Quantatitive easing

[SweetLeftFoot]

There was a very polished LSE educated Treasury spokesman on Newsnight last night explaining the phenomenon of quantitative easing.

Oh no he sneered, its not printing money.

What is it then asks host?

What the Bank of England does is simply create itself a new line of funding, and uses those funds to buy commercial debt, or (more worryingly) government debt, in order to kick start the economy.

How is that not printing money asks host?

Because, smarms official, no actual new notes are printed, it is just transfers of funds from the new line to the companies/government.

I have informed the Bank of Scotland, my bank, that I’d like them to create me an unlimited new line of ‘funding’. I won’t be taking any of the funds out of the ATM in cash form, instead I’ll just use it to pay bills online and purchase things on my card, so it will be OK then, I won’t actually be spending ‘money’.

I await their reply.

What's your view on 'quantitative easing'?

Me personally, I'm buying a wheelbarrow in anticipation of collecting my pay in about October/November.

 

[Qsaint]

SLF I won't go into the theory but very simplistically its not the extra money printing per se that leads us down the Zimbabwe economic miracle path; but the liquidity of that money. So by not putting the money out there it may not have the same effect