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Acid In The Punch Bowl

Print... And In High Denominations.

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There’s been a lot of comment today on the need for a new round of quantitative easing. Adam Posen and David Blanchflower are calling for it: I have very little doubt it will happen.

But that’s not my point in writing this blog. I believe that so high is the risk of another bank collapse soon that the Bank of England has a short term duty to do something much more practical, which is to get the real printing presses rolling very fast to create an awful lot (I mean billions upon billions of it).

Why? Well, as I’ve explained over the last couple of days I think another bank bail out is likely to be required soon and I don’t just mean within eight years, I mean imminently. We have no idea if banks can survive a Greek default (and those that will follow) in which case we have a duty to ensure that money can still change hands.

That is only possible if all those who want cash can have cash.

I know that sounds extreme: I know it sounds like Weimar Germany; I know many don’t want to embrace the possibility that we could see a total loss of faith in banks but I’m being realistic. This government, any government, has a duty to ensure that people can lay claim to their own cash and make payments with it. Unless that cash is available on demand at banks that confidence will not be available.

So sure, consider QE.

But print some of the real stuff – and in high denominations – too. It may be vital to keeping this economy moving.

And if it’s a false alarm, store it: it will all get used eventually.

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Posted Today, 08:38 AM

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There’s been a lot of comment today on the need for a new round of quantitative easing. Adam Posen and David Blanchflower are calling for it: I have very little doubt it will happen.

But that’s not my point in writing this blog. I believe that so high is the risk of another bank collapse soon that the Bank of England has a short term duty to do something much more practical, which is to get the real printing presses rolling very fast to create an awful lot (I mean billions upon billions of it).

Why? Well, as I’ve explained over the last couple of days I think another bank bail out is likely to be required soon and I don’t just mean within eight years, I mean imminently. We have no idea if banks can survive a Greek default (and those that will follow) in which case we have a duty to ensure that money can still change hands.

That is only possible if all those who want cash can have cash.

I know that sounds extreme: I know it sounds like Weimar Germany; I know many don’t want to embrace the possibility that we could see a total loss of faith in banks but I’m being realistic. This government, any government, has a duty to ensure that people can lay claim to their own cash and make payments with it. Unless that cash is available on demand at banks that confidence will not be available.

So sure, consider QE.

But print some of the real stuff – and in high denominations – too. It may be vital to keeping this economy moving.

And if it’s a false alarm, store it: it will all get used eventually.

You've forgotten to post a link. Perhaps this time it should be me telling you to 'wake up'...

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If any qe goes straight to the masses then what's the first thing they're going to do with all that nice free dosh?

Huge flat screen tvs and other junk manufactured in China. What good will that do for the Uk economy? Feck all. And that same Chinese junk will suddenly be in short supply, thereby inflating the prices of it, thereby sending even more money offshore.

QE3, if it happens, should be spent in the way Obama is talking about spending his new billions, on infrastructure, creating jobs, on things that might actually benefit the people. Put money into their pockets, but do it through extra jobs, not a bloody great windfall.

May as well just give it straight to China rather than direct to the masses.

In fact, may as well give it straight to the bankers than straight to the masses.

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  • 337 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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