[U.K] Bank begins printing money

[U.K] Bank begins

www.guardian.co.uk

Alarmed by signs Britain's malfunctioning banking system is starving consumers and businesses of credit, chancellor Alistair Darling yesterday gave Threadneedle Street clearance to begin creating money - the last-gasp measure used by Japan to end a decade of recession and deflation.

(visit the link for the full news article)



[edit on 6-3-2009 by passenger]

THe beginning of the end for the U.K. Anyone there ever take a look at the Weimar Republic, Zimbabwe (recently), et al?

This can only bring about inflation and devaluation of British currency. This "last-gasp" measure is surely an ominous sign for everyone in the U.K.

If other follow suit - and they will - the world's economy is surely going to collapse.

www.guardian.co.uk
(visit the link for the full news article)

Well, if you have a look in another Guardian article, this was certainly done beofre (as you well note) , and it might work.

Did it work?

Opinions are mixed: on some analyses (including those of arch-monetarist Milton Friedman in his book The Great Contraction), the Fed's 1930s efforts were crucial to dragging the economy out of the Great Depression. Japan's efforts were widely regarded as too late, coming after many years of pain, but the Bank of Japan is now at it all over again, as the Japanese economy hurtles into a severe recession.

Paper money amounts to a VERY VERY small fraction of currency in the world. The great majority of it is electronic funds held in worldwide banking systems. Today, they could print up to double the cash, it wouldn't do so much to de-value the currency, EXCEPT in that it will definately cause panicked reaction from, as the Governator put it, "Economic Girly Men".

it isnt "printing" paper money is it? Its all to do with "electronic" money in the form of bonds

reply to post by blueorder


From what I have read, that is what they are doing. They aren't technically 'printing money' they are 'electronically creating it' to alleviate the current crisis, but IMO anyone with half a brain can see that this is a short term move, once the money becomes fluid, it will flood the market and cause more problems.

Yet again, another attempt at 'sinking the ship', from what I can see.

EMM

[edit on 6-3-2009 by ElectroMagnetic Multivers]

it was money printing that caused this problem in the first place....

This is the end of the sterling, soon they'll say "we can't fix it" and we'll have to move to the euro. the grand plan unfolds.

Originally posted by spitefulgod
...
This is the end of the sterling, soon they'll say "we can't fix it" and we'll have to move to the euro. the grand plan unfolds.

Don't believe in that for a second. The Eurozone does not need a bankrupted pound. They could have certainly used a strang pound , and a strong UK economy. By these days the Eurozone is filled with bankrupted economies as it is. They certainly do not need another one to make the Euro even weaker.

reply to post by jmlima


The main goal of all this is currency consolidation.

The levels of quantitative easing (money printing) aren't a concern just yet IMO.

They've announced about £75bn, and another £75bn. This will just about compensate for the wage losses in this year, and the writedowns, negative equity quotient etc.

If they start printing any more than £500bn at a go, that will mark the start of hyperinflation.

As it stands, I support this measure. Whether I like it or not, we have a fiat currency, so we might as well use it to our benefit.

This will slaughter the sterling in the forex markets though. Domestic PPP should remain stable.

Originally posted by spitefulgod
reply to post by jmlima

 

The main goal of all this is currency consolidation.

Might very well be, but only if you ignore the fact that Britain is Britain, and not France or Germany, hence, any mention of joint coinage or joint anything with the rest of Europe, would meet more social unrest than any bankrupcy of the British economy. I can almost see the housing estates rising in unison with the BNP. heck, even the plugs have to be different, or the 'beloved' (in the words of the Daily Mirror) British lightbulbs.

Yeah well if there looking to bring in the Euro.
Destroying the pound would be a good start wouldn't it.

