How will Quantitative easing help the UK economy

I don't know much about economics and I have done a lot of reading on the internet about Quantitative easing. I have one question which I hope you maybe able to help me with.

How does Quantitative easing help the UK economy?

I don't know what it is either so i'd like to learn.


New Member Here

To the post above where about in the east mids you from.

There was a thread earlier that I'm unable to find now, that had this link on it.

It might be a starting point only for you


www.thesun.co.uk...

right i think i have the point basically its : Add more money to the banks to help increase money flow with taxes ect which help fund the govenment.

May i ask if this is not real money is this not what got us in to the trouble giving out more than we have ?

Thanks for your post, i understood the page tho it might seem from my reply that i did not.

A couple of things at work here...

1) Interest Debt based Fiat Currency is created from thin air using you/your property/your resources/your country as collateral for future payment to a central bank.

2) From the first cent borrowed/issued from the central bank, it can never be totally repaid (eternal compounding debt)

3)Q.E.-Printing/Issuing/buying your own debt dilutes the current circulating total, making it less valuable and creates more interest on the total principal in circulation, which usually leads to inflation in the long run.

Not a good thing...

oh right thanks, i understand now.

i just dont see how the govenments see how it would work. instead of gambling shouldnt they play it safe somehow

The thread is here

Wad's it all about? UK To Inject £100 BILLION

I was going to post there but
a) I didn't want to derail it
b) I thought some people might dismiss the thread because it was an article from The Sun

reply to post by thecrow001

i just dont see how the govenments see how it would work

This is the reason I started the thread, because I can't see how it will help long term.

BTW I am in North Northamptonshire

reply to post by Hx3_1963


Thank you for your imformative reply.

There will be an election in UK before June 2010 and the current government is very unlikely to be re elected.
I think they are doing it as a short term fix, knowing they won't have to deal with the later problems.

But I cannot find a good reason for it to be done, it seem most people think it's a bad idea.

i just dont see how the govenments see how it would work

The problem is that a large amount of the money will go to filling the toxic asset gap. The rest will be available for loans but banks will be tighter with lending until the recession eases and governments need to prop them up because banks cannot be allowed to collapse without starting a cascade of disappearing customer deposits and an ultimate descent into being a 3rd world country overnight.

This is why the governments have to start from the banking end before moving on to economic stimulus plans.

Check out the "Gloomy" thread posted in my signature. It points out the bad idea of stimulus bills.

In my opinion these legislative measure will only make these things worse.

Very good reading thanks for the post this next question is a little of topic but i was made redundent 1 week before christmas at only 18 you think i'll be ok but i dont have experience that employers want.

However everytime i go to the job centre i think about 3 times a week i see that its getting more and more crowded, now i know that Dole money is funded by the govenment from peoples taxes however i wonder how many millions of unemployed can it take living of the Job seekers allowance untill we dont have enough people working to pay for this ?