Tuesday, September 28, 2010

People’s faith in the value of paper money has already been shaken to its core

Bank of England policy maker wants to debase the coinage even more

Has Adam Posen, an external member of the Bank of England’s Monetary Policy Committee, gone stark raving mad? In a speech on Tuesday to the Hull and Humber Chamber of Commerce, he advocated another bout of quantitative easing, warning in terms that advanced economies are stuck in a classic liquidity trap which requires further fierce, pre-emptive policy action to get us out. It’s not inflation, but unemployment which is the real challenge for public policy, he insists.

Posted by devo @ 10:34 PM (1609 views)
Please complete the required fields.



13 thoughts on “People’s faith in the value of paper money has already been shaken to its core

  • slartibartfast says:

    I like the way the pompous looking tit chooses the word “debasement”. It’s not like the currency was worth squat in the first place. It’s just coming home to the true low value his comrades at the Banks set up several years ago.

    Now the asses at the Telegraph have got Middle Englands knickers in a twist over their saving (which are already worthless).

    For what? So Banks and Pension Funds can ride out the recession sucking on the Government teat. While the rest of us tighten our belts.

    It might be worthwile to understand how we are being gamed.

    Reply
    Please complete the required fields.



  • slartibartfast says:

    While I’m fired up.

    A liquidity trap is the failure of the neo-liberal free market ideology. Basically, it’s difficlut to stimulate demand if your investment is constrained by profit motive. Chicken and egg thingy.

    Fiscal policy can stimulate demand. Monetary policy doesn’t.

    Reply
    Please complete the required fields.



  • Funny how according to some, we are supposed to be in a deflationary spiral……Well at least you can choose your friends.

    Reply
    Please complete the required fields.



  • 1. slartibartfast

    We have been gamed for years, but this is the end of one form and the beginning of another which people will be pleading for.

    Not enough pain yet. Whenever politicians collectively agree on a plan of action, be afraid, very afraid.

    Reply
    Please complete the required fields.



  • “Chicken and egg thingy” — there is no such thingy, it’s an outdated, primitive philosophical concept much like gods.

    Reply
    Please complete the required fields.



  • Not sure if that was a throwaway comment. But I’m in a serious (try to be helpful) mood.

    If savings are being used to pay down liabillities it’s definitely deflationary.

    QE is inflationary, there’s also excess capacity in some sectors of economy which mitigates inflationary pressures.

    You have to look at the aggregate inflationary effect on the economy. Slightly inflationary for CPI.

    Reply
    Please complete the required fields.



  • Our Merv seems to be losing his grip – all his little helpers are having their fifteen minutes of fame, yet they are not singing from the same hymn sheet..

    ..this is not the tight ship the BoE used to be – I wonder what’s behind this..?

    Reply
    Please complete the required fields.



  • Don’t get you rumble ..I’ve been lurking around for a while, just trying to throw in some fresh ideas…. over my head sorry.

    Reply
    Please complete the required fields.



  • I’m suspecting the austerity surplus budget idea is not sitting well with economists who know what will happen.

    Reply
    Please complete the required fields.



  • Gold has just dropped to $1306 an ounce!

    Is it time to hoard cases of baked beans yet?

    Reply
    Please complete the required fields.



  • general congreve says:

    @9 – Ooooooh Alan, you are naughty!

    Reply
    Please complete the required fields.



  • The pound has been systematically debased since it can off the gold standard. As soon as that happened politicians could buy votes with public spending, debt, tax breaks for whichever group would vote for them or give them fat directorships. Giving a fiat currency to a politician is like giving a bottle of whiskey and your car keys to a teenager. You just know it’s going to end badly.

    Reply
    Please complete the required fields.



  • Slarti, I’m just veering off course.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>