Bank of England to engage in anther round of Printing Money out of Thin Air

Cassandra Syndrome

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The Madness continues.

The Bank of England will increase its emergency bond-purchase plan by 100 billion pounds ($160 billion) to aid the economy as the government cuts spending, the Centre for Economics and Business Research said.

The central bank will also keep its benchmark interest rate at a record low of 0.5 percent until at least “late” 2012, the London-based group said in an e-mailed statement today. The bank kept its stimulus plan at 200 billion pounds this month.

Britain faces the largest public spending cuts since World War II as the government tackles the record budget deficit. The British Chambers of Commerce earlier this month backed a call by policy maker Adam Posen for the central bank to expand its bond stimulus plan as recent data indicate the recovery has slowed.
BOE Will Increase Bond Plan by 100 Billion Pounds, CEBR Says - Bloomberg.com

Quantitative Easing cannot end. For if it does it will simply reset back to the purpose it was first required.
 
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Christ I wish I could print some money like they do when times are hard.

Cass, if the Fed and the Brits start the printing press yet again what do you see the end results being? Last time it appears they both managed to gain some borrowed time, and it looks like there going to do it again surely it cant be this easy?
 

Ulster-Lad

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The British pound should be near parity then with the Euro after the printing.
 

Ulster-Lad

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I hope that start printing before Xmas then!