guest Daddy Bear]

Yes, buying cheap dollars... and will sell when expensive for cheap gold and silver.

you what?

i have not got a clue what you are talking about?

[aa3]

Another £300 billion would be quite helpful.

My next recommendation to HM Treasury is to get rid of the VAT, which is projected to bring in £69 billion this year. Replace that all with QE. It would have a near neutral impact on inflation since people have to pay the vat on everything they buy.

They'll never do this but sending every adult in the country £100 a month for the next 12 months would alleviate a lot of the strain being felt everywhere. And it would only cost about £50 billion.

Hmm that only takes us to 120 billion.. still lots more can be done if neccessary.

[Bloo Loo]

All they have done is print and print.

And talk a lot about how they aren't printing and how difficult it is for them to do.

Bank of england - Paid Banker VI/media

Print.......... Story designed to make you uncertain 1

Print.......... Story designed to make you uncertain 2

Print.......... Story designed to make you uncertain 3

Print.......... ***** about deflation

Print.......... Concerns about inflation pooh poohed by respected academic

Print.......... Buy a bear with keynesian leaning (Hi Nouriel!)

Print.......... Roll out nobel prize winners

Print.......... etc

plausible.

worry when people beleive it is the final solution.

[Guest Daddy Bear]

still lots more can be done if neccessary.

why not raise public sector pay at around the 10% region

you could increase the wages of probably 50% of the population

in places like newcastle probably 90%

[Injin]

Another £300 billion would be quite helpful.

My next recommendation to HM Treasury is to get rid of the VAT, which is projected to bring in £69 billion this year. Replace that all with QE. It would have a near neutral impact on inflation since people have to pay the vat on everything they buy.

They'll never do this but sending every adult in the country £100 a month for the next 12 months would alleviate a lot of the strain being felt everywhere. And it would only cost about £50 billion.

Hmm that only takes us to 120 billion.. still lots more can be done if neccessary.

Hands out of my pockets, please.

Edited August 2, 2009 by Injin

[Bloo Loo]

Another £300 billion would be quite helpful.

My next recommendation to HM Treasury is to get rid of the VAT, which is projected to bring in £69 billion this year. Replace that all with QE. It would have a near neutral impact on inflation since people have to pay the vat on everything they buy.

They'll never do this but sending every adult in the country £100 a month for the next 12 months would alleviate a lot of the strain being felt everywhere. And it would only cost about £50 billion.

Hmm that only takes us to 120 billion.. still lots more can be done if neccessary.

why £100.

why not £10,000, that would really get the economy moving.

indeed, whynot replace the minimum wage with QE, £12,000 or so. people wouldnt need to be paid. save businesses every a packet in costs.

[lowrentyieldmakessense(honest!)]

the british chamber of commerce were looking for my membership.

no way.

+1

all the meetings ive been too are full of f accountants anyway

have seen enough of them

[lowrentyieldmakessense(honest!)]

all been tried before many times in history

i repeat

http://www.usagold.com/gildedopinion/assignats.html

And, first, in the economic department. From the early reluctant and careful issues of paper we saw, as an immediate result, improvement and activity in business. Then arose the clamor for more paper money. At first, new issues were made with great difficulty; but, the dyke once broken, the current of irredeemable currency poured through; and, the breach thus enlarging, this currency was soon swollen beyond control. It was urged on by speculators for a rise in values; by demagogues who persuaded the mob that a nation, by its simple fiat, could stamp real value to any amount upon valueless objects. As a natural consequence a great debtor class grew rapidly, and this class gave its influence to depreciate more and more the currency in which its debts were to be paid.[85]

The government now began, and continued by spasms to grind out still more paper; commerce was at first stimulated by the difference in exchange; but this cause soon ceased to operate, and commerce, having been stimulated unhealthfully, wasted away.

Manufactures at first received a great impulse; but, ere long, this overproduction and overstimulus proved as fatal to them as to commerce. From time to time there was a revival of hope caused by an apparent revival of business; but this revival of business was at last seen to be caused more and more by the desire of far-seeing and cunning men of affairs to exchange paper money for objects of permanent value. As to the people at large, the classes living on fixed incomes and small salaries felt the pressure first, as soon as the purchasing power of their fixed incomes was reduced. Soon the great class living on wages felt it even more sadly.

