Saturday, Oct 24, 2009

Printy printy

The Telegraph: Gordon Brown: 'It would be suicidal to abandon economic stimulus

"Now more than ever is the time for steady and clear policies. That is why it would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses throughout the most challenging times in a generation."
His comments suggested the Bank of England's policy of "quantitative easing" – effectively printing more money and pumping it into the economy – would continue despite earlier signs that the programme, which stands at around £175 billion, might be halted.

Posted by devo @ 09:50 PM (3540 views)
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34 Comments

1. Tpbeta said...

If anyone says "printy printy"again I'm going to come round their house and show them what a real crash feels like.

Saturday, October 24, 2009 09:58PM Report Comment
 

2. alan said...

Malcolm Barr, an economist at JP Morgan, said: "... we are revising our forecast to anticipate a £50bn extension in QE alongside reserve remuneration changes".

I think the markets will be factoring in another £50bn...the question is: Where does it end?

Saturday, October 24, 2009 10:00PM Report Comment
 

3. chrisa said...

I think the markets will be factoring in another £50bn...the question is: Where does it end?

It certainly won't end with another 50 billion. Another 500 billion over the next three years possibly. Hyperinflationary depression here we come.

Saturday, October 24, 2009 10:08PM Report Comment
 

4. mander said...

QE has been tried and has't worked. Allow house prices to really become affordable and have full market activity as we can not afford a Japan style lost decade.

Saturday, October 24, 2009 10:25PM Report Comment
 

5. This comment has been removed as it was found to be in breach of our Blog Policies.

 

6. paul said...

There is a very real distinction between stimulus and QE.

Stimulus is government spending on stuff - building stuff, making stuff. QE is throwing money at bankers and the housing market to prop up an unsustainable boom and try to backstop falling house prices.

Our esteemed MPs are still framing the problem to benefit themselves and their second home values first, the rest of the UK second.

Saturday, October 24, 2009 11:52PM Report Comment
 

7. wiltshire said...

The sum of QE and it's duration of use is increasing all the time and interest rates are at their lowest in history. Yet, STILL they're seeing no improvement in the economy. So, throw another few tens of billions on the bonfire?

What is going on? Do you think GB is trying to leave the Tories with a mess so big they won't be able to sort it out in one term? Giving Labour more of a chance to get back in in 2014?

Sunday, October 25, 2009 01:29AM Report Comment
 

8. brickormortis said...

It would be suicidal to allow properties to become massively over-inflated in price! That is the real problem.

The only thing is, these morons don't think that house prices have anything to do with any of the problems we are facing.

And another thing, we seem to have become immune to figures. 1 billion pounds would pay the salaries of over 30,000 teachers for one year. So ten billion makes about 300,000 teachers for a year. Now this is just a profession plucked from the air, but it makes us realise what this all means. There was no money to improve our education system or to get our average class sizes down to 20 where teaching and learning is really possible but now we find it to bail out the irresponsible. Absolute c**p.

Sunday, October 25, 2009 05:26AM Report Comment
 

9. happy mondays said...

What brickormortis said...
Also ;
We are & shall become a diseased society, with a massive divide between the have's & have not's, which will not make it comfortable for anyone in the near future.

Sunday, October 25, 2009 07:41AM Report Comment
 

10. Ndg said...

Is it possible that any political party could ever represent the majority of the people? I think not.

Is it possible that ALL political parties could seek to represent the majority of the people? It's in their nature. But by virtue of their desires they liquidate their objective. Majority by fragmentation.

Is it reasonable that the majority of the people see the current situation as unreasonable? Sure.

Next step then...................................

Sunday, October 25, 2009 08:10AM Report Comment
 

11. Ndg said...

High house prices have facilitated the slavery of you, your children, and your chidrens' children. Add an extra "childrens' children" for each month that passes by.

Sunday, October 25, 2009 08:16AM Report Comment
 

12. japanese uncle said...

Helping banks to replenish their horribly impaired (by recklessly speculative lending) balance sheet is one thing, providing economic stimulus to the wider real economy is another, particularly when banks are not prepared to offer to, nay even calling loans from those badly in need, who otherwise can remain a good going concern.

Sunday, October 25, 2009 08:29AM Report Comment
 

13. The Number Cruncher said...

Gordon Brown: 'It would be suicidal to abandon economic stimulus" yes it would for Gordon Brown, but not for me!

Please stop and let the correction unfold

Sunday, October 25, 2009 08:33AM Report Comment
 

14. Simply Sam said...

Boom and Bust is an inherent essence of life and nature. Just as with birth comes the eventuality of death. A complete cycle can only be managed and celebrated. Pumping money for ever will not solve any problems...it just delays it! I hope I am wrong.

Sunday, October 25, 2009 09:04AM Report Comment
 

15. hpwatcher said...

I just wish that Brown would keep his big incompetent gob SHUT!!!

Sunday, October 25, 2009 09:18AM Report Comment
 

16. down wave said...

It was cheap money, low cost borrowing that got us into this mess in the first place, Exactly how does Gordon Brown think that printing money and making it even cheaper is goining to solve the problem?

