Quantitive Easing

#1
We are facing unconventional problems. So, the argument goes, we need unconventional solutions.
"The UK is following Japan, but hopes to avoid the same results
The Bank of England's latest plan is, in effect, to underwrite the risks of the whole financial system. The series of measures, known as quantitative easing, are more than Plan B. They are Plans C to Z.

The new idea is for the Bank to buy government debt, bringing down the cost of borrowing over the long term and also providing extra money for banks to lend on to consumers and stimulate economic growth.
We are in new territory because as it approaches zero, the interest rate that the Bank normally uses to control monetary policy becomes useless. "

My my, Nue Labour has decided to open the Taps and Print money to pull Dear Gorden, who is still in denial, out of the Karsi he has dropped us all in.
A new inovative method frirst tried by the old Riech Bank and beloved of Comrade Bob.
For the younger board members I remember the inflation of the 70's the last time Labour played Fun and Games with the economy.
In 67 I could buy 16 pints of best Bitter for a quid by end of 70's I was just Bitter.
john
 

Biped

LE
Book Reviewer
#2
This, the government that has dumbed down our educashun system so much that GCSE's, A levels and degrees are at risk of becoming worthless, and a government that is removing much of the history of the world from the school curriculum . . . . a government for which the lessons of history will be meaningless.
 
#5
It's the only way the government can pay back it's debts. Someone gives you a loan of money, you simply print more to pay them back. Hyperinflation here we come (bankrupting all our creditors in the process).
 

Command_doh

LE
Book Reviewer
#6
Oh right, so my thread on this subject from about 8 hours ago got totally deleted then?

Nice, thanks for the lack of explanation. I get some newly registered (most likely 2nd account) tw@t flaming me because I called him a spamming fcuktard - which he was, and helpfully decided that all T.A. were Walts - and my entire thread gets binned, with no explanation, and not even moved to the Hole.

Whinge over.
 
#7
Command_doh said:
Oh right, so my thread on this subject from about 8 hours ago got totally deleted then?

Nice, thanks for the lack of explanation. I get some newly registered (most likely 2nd account) tw@t flaming me because I called him a spamming fcuktard - which he was, and helpfully decided that all T.A. were Walts - and my entire thread gets binned, with no explanation, and not even moved to the Hole.

Whinge over.
But you're not bitter. :wink:
 

Command_doh

LE
Book Reviewer
#8
TheBigUn said:
Command_doh said:
Oh right, so my thread on this subject from about 8 hours ago got totally deleted then?

Nice, thanks for the lack of explanation. I get some newly registered (most likely 2nd account) tw@t flaming me because I called him a spamming fcuktard - which he was, and helpfully decided that all T.A. were Walts - and my entire thread gets binned, with no explanation, and not even moved to the Hole.

Whinge over.
But you're not bitter. :wink:
No, I'm just off to torture some fluffy bunny rabbits and rape some old people. Well, thats a normal day really, but I was a tad 'miffed' (in a metrosexual way, no less).
 

Command_doh

LE
Book Reviewer
#9
Yes.

I believe I said something along the lines of "Yes, they (BOE) may not start printing money at first, but that won't last long. Then we will have (before long) the introduction of the £1bn pound note, have to queue 2 days to buy an egg for £100,000 down the market, whilst all the time Uncle Bob is laughing at the irony of it all whilst shovelling his £100,000 birthday cake into his gob over in Rhodesia".
 
#13
As noted, in countries experiencing hyperinflation, the central bank often prints money in larger and larger denominations as the smaller denomination notes become worthless. This can result in the production of some interesting banknotes, including those denominated in amounts of 1,000,000,000 or more.

By late 1923, the Weimar Republic of Germany was issuing two-trillon Mark banknotes and postage stamps with a face value of fifty billion Mark. The highest value banknote issued by the Weimar government's Reichsbank had a face value of 100 trillion Mark (100,000,000,000,000; 100 billion on the long scale). One of the firms printing these notes submitted an invoice for the work to the Reichsbank for 32,776,899,763,734,490,417.05 (3.28×1019, or 33 quintillion) Marks.[10]
The largest denomination banknote ever officially issued for circulation was in 1946 by the Hungarian National Bank for the amount of 100 quintillion pengő (100,000,000,000,000,000,000, or 1020; 100 trillion on the long scale). image (There was even a banknote worth 10 times more, i.e. 1021 pengő, printed, but not issued image.) The banknotes however didn't depict the number, making the 100,000,000,000,000 Zimbabwean dollar banknote the world's leader when it comes to depicted zeros on banknotes.
The Post-WWII hyperinflation of Hungary held the record for the most extreme monthly inflation rate ever — 41,900,000,000,000,000% (4.19 × 1016%) for July, 1946, amounting to prices doubling every thirteen and half hours. However, recent figures (as of 14 November 2008) estimate Zimbabwe's annual inflation rate at 89.7 sextillion (1021) percent. [11]
One way to avoid the use of large numbers is by declaring a new unit of currency (an example being, instead of 10,000,000,000 Dollars, a bank might set 1 new dollar = 1,000,000,000 old dollars, so the new note would read "10 new dollars".) An example of this would be Turkey's revaluation of the Lira on January 1, 2005, when the old Turkish lira (TRL) was converted to the New Turkish lira (YTL) at a rate of 1,000,000 old to 1 new Turkish Lira. While this does not lessen the actual value of a currency, it is called redenomination or revaluation and also happens over time in countries with standard inflation levels. During hyperinflation, currency inflation happens so quickly that bills reach large numbers before revaluation.

