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Quantitative easing (credit easing) UK

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posted on Oct, 8 2011 @ 06:46 AM
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Well the chancellor has decided to just "push a button" and create 75 billion from nowhere.
QE



QE involves electronically creating money, which the Bank uses to buy assets – mainly government bonds, known as gilts – from investors in financial markets. That pushes down long-term interest rates – a bonus for the economy – and gives the banks more money to lend out. The Bank doesn't actually print banknotes, it just credits investors' accounts. Its governor, Mervyn King, hates the phrase "quantitative easing" and prefers to call it credit easing.


My mind literally cannot grasp now this happens!!!
If they can just make this amount of money appear - why not do it and pay off some of the defecit, stop the savage cuts, anything else?
As has been said - there is a real chance this extra money gets to the banks from the Bank of England - and just goes to further line the bankers pockets with bonuses or used to speculate on commodities and actually results in pushing up fuel prices and other goods.
This system is so broken it's unbelievable.

This clip sums it up ****warning strong language****

edit on 8-10-2011 by facchino because: (no reason given)




posted on Oct, 8 2011 @ 07:09 AM
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Heh..quantitative easing is literally digital these days. The whole point is to inject money into the economy to therefore stimulate it...but usually it leads to inflation.

Tbh it's a bad move I think. Look at USA. They did that..didn't help..only add to the debt and ooh looky, the economy is flatlining.

That money isn't going to stimulate our markets..it's going to let us grow..we're still going to be the same but just more money to pay off.



posted on Oct, 8 2011 @ 07:22 AM
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reply to post by facchino
 


I'm not ashamed to admit it but I haven't got a clue what it's all about.

Allegedly we are in the mire because there has been too much lending.
So The Bank Of England 'creates' £75billion to give to the banks who in turn will lend the money out.

But I thought it was too much lending that caused this whole sorry mess?

And I thought quantitative easing was generally used when there was the threat of zero inflation or deflation?
Surely we aren't at that stage as everything is getting much dearer.

And there's also a concern about interest rates or something.

I am confused to say the least.

I think it's probably all a ploy to over complicate things and to help the wanker bankers screw us over yet again.
edit on 8/10/11 by Freeborn because: (no reason given)



posted on Oct, 8 2011 @ 07:29 AM
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Originally posted by Freeborn
reply to post by facchino
 


I'm not ashamed to admit it but I haven't got a clue what it's all about.

Allegedly we are in the mire because there has been too much lending.
So The Bank Of England 'creates' £75billion to give to the banks who in turn will lend the money out. But I thought it was too much lending that caused this whole sorry mess?

And I thought quantitative easing was generally used when there was the threat of zero inflation or deflation?
Surely we aren't at that stage as everything is getting much dearer.

And there's also a concern about interest rates or something.

I am confused to say the least.

I think it's probably all a ploy to over complicate things and to help the wanker bankers screw us over yet again.
edit on 8/10/11 by Freeborn because: (no reason given)

I have highlighted a point you made - which I did intend to put in my OP but got sidetracked midway through writing the thread.

You are exactly right. How is lending firms the answer - they cannot pay debts they have already!?
Here we are - David Cameron - calling for all of us to be more responsible with our finances but his chancellor is going against the grain by allowing QE and hoping banks lend more money.
Prime Minister wants us to repay all debt
Its all b***s really isn't it.



posted on Oct, 8 2011 @ 07:31 AM
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reply to post by Freeborn
 


It's all very confusing. Does the government actually make this decision or is it all controlled by the BofE and if so is the BofE a private bank like the Federal reserve? The ruling class's have always had a way with semantics so it's difficult to know exactly what is going on.



posted on Oct, 8 2011 @ 07:38 AM
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reply to post by Freeborn
 


Too much lending to whom?

It isnt small businesses that is for sure. More small businesses are going bust as a result of the Banks withholding money and keeping it on their balance sheets. And paying their employees and directors bonuses.



posted on Oct, 8 2011 @ 07:40 AM
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reply to post by woodwardjnr
 


Well the B.O.E. is meant to be independent and all is it not? Or is that a bunch of lies also? More bail out money for the Banks. If that fails who will be left to foot the bill? Answer. The Tax Payer.



posted on Oct, 8 2011 @ 07:50 AM
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Link here explaining it further
Further explanation

It seems the decision is the governments
In fact here is a video as well - I don't get the part at 0:48
"The bank purchases assets from private sector businesses - including insurance companies,pension funds, banks and non financial firms. Most of the assets purchased are government bonds"

What?!? How are they buying government bonds from private firms? Does this mean that this money is basically going into the govt coffers? ie - just giving the govt this money - not the economy?





edit on 8-10-2011 by facchino because: (no reason given)



posted on Oct, 8 2011 @ 07:52 AM
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reply to post by BlackPoison94
 
I believe inflation is unavoidable with these schemes.