It is very dark days indeed confronting the common man in the UK.

Sunday, October 25, 2009 09:31AM Report Comment
 

17. britishblue said...

It would be good to see some debate over and above the same old arguments for and against quantititive easing.
The very latest a General Election can be held is the 10th May next year, which is a mere stones throw away. It is highly unlikley that Brown and Co stand any chance of getting in, unless they print up rolls of £5,000 and have them hand delivered to every household. Therefore, It would be nice to see everyone put their heads together as to the likely implication to the economy, employment, house prices, pound, bankers, etc when the Conservatives get in. (Given that this is a house price crash site it would be good to see the emphasis more on house prices, with the other areas as related issues). The Labour party are working out their notice. In industry when someone is working out their notice or on garden leave, you concentrate on the new person coming in. With quantitive easing an analagy can be drawn with alcholism. With sever alcholism there has to be a controlled and gradual reduction of alchoholism over time or else the body cannot cope with the withdrawral symptons. Whilst we need to get off quantitive easing and re-pay debts, the strategy to do this is key. It would be suicidal to continue to expand quantitive easing indefinatley. It would also be suicidal for vaste swathes of our society if there was a sudden stopping of financial stimulus and swingingeing cuts all over the place without having a plan to replace demand in the economy.

Sunday, October 25, 2009 09:36AM Report Comment
 

18. mark wadsworth said...

Weird.

As Paul points out, QE is a sideshow. Economic stimulus is investing and making stuff.

Now, firstly I don't see the govt investing or making stuff. Secondly,people always spend their own money more sensibly and get better value than the government. Thirdly, if it liberalised planning laws, the private sector would be falling over itself to invest in airports and power stations and new housing and factories and so on.

Apart from new construction, the best economic stimulus must surely be tax cuts (and reducing means testing of benefits) especially VAT and Employer's NIC and sacking a couple of million quangista - however unskilled they are, even if they can only manage a minimum wage job, they will still be creating far more wealth than in the public sector where they are destroying wealth.

Sunday, October 25, 2009 10:16AM Report Comment
 

19. stillthinking said...

The problem which Brown never addresses is that the UK is structured wrongly, i.e. there are some businesses we don't have but need and others we do have but don't need. Like a country that has 50% of the population working in hot dog shops, that suddenly finds mass business failure/debt default on hot dogs, Brown has supplied BoE printed cash supposedly from the future tax payer purely to prop up the shares of the hot dog companies, lowered VAT on hot dog prices, and provided cash to people in equally worthless sections of the economy in an attempt to get them to buy more hot dogs, which they haven't.

That Germany had a sharper GDP contraction (and now seems closer to recovery) is just the reflection of purging their misallocated resources and getting on with their lives, their sharp contraction was painful but necessary and good. We on the other hand are still fighting to keep the hot dog shops open, running up debts and devaluing the currency in what will ultimately be a pointless futile attempt to maintain the status quo.

I think that when people suggest there will be an export led recovery, the implication is that for a company to be successful in the UK they need to disengage from the environment and monetary system they are embedded in, and work as a economic component of Germany/France and earn in Euros. While the mess that is their own economy rides piggyback on their efforts.

For QE to work would mean that the UK economy is balanced and sustainable, but just with liquidity problems. That is not the case. And if that is not the case, then we are borrowing pointlessly to extend a failed economy. This will be shown to be the case when the government cannot extend the fiscal stimulus further, and the contraction and realignment takes place against an unnecessary backdrop of debt.

Sunday, October 25, 2009 10:22AM Report Comment
 

20. crunchy said...

"Gordon Brown: 'It would be suicidal to abandon economic stimulus"

Let me expand.

'It would be suicidal to abandon economic stimulus to setting up a global system of shafting the underclasses with ease and complete

control. Fall of the Rebublic, is a revealing new documentary. http://www.youtube.com/watch?v=F8LPNRI_6T8

Sunday, October 25, 2009 10:26AM Report Comment
 

21. alan said...

Brown's Nu Lab webcast has been posted on the BBC website along with the smiling face of our PM. "Upturn in 2010" he says - if you are in any doubt of the BBC's political support for Brown then check it out.

I haven't posted the link - you can't miss it on the BBC site!

Sunday, October 25, 2009 10:36AM Report Comment
 

22. japanese uncle said...

crunchy

So are you for or against the fall of the Republic?

Sunday, October 25, 2009 10:37AM Report Comment
 

23. crunchy said...

17. japanese uncle.

I am a human being. AGAINST. X

The founding fathers of the USA were very smart and they even warned of this.

What happened?

Sunday, October 25, 2009 10:46AM Report Comment
 

24. a saver said...

"That is why it would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses throughout the most challenging times in a generation."
I'm sure there's plenty of people like me who have been harmed financially by GB's reckless policies and will be remembering on election day that he has in effect taken money out of their bank accounts and given it to irresponsible banksters and home "owners" , allowing the house price bubble to reinflate.
Well I would have been harmed had I not decided to keep more than half of my stash is foreign currencies. Glad to hear that some other HPCers have done the same.

