-:Undertaker:-
06-10-2011, 05:15 PM
http://blogs.telegraph.co.uk/news/danielhannan/100109371/more-money-printing-my-masters-are-you-mad/
More money printing? My masters are you mad?
http://blogs.telegraph.co.uk/news/files/2011/10/2_mill._mark_inflat.23.7.1923_ro891.jpg
The cowardly way for governments to expropriate us
According to the BBC (http://www.bbc.co.uk/news/business-15196078), the Bank of England has decided to 'inject a further £75 billion into the economy'. Who knew it was that easy? I mean, why not inject £500 billion? Or a trillion? According to the BBC's logic, it would surely make us the wealthiest nation on Earth. I can't believe I'm having to write this, but nothing new will be manufactured, invented or developed as the result of this monetary splurge, no services offered, no businesses founded. Rather, the money already in circulation – the money in your bank account, in your purse, under your mattress – will be worth less. The government, in other words, is helping itself to your savings – and, in doing so, is damaging productivity, disincentivising work and weakening the competitiveness of the British economy.
Don't take my word for it. This is what the Bank of England says (http://www.bankofengland.co.uk/monetarypolicy/index.htm#) on its home page:
One of the Bank of England's two core purposes is monetary stability. Monetary stability means stable prices – low inflation – and confidence in the currency. Stable prices are defined by the Government's inflation target, which the Bank seeks to meet through the decisions taken by the Monetary Policy Committee.
The government's inflation target is two per cent or less. The Bank of England has failed to meet that target for the past two years, during which time its forecasts have been massively and consistently wrong. Yet the Chancellor has decided to contract out the future of our economy to the people who brought it to this pass (http://blogs.telegraph.co.uk/news/danielhannan/100108749/printing-money-is-the-last-resort-of-desperate-governments-when-all-other-policies-have-failed).
It's a paradox. If I were to print counterfeit £20 notes and buy goods with them, I'd be perpetrating a fraud: I'd be buying something of real value with something I had magicked out of thin air. Yet when a central bank does the same thing, the half-educated economists (http://blogs.telegraph.co.uk/news/danielhannan/100104337/government-spending-the-looming-crash-and-the-danger-of-listening-to-half-educated-economists) who dominate our universities and television stations nod approvingly and mumble cliches about 'boosting demand'. You can't keep boosting demand without producing anything, for Heaven's sake. That's what got us into this mess.
Often people don't see this as a big issue and find it boring, but its actually quite important. The real reasons we have recessions are because of this very thing at the hands of government and the Bank of England/Federal Reserve - when government has a worthless and debased currency not backed by gold (fiat currencies such as the Pound Sterling, US Dollar and the Euro) then it simply prints more and more of it in an attempt to devalue its way out of problems. The overflow of easy and worthless credit leads to a bubble in which the market then crashes back to real prices, just as we saw in 2008.
Now sometimes this does work as in the case with Iceland, but the reason why recessions actually happen is down to the Austrian Business Cycle (http://en.wikipedia.org/wiki/Austrian_business_cycle_theory) - not the usual drivel we have to endure of 'the bad banks' - its actually bad monetary policy that causes this, something that could be solved by a return to a gold-standard system. I read earlier, George Osborne criticised the last government when it undertook Quantative Easing aka printing money and said that you can't print your way out of a recession - how times change.
Ever heard a family member say 'that used to be X amount when I was your age' - its because of this, and eventually all fiat currencies revert back to what paper is really worth; nothing. But this is just more evidence if needed that this government doesn't have a clue what its doing economically, just like the last one - rather they add to the problems. Prepare yourself for interest rates to continue to rise.
Any thoughts on the fruitless idea of QE?
More money printing? My masters are you mad?
http://blogs.telegraph.co.uk/news/files/2011/10/2_mill._mark_inflat.23.7.1923_ro891.jpg
The cowardly way for governments to expropriate us
According to the BBC (http://www.bbc.co.uk/news/business-15196078), the Bank of England has decided to 'inject a further £75 billion into the economy'. Who knew it was that easy? I mean, why not inject £500 billion? Or a trillion? According to the BBC's logic, it would surely make us the wealthiest nation on Earth. I can't believe I'm having to write this, but nothing new will be manufactured, invented or developed as the result of this monetary splurge, no services offered, no businesses founded. Rather, the money already in circulation – the money in your bank account, in your purse, under your mattress – will be worth less. The government, in other words, is helping itself to your savings – and, in doing so, is damaging productivity, disincentivising work and weakening the competitiveness of the British economy.
Don't take my word for it. This is what the Bank of England says (http://www.bankofengland.co.uk/monetarypolicy/index.htm#) on its home page:
One of the Bank of England's two core purposes is monetary stability. Monetary stability means stable prices – low inflation – and confidence in the currency. Stable prices are defined by the Government's inflation target, which the Bank seeks to meet through the decisions taken by the Monetary Policy Committee.
The government's inflation target is two per cent or less. The Bank of England has failed to meet that target for the past two years, during which time its forecasts have been massively and consistently wrong. Yet the Chancellor has decided to contract out the future of our economy to the people who brought it to this pass (http://blogs.telegraph.co.uk/news/danielhannan/100108749/printing-money-is-the-last-resort-of-desperate-governments-when-all-other-policies-have-failed).
It's a paradox. If I were to print counterfeit £20 notes and buy goods with them, I'd be perpetrating a fraud: I'd be buying something of real value with something I had magicked out of thin air. Yet when a central bank does the same thing, the half-educated economists (http://blogs.telegraph.co.uk/news/danielhannan/100104337/government-spending-the-looming-crash-and-the-danger-of-listening-to-half-educated-economists) who dominate our universities and television stations nod approvingly and mumble cliches about 'boosting demand'. You can't keep boosting demand without producing anything, for Heaven's sake. That's what got us into this mess.
Often people don't see this as a big issue and find it boring, but its actually quite important. The real reasons we have recessions are because of this very thing at the hands of government and the Bank of England/Federal Reserve - when government has a worthless and debased currency not backed by gold (fiat currencies such as the Pound Sterling, US Dollar and the Euro) then it simply prints more and more of it in an attempt to devalue its way out of problems. The overflow of easy and worthless credit leads to a bubble in which the market then crashes back to real prices, just as we saw in 2008.
Now sometimes this does work as in the case with Iceland, but the reason why recessions actually happen is down to the Austrian Business Cycle (http://en.wikipedia.org/wiki/Austrian_business_cycle_theory) - not the usual drivel we have to endure of 'the bad banks' - its actually bad monetary policy that causes this, something that could be solved by a return to a gold-standard system. I read earlier, George Osborne criticised the last government when it undertook Quantative Easing aka printing money and said that you can't print your way out of a recession - how times change.
Ever heard a family member say 'that used to be X amount when I was your age' - its because of this, and eventually all fiat currencies revert back to what paper is really worth; nothing. But this is just more evidence if needed that this government doesn't have a clue what its doing economically, just like the last one - rather they add to the problems. Prepare yourself for interest rates to continue to rise.
Any thoughts on the fruitless idea of QE?