Oil prices are not sky high, but look at prices of just the necessities that we must buy. The govt and their hand maiden MSM are playing the Facts of inflation down, and have been for some time now. If they pushed the truth about it, people would rightly watch their spending, even further dropping economic #'s.

They are afraid to tell us the truth.



posted on Oct, 8 2011 @ 07:54 AM
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Well I reckon inflation rates are simply a lie -one look at my gas and electricity bill tells me so. They will keep including electronics in their calculations to negate the positives. Instead of £200 for a dvd player - I can now get one for a tenner. Whoopie do - but my quarterly fuel bills now equate to a month's salary.

It's quite deliberate of course. Anything that's index linked e.g. pensions will only rise at the rate of inflation. Had inflation been accurately calculated (which it hasn't been since Thatcher's day) this country would have been in crisis decades ago. At least we would have been dealing with reality though and would probably have been forced to sort out smaller problems sooner.

Rather than deal with reality they relaxed credit so that it became the norm...and we shopped ourselves into the illusion of wealth. Anyone else remember the days when it was shameful to buy something on the 'never never'?

They're still evading reality...creating yet more digits.

Edinburgh was packed with tourists this year long before the festival season you couldn't book a hotel room for all the French and Italian tourists. It's 30% cheaper for them to come here at the moment than it is for them to holiday in the eurozone - that's one pro for the present policy. The other is that it's good for our exports - ummm - but they outsourced and closed down most of our manufacturing base so that it now makes up only 10% of our economy.

Why? So we could buy cheap goods,(with built in obsolescence) in line with our poor wage levels.....with our credit cards. Help...stop the merry-go-round I want to get off.




posted on Oct, 8 2011 @ 07:58 AM
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reply to post by butcherguy
 


What I found interesting, I was watching question time on Thursday night, (Knows I am sad yes),
anyhoo, one dude in the audience, made a remark. Instead of giving this money, which isnt real anyways it is electronic, to the banks who will just keep the money on their balance sheets. Why not give vouchers to every citizen in the UK, which would work out to about £4000 per citizen, to spend on food, furnishings etc, or if they need repairs to their home etc. He made the point would that not restart the economy, there would be people being employed to carry out the works etc. Given it in vouchers would not lead to Consumers using the money to pay of their credit cards or debt.



posted on Oct, 8 2011 @ 08:04 AM
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i would love to see QE on a trickle up system instead of sitting at the apex. imagine if everyone, approx 60 million received £1000 to be spent within 3 months with a provision it is used on uk products,bills or mortgage (call me isolationist, i don't care). if there is a round three i would gun for this as after the first attempt at bolstering the economy, nothing really changed. i suspect QE2 will have the same effect.
in the words of max kaiser,' QE- a dog eating it's own vomit.'
fakedirt.



posted on Oct, 8 2011 @ 08:05 AM
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reply to post by AnonymousFem
 


I heard a similar thing - and have also received this email - obviously it is a "joke" email but makes the same sort of point,

A Funny, Hilarious and Thought-Provoking Draft Letter to Mr David Cameron, Prime Minister, UK

Fixing the Economy

Dear Mr. Cameron,

Please find below our suggestion for fixing the UK 's economy.

Instead of giving billions of pounds to banks that will squander the money on lavish parties and unearned bonuses, use the following plan. You can call it the Patriotic Retirement Plan:

There are about 10 million people over 50 in the work force. Pay them �1 million each severance for early retirement with the following stipulations:
They MUST retire - Ten million job openings - unemployment fixed
They MUST buy a new British car - Ten million cars ordered - Car Industry fixed
They MUST either buy a house or pay off their mortgage - Housing Crisis fixed
They MUST send their kids to school/college/university - Crime rate fixed
They MUST buy �100 WORTH of alcohol/tobacco a week ..... And there's your money back in duty/tax.

Instead of playing around with the carbon emissions trading scheme that makes us pay for the major polluters, tell the greedy polluters to reduce their pollution emissions by 75% within 5 years or shut them down.