Originally posted by jmlima

Don't believe in that for a second. The Eurozone does not need a bankrupted pound. They could have certainly used a strang pound , and a strong UK economy. By these days the Eurozone is filled with bankrupted economies as it is. They certainly do not need another one to make the Euro even weaker.

the weak pound could well be a blessing for us Brits, making exports cheap and encouraging inward investment/purchasing- also our ability to act quickly and decisively on rates, unlike those tied to the euro is a plus in my opinion

Originally posted by dashen
Paper money amounts to a VERY VERY small fraction of currency in the world. The great majority of it is electronic funds held in worldwide banking systems. Today, they could print up to double the cash, it wouldn't do so much to de-value the currency, EXCEPT in that it will definately cause panicked reaction from, as the Governator put it, "Economic Girly Men".

Ohhhhhhhhhhh! They're printing electronic funds! OK, you limey Brits are SCREWED!, stock up on fish and chips laddies, this may be the end of the beginning.

Goodbye to the Quid tbh.

I absolutely detest this pack of thieves and liars with every ounce of my will.

On the front of the papers it announced a £150 billion slush. That's 7% of Britains GDP. That is effectively the same as a government agent walking up to you with your £100 paycheck and taking £7 from you before tax, NI, or any other outgoings, simply because some rich #wits have #ed up and now I have to pay my own hard-earned money to compensate.

I swear, when the revolution comes and there is chaos all across this country, when police aren't doing their jobs because the money isn't worth the paper it's printed on, I'm going to find them, one by one, and put their heads on pikes outside of the Tower of London, to show them just what fruits the labours of treason bring.

You can’t do this (print money) and expect to maintain a stable currency! It’s been proven over and over again. While yes, all governments do this from time to time, it has to be very limited and in-line with limited economic adjustment. It is to be used very carefully to fine tune an economy - not as a 'last gasp' ,easure.

The problem is that once a downward spiral starts in currency devaluation, it’s hard to stop. More money means higher prices, demanding higher wages, demanding more money, ad nauseum. Again, the historical proofs abound. Printing money leads to further depression of the economic system.

Economies are not static, they have natural ups-and-downs. Trying to prevent or mitigate a down by this method is tantamount to fiscal suicide. This attempt is not a solution – it is taking poison to cure a cold.

yep. I read article today that it is exactly the way they started in Zimbabwe. and the rest of the story can be easly predicted. sorry UK folks.

Originally posted by jmlima

Might very well be, but only if you ignore the fact that Britain is Britain, and not France or Germany, hence, any mention of joint coinage or joint anything with the rest of Europe, would meet more social unrest than any bankrupcy of the British economy.

Very true, that is why, IMO, they are completely trashing the economy, if it is destroyed, then people will panic and they will grab any lifeline they can get to keep hold their way of life and they will have it, only it will mean a global currency (or the best they can get).

Reply to 44soulslayer:
They've announced about £75bn, and another £75bn. This will just about compensate for the wage losses in this year, and the writedowns, negative equity quotient etc.

If they start printing any more than £500bn at a go, that will mark the start of hyperinflation.

I would agree with you on that at the moment, although it is a worrying move, maybe they're just testing the water, otherwise it could be blatantly obvious what they are trying? Id unno, just guessing.

EMM

[edit on 6-3-2009 by ElectroMagnetic Multivers]

Originally posted by The Last Man on Earth
I absolutely detest this pack of thieves and liars with every ounce of my will.

On the front of the papers it announced a £150 billion slush. That's 7% of Britains GDP. That is effectively the same as a government agent walking up to you with your £100 paycheck and taking £7 from you before tax, NI, or any other outgoings, simply because some rich #wits have #ed up and now I have to pay my own hard-earned money to compensate.

I swear, when the revolution comes and there is chaos all across this country, when police aren't doing their jobs because the money isn't worth the paper it's printed on, I'm going to find them, one by one, and put their heads on pikes outside of the Tower of London, to show them just what fruits the labours of treason bring.

The treason is manyfold, from abandoning our borders, from the leftist/liberal elite debasing our society since the 60s and for the surrender to the EU