Sunday, October 25, 2009 11:16AM Report Comment
 

25. braindeed said...

Munchy @18
The founding fathers of the USA were very smart and they even warned of this.

I agree with Edvard that the founding fathers were genius - I just think that their little window on Eden was a unique period of Humanity (you know, like wow......heres an unexplored oasis of land and resources)
Most people give little thought to anything other than self. 'We' tend to adopt party line thoughts on most things we regard as important to us (or more importantly, 'me') - the 'floaters' usually being the most ego-centric of all, and therefore the holders of the most power pro-rata ,of any of the electorate.
I started to watch his link @18, but had to stop - almost pored a stiff drink at this time of day. I do tend to share the gloomy prognosis that the part of the vid that i did watch sugggested - but therein lies a road to depression and more.
Ball locks to this - I'm going out for a walk

Sunday, October 25, 2009 11:25AM Report Comment
 

26. Enough Already said...

I predict a riot! - And about bl00dy time!

Sunday, October 25, 2009 11:41AM Report Comment
 

27. Zebbedee said...

@8
The irony is I have, I don't "own" a house but still I have and what I have I can put in a bag and take with me when tsrhtf and leave the have's to it with their overpriced shoe boxes and mountains of debt. I dare to say I'm not the only one.

Sunday, October 25, 2009 11:50AM Report Comment
 

28. Lucas said...

Here again Brown is demonstrating his sheer ignorance of macroeconomics. If the aim was to really to stimulate the economy (instead of giving the false illusion that something is being done), then they would have cut taxes for the basic rate and here's why. Private consumption has a large multiplier effect where as government spending has very little.

Any kid with a GCSE grade E in economics knows this!

Sunday, October 25, 2009 12:33PM Report Comment
 

29. shipbuilder said...

The problem I have with the NWO arguments which was exemplified by this link is the obvious attempt to try and make links between unrelated 'evils' that coincidentally happen to be the bugbears of American conservatives, so we get things like celebration of US economic dominance on one hand, but then, hold on, the corporations that brought this about are evil and part of the globalist cartel. The greens are evil with their zero growth suggestions, but somehow in bed with the corporations who have consistently fought every single green policy since the dawn of time and only exist because of the pursuit of economic growth. Successive governments for decades are in on this monopolisation, apart from presumably Regan's free-market policies....
While there is plenty of truth in there - global corporations and the banks effectively getting what they want, power and money, exploiting markets and resources without opposition, the idea that this somehow ties in with environmental ideas of preserving nature, seeking alternative economic models and reducing resource exploitation - in fact, everything that they have been in polar opposition to, is laughable.
Global corporations and their buddies in government want ever increasing markets, free reign to exploit resources, maximise profit, destroy the competition and hang the long term environmental considerations. They can't wait until third world populations are rich enough to buy their products. There are simply too many inconsistencies to make this argument convincing, i'm afraid.

Sunday, October 25, 2009 12:50PM Report Comment
 

30. shipbuilder said...

A couple of examples - in one clip you'll hear it lauded, rightly, that in times past, corporations were only allowed to form if they could demonstrate that they would benefit the people, until an evil member of the elite put a stop to it. In another clip we are told that the same elites are trying to destroy the free markets. Try and imagine the reaction of free-marketeers if such restrictions were proposed now....
In another clip you'll hear, quite rightly, that global corporations work beyond borders and above laws. Then you'll be told that these corporations exist in the same conspiracy as a man who, it claims, wants to destroy industrialised society and pull down the factories in a fit of environmentalism. The factories belonging to the corporations?
But by all means watch the link and see for yourself.

Sunday, October 25, 2009 01:37PM Report Comment
 

31. crunchy said...

22. shipbuilder

Thanks for watching. I cannot expect any more than that. I said in another link that I am not going to argue on this one, so I shall keep to

my word. Thanks.

Sunday, October 25, 2009 02:45PM Report Comment
 

32. rumble said...

If only these people would do some homework before producing such tripe.

"Fall Of The Republic documents how an offshore corporate cartel is bankrupting the US economy by design. Leaders are now declaring that world government has arrived and that the dollar will be replaced by a new global currency.

President Obama has brazenly violated Article 1 Section 9 of the US Constitution by seating himself at the head of United Nations' Security Council, thus becoming the first US president to chair the world body."

Three sentences in and they've demonstrated dramatic stupidity.

Sunday, October 25, 2009 08:44PM Report Comment
 

33. goweresque said...

Labour will force the BoE to continue QE until the election, so as to prevent a bond strike, and an IMF type humiliation, which would finish Labour for good as a party of government. If they can hang on til the Tories take over, all the subsequent problems can be blamed on them, however much we all know its Labour's fault. They are ruining the country for personal & party gain. Treason in my mind.

Monday, October 26, 2009 12:59AM Report Comment
 

34. crunchy said...

32. rumble

Perhaps you should watch the Obama sections again.

Monday, October 26, 2009 08:55AM Report Comment
 

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