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Bank May Start Printing Money Again As Fears For Economy Spread


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http://www.independent.co.uk/news/business/news/bank-may-start-printing-money-again-as-fears-for-economy-spread-2306284.html

The possibility of a further huge injection of money to underpin the economy will be discussed by policymakers at the Bank of England this week, pushing back until deep into next year the prospect of any rise in interest rates from their all-time low of 0.5 per cent.

A further £50 billion in "quantitative easing", colloquially termed "QE" or "printing money", could be announced by the Bank as early as this week, though many commentators think they will postpone a move until the picture becomes clearer still. The Bank has already pumped £200bn into the financial system. A second round – dubbed "QE2" – is now on the cards.

So QE1 failed, and yet we are now faced with the prospect of printing another £50bn of funny money.

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http://www.independent.co.uk/news/business/news/bank-may-start-printing-money-again-as-fears-for-economy-spread-2306284.html

So QE1 failed, and yet we are now faced with the prospect of printing another £50bn of funny money.

Maybe what they could do is add a "saver dividend" to savings accounts and give us 20% per year, freshly printed.

We would go out and spend it, and it would reward thriftiness and saving and "help FTBs" to save quicker for a deposit.

Better than giving it straight to the banks and the uber rich.

Or maybe give it straight to the government so they can eliminate the deficit and debt at a stroke.

Can't see anything going wrong with either of those options. :lol:

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Maybe what they could do is add a "saver dividend" to savings accounts and give us 20% per year, freshly printed.

We would go out and spend it, and it would reward thriftiness and saving and "help FTBs" to save quicker for a deposit.

Better than giving it straight to the banks and the uber rich.

Or maybe give it straight to the government so they can eliminate the deficit and debt at a stroke.

Can't see anything going wrong with either of those options. :lol:

Or maybe Merv could fly a helicopter over deprived areas and throw freshly printed £50 notes out?

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Must admit i'm surprised at the timing. I thought they would wait for inflation to fall back. Surely more inflation with negative wage inflation is just going to crash things harder.

What's peoples thoughts on the effect of QE on house prices. The last round coincided with rates being dropped so maybe this time it won't help?

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If they really want to stoke up inflation, drop real money into real peoples hands through a big fat tax giveaway, up the personal allowance to say £15k as of the 1st July, till the 5th April 2012.........So a 20% tax payer will benefit, if they earn £15k per annum by way of £1500.00 in their sky rocket. This is the real way to print money, the shortfall in tax revenue can then be made up by way of printing..........

Why do they not do this, because the new money falls in to the banks sky rockets, not real peoples, the QE money impoverishes real people pushing up commodity costs as the banks gamble in the exotic casino, by way of pushing up the costs of earths minerals............So increasing their pay packets....

I could stomach screwing peoples savings pot, screwing peoples pensions, but this is really about screwing peoples wages, their net take home pay. Wages are static, growing at best at a rate of say 2% per annum, for the past four years if you are lucky..........

What a f00kin mess.................

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They are only interested in the economy in so far as it affects the banks.

The Bank of England's sole responsibilities are for Monetary and Financial Stability.

i.e. protecting and the protecting the confidence in money and the financial system i.e. banks.

So if it is a choice between printing money to give to you, or printing money to help the banks...the answer is....

"Helping the banks to keep "hardworking families" in their homes, even if the "hardworking families" have to pay £20 for a loaf of bread."

It's a plan of sorts I guess. Just not a very good one as you can't eat bricks and mortar. :blink:

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Must admit i'm surprised at the timing. I thought they would wait for inflation to fall back. Surely more inflation with negative wage inflation is just going to crash things harder.

What's peoples thoughts on the effect of QE on house prices. The last round coincided with rates being dropped so maybe this time it won't help?

+1 the reason we have little growth is due to inflation. So they are talking about trying to cure the symptoms by doing something that exacerbates the disease.

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"Helping the banks to keep "hardworking families" in their homes, even if the "hardworking families" have to pay £20 for a loaf of bread."

I wish to buy future options on this £20 loaf of bread.... as I expect Bread Price Inflation to be significantly more than that. BPI I reckon means a loaf of bread will be priced in the trillions. And thats if you get to the store first thing in the morning.

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I suspect that a major reason for QE is and was to provide funds for new government borrowing to fund ongoing government spending.

Most gilts purchased by the BoE under QE1 were from non-banks, presumably pension funds, investment trusts, insurance companies etc. They receive the new broad money, their banks receive equal new base money.

http://www.bankofengland.co.uk/publications/quarterlybulletin/qb090201.pdf (see figure 1)

What might these institutions then do with their new money?

More often than not, buy some new gilts to replace the ones now sold to the BoE?

Edited by The Spaniard
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How can devaluing the currency (ie devaluing everyone's savings) ever be good for an economy?

I suppose the answer is: if you owe some foreigner even more money than the value of your savings (which you will be wiping out),...but are we in that much trouble?

Total in bank accounts: 1.5 trillion? total owed by government: 900 billion? Total owed by banks: unknown. (But let's guess at 10% of worldwide figure of ?200T).

Option B? Let the banks go bust, and compensate the savers.

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How can devaluing the currency (ie devaluing everyone's savings) ever be good for an economy?

I suppose the answer is: if you owe some foreigner even more money than the value of your savings (which you will be wiping out),...but are we in that much trouble?

Do (or can?) foreign holders of gilts participate in QE?

As far as I know UK individuals holding gilts were not invited to sell to the BoE under QE1.

So which gilt holders were invited to sell and which were not?

Anyone here know?

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  • 429 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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