P.S. If more money is needed, have all Members of Parliament pay back their falsely claimed expenses and second home allowances. If you think this would work, please forward to everyone you know.

If not, please disregard.

Mr Grumpy

source



posted on Oct, 8 2011 @ 08:09 AM
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reply to post by facchino
 


You know what else annoys me, how much do we spend on Foreign Aid, while upping corrupt Governments who violate their own citizens rights. I just think it is ridiculous, that they can spend this amount of money while, people are being made unemployed, Soldiers are being sacked, made redundant. I say claw half of the money back from Foreign aid.



posted on Oct, 8 2011 @ 08:10 AM
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reply to post by butcherguy

Printing more money does lead to inflation in some cases: look at the second world war so much money got

printed in Germany that normal house hold necessities like bread were worth bag loads of the notes...

These days its digital but the effects are the same

I remember seeing a photo of some Germans wallpapering their house with the notes because they were worth so little... of course today its digital.

However I did see a program once called the 'money masters' this show explained how the ebb and flow of the

system isn't as independent as we'd like to think, and that in fact if you look at how much money there is in a

country at any one time ( ie per capita) its the banks that call the shots by pumping and then retracting money

from an economy, pumping means theres a little more to go around, making it a little easier to live (there's a little

bit more money around for everyone to get their hands on), according to the show its when they pull the money

out of the system again that people really feel the squeeze (or recession] and the banks get to take peoples

homes and the like.

Money Masters
edit on 8-10-2011 by Lagrimas because: grammar police



posted on Oct, 8 2011 @ 08:10 AM
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reply to post by AnonymousFem
 
Either way seems bad to me. Here, the Bush Administration sent checks to the citizenry to jump-start the faltering economy.... May work in the very short term, but it is very short.

The problem is that the 'money', whether going to the banks or individual citizens, is created out of thin air.... Or borrowed from China. Either way it is not the way to solve the problem.

You have a good point! Given the option of what to do with the money, since they are going to do it even if it is an economic error, better to put it in our hands than the hands of the banks(which are pur evil, IMO).



posted on Oct, 8 2011 @ 08:13 AM
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reply to post by Lagrimas
 
Good points.

At least the Germans got some use of their worthless notes. We would have a hard time covering our walls with a handful of plastic cards.


edit on 8-10-2011 by butcherguy because: (no reason given)



posted on Oct, 8 2011 @ 08:15 AM
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reply to post by AnonymousFem
 


I agree with the dude in the audience. His idea is much more beneficial. Despite the Milosevic propaganda tactics in this country (think all those location, location, location' programmes etc. Dave and Sam want to buy not one, but two, new houses. A wee work base for him in the city and the country pile for raising the kidie winkies. They have a budget of £750,000.

Despite these programmes running for years I only know one Dave and Sam who could afford that.

There are plenty of people in this country who would benefit from a programme like that. Despite the illusion there are still people in this city (glasgow) who live in houses without baths or showers.



posted on Oct, 8 2011 @ 08:15 AM
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reply to post by AnonymousFem
 


Yes that frustrates me immensely.
We give money to India - who run a space program - because their govt dont deal with the poverty in their country?!
How is that our problem exactly - if they decide they would rather spend money on rockets than rice - why do we have to stick our nose in and send them money.
UK Aid to India
This country is rotten from the top down - MPs, bankers, big companies CEOs etc - all of them are corrupt, dishonest people who should not be allowed to carry on what they are doing.
It's not a democracy when those that are elected can just completely go against what they "pledged" to do upon election is it.



posted on Oct, 8 2011 @ 08:17 AM
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reply to post by butcherguy
 



I think this is relevant to this also, with all the high taxes etc.

Plus with these emission taxes which is also being imposed by the EU. Where I live there is a massive Oil refinery,which has been there for around 40 - 50 years. Even they are threaten en to pack up and leave and move elsewhere across Europe if this tax is imposed. If they left, it would be devastating for the area, not just the surrounding area, much a lot of supply companies who supply the Giant oil Refinery. I would predict over 1000 jobs would be lost and that does not include the contractors, the suppliers and the shopping community would loose a hell of a lot.

Once again if the UK had interpreted the EU Laws in a British way, to suit British Interests then, the Trains contracts which were given to a company in Germany would have been kept in the UK and jobs would not have been lost.
edit on 8-10-2011 by AnonymousFem because: (no reason given)



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