Some banknotes were stamped to indicate changes of denomination. This is because it would take too long to print new notes. By time the new notes would be printed, they would be obsolete (that is, they would be of too low a denomination to be useful).

Metallic coins were rapid casualties of hyperinflation, as the scrap value of metal enormously exceeded the face value. Massive amounts of coinage were melted down, usually illicitly, and exported for hard currency.

Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

Outright lying in official statistics such as money supply, inflation or reserves.
Suppression of publication of money supply statistics, or inflation indices.
Price and wage controls.
Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or something similar.
Adjusting the components of the Consumer price index, to remove those items whose prices are rising the fastest.
None of these actions address the root causes of inflation, and in fact, if discovered, tend to further undermine trust in the currency, causing further increases in inflation. Price controls will generally result in hoarding and extremely high demand for the controlled goods, resulting in shortages and disruptions of the supply chain. Products available to consumers may diminish or disappear as businesses no longer find it sufficiently profitable (or may be operating at a loss) to continue producing and/or distributing such goods, further exacerbating the problem.


wiki
 
#14
Oil_Slick said:
I expect the Pound to be worth less than a Euro within days…


Nice one Gordo… you Scottish Fvcktard! :evil:
You're assuming that the Euro will survive this year. Gold and diamonds are the place to go. Mrs. Angular thinks I buy her jewellery because I love her :roll:
 
#16
tattybadger said:
Mr_Deputy said:
We've not gone that far just yet.
but what does this mean (in real terms for savers etc) and is it the tip of another terrible economic iceberg?
This link almost answers your questions:

http://news.bbc.co.uk/1/hi/business/7924506.stm

In short, if it works, it brings the economy back onto an even keel, which in turn allows you and me to stop flapping like a tap dancer's fannny about the next couple of years.
Excellent.
Or should we be flapping faster than a hummingbird on speed?
I don't pretend to be a financial genius but I understand enough to be a bt worried.
Its not all bad news, interest rates mean the mortgage has reduced (although we are using some of that reduction to make bigger repayments) but inflation is a problem. Despite the official figure of 3% food inflation is running at 9% and utilities costs are a bloody joke.

As far as I can see quantative easing is actually a euphamism for playing Russian roulette with the economy.
Surely the answer to this mess would be to reduce spending waste rather than borrowing and printing money to carry on chucking away cash by the billion?
I struggle to believe that the answer to financial meltdown is to conjure cash out of thin air. Can't speak for the rest of you but I'm thoroughly pissed off, Mr Brown has managed to pish away just about everything at our expense, now he forces us to pay too put it right.
 
#17
Printing money? isnt that what Germany did before hyper inflation...isnt that what zimbabwe did before uber inflation (and being forced to use US dollars) man this sounds like a good plan :p
 
#19
Now i don't pretend to be and economist by any stretch of the imagination, but wouldn't it have been a better idea, so spend at least part of the money that has been spent re-capitalising banks etc, on paying our mortgages off.

My point being pay off my mortgage and I have more disposable income to spend and put into the economy, the very premise of quantative easing is to get more money into the economy, would it have been such a big deal if we had let a couple of banks go to the wall

Please feel free to put my right like I say I am in no way an economist.
 
#20
ExplodingTrousers said:
It seems that the money supply has been growing substantially without the benefit of this 'easing' anyway:
Exactly - thats part of the reason we're in this mess. So QE increases the money supply to allow borrowing to purchase overpriced assets 8O

The govt has to be seen to be doing something otherwise it would be seen as superfluous. It might work short term but in the long term I don't think so. All they are doing is postponing the pain and sentencing future generations into debt slavery. I'm so depressed now I'm off to buy some more silver to cheer myself up.
 

Latest Threads

New Posts