Prices of the necessities of life increased: merchants were obliged to increase them, not only to cover depreciation of their merchandise, but also to cover their risk of loss from fluctuation; and, while the prices of products thus rose, wages, which had at first gone up, under the general stimulus, lagged behind. Under the universal doubt and discouragement, commerce and manufactures were checked or destroyed. As a consequence the demand for labor was diminished; laboring men were thrown out of employment, and, under the operation of the simplest law of supply and demand, the price of labor--the daily wages of the laboring class--went down until, at a time when prices of food, clothing and various articles of consumption were enormous, wages were nearly as low as at the time preceding the first issue of irredeemable currency.

The mercantile classes at first thought themselves exempt from the general misfortune. They were delighted at the apparent advance in the value of the goods upon their shelves. But they soon found that, as they increased prices to cover the inflation of currency and the risk from fluctuation and uncertainty, purchases became less in amount and payments less sure; a feeling of insecurity spread throughout the country; enterprise was deadened and stagnation followed.

New issues of paper were then clamored for as more drams are demanded by a drunkard. New issues only increased the evil; capitalists were all the more reluctant to embark their money on such a sea of doubt. Workmen of all sorts were more and more thrown out of employment. Issue after issue of currency came; but no relief resulted save a momentary stimulus, which aggravated the disease. The most ingenious evasions of natural laws in finance which the most subtle theorists could contrive were tried--all in vain; the most brilliant substitutes for those laws were tried; "self-regulating" schemes, "interconverting" schemes--all equally vain.[86] All thoughtful men had lost confidence. All men were waiting; stagnation became worse and worse. At last came the collapse and then a return, by a fearful shock, to a state of things which presented something like certainty of remuneration to capital and labor. Then, and not till then, came the beginning of a new era of prosperity.

Just as dependent on the law of cause and effect was the moral development. Out of the inflation of prices grew a speculating class; and, in the complete uncertainty as to the future, all business became a game of chance, and all business men, gamblers. In city centers came a quick growth of stock-jobbers and speculators; and these set a debasing fashion in business which spread to the remotest parts of the country. Instead of satisfaction with legitimate profits, came a passion for inordinate gains. Then, too, as values became more and more uncertain, there was no longer any motive for care or economy, but every motive for immediate expenditure and present enjoyment. So came upon the nation the obliteration of thrift. In this mania for yielding to present enjoyment rather than providing for future comfort were the seeds of new growths of wretchedness: luxury, senseless and extravagant, set in: this, too, spread as a fashion. To feed it, there came cheatery in the nation at large and corruption among officials and persons holding trusts. While men set such fashions in private and official business, women set fashions of extravagance in dress and living that added to the incentives to corruption. Faith in moral considerations, or even in good impulses, yielded to general distrust. National honor was thought a fiction cherished only by hypocrites. Patriotism was eaten out by cynicism.

Thus was the history of France logically developed in obedience to natural laws; such has, to a greater or less degree, always been the result of irredeemable paper, created according to the whim or interest of legislative assemblies rather than based upon standards of value permanent in their nature and agreed upon throughout the entire world. Such, we may fairly expect, will always be the result of them until the fiat of the Almighty shall evolve laws in the universe radically different from those which at present obtain.[87]

And, finally, as to the general development of the theory and practice which all this history records: my subject has been Fiat Money in France; How it came; What it brought; and How it ended.

It came by seeking a remedy for a comparatively small evil in an evil infinitely more dangerous. To cure a disease temporary in its character, a corrosive poison was administered, which ate out the vitals of French prosperity.

It progressed according to a law in social physics which we may call the "law of accelerating issue and depreciation." It was comparatively easy to refrain from the first issue; it was exceedingly difficult to refrain from the second; to refrain from the third and those following was practically impossible.

It brought, as we have seen, commerce and manufactures, the mercantile interest, the agricultural interest, to ruin. It brought on these the same destruction which would come to a Hollander opening the dykes of the sea to irrigate his garden in a dry summer.

It ended in the complete financial, moral and political prostration of France-a prostration from which only a Napoleon could raise it.

But this history would be incomplete without a brief sequel, showing how that great genius profited by all his experience. When Bonaparte took the consulship the condition of fiscal affairs was appalling. The government was bankrupt; an immense debt was unpaid. The further collection of taxes seemed impossible; the assessments were in hopeless confusion. War was going on in the East, on the Rhine, and in Italy, and civil war, in La Vendee. All the armies had long been unpaid, and the largest loan that could for the moment be effected was for a sum hardly meeting the expenses of the government for a single day. At the first cabinet council Bonaparte was asked what he intended to do. He replied, "I will pay cash or pay nothing." From this time he conducted all his operations on this basis. He arranged the assessments, funded the debt, and made payments in cash; and from this time--during all the campaigns of Marengo, Austerlitz, Jena, Eylau, Friedland, down to the Peace of Tilsit in 1807--there was but one suspension of specie payment, and this only for a few days. When the first great European coalition was formed against the Empire, Napoleon was hard pressed financially, and it was proposed to resort to paper money; but he wrote to his minister, "While I live I will never resort to irredeemable paper." He never did, and France, under this determination, commanded all the gold she needed. When Waterloo came, with the invasion of the Allies, with war on her own soil, with a change of dynasty, and with heavy expenses for war and indemnities, France, on a specie basis, experienced no severe financial distress.

If we glance at the financial history of France during the Franco-Prussian War and the Communist struggle, in which a far more serious pressure was brought upon French finances than our own recent Civil War put upon American finance, and yet with no national stagnation or distress, but with a steady progress in prosperity, we shall see still more clearly the advantage of meeting a financial crisis in an honest and straightforward way, and by methods sanctioned by the world's most costly experience, rather than by yielding to dreamers, theorists, phrase-mongers, declaimers, schemers, speculators or to that sort of, "Reform" which is "the last refuge of a scoundrel."[88]

There is a lesson in all this which it behooves every thinking man to ponder.

Edited August 2, 2009 by lowrentyieldmakessense(honest!)

[interestrateripoff]

why £100.

why not £10,000, that would really get the economy moving.

indeed, whynot replace the minimum wage with QE, £12,000 or so. people wouldnt need to be paid. save businesses every a packet in costs.

We can take this further, go into hospital and get QE money, become unemployed get QE money, become PM get paid in QE money.

Pay children to go to school with money.

In fact lets pay everyone in funny money especially my servants.

[Bloo Loo]

We can take this further, go into hospital and get QE money, become unemployed get QE money, become PM get paid in QE money.

Pay children to go to school with money.

In fact lets pay everyone in funny money especially my servants.

we should give every child born a billion pounds and advise them to spend it wisely.

[interestrateripoff]

we should give every child born a billion pounds and advise them to spend it wisely.

Cheapskate only a billion, by the time they are an adult that would be worthless.

Every child born should get at least a quadrillion.

[Bloo Loo]

Cheapskate only a billion, by the time they are an adult that would be worthless.

Every child born should get at least a quadrillion.

ow about a googleplex...make them feel at home on the web right away.

[Executive Sadman]

Its not working! Do more of it!

[bogbrush]

While the numpty media and commentating community continues to value things is pounds, this is a smart move by anyone trying to cling on to power. When house prices and stocks go "up" all is well, right?

But if they do this and then ask what the stock market and house prices are in terms of Gold, or anything else they can't fabricate, it will tank.

But can the people grasp this while they still think the currency is an absolute measure of value?

[interestrateripoff]

Its not working! Do more of it!

Clearly you should be in Gordon's cabinet

We need more money and more should be printed.

[AvidFan]

As an aside, I recently noted that hyperinflation in Zimbabwe has been cured by the adoption of the US dollar as its main currency, so says a BBC report.

I think that's what they call an oxymoron.

Edited August 2, 2009 by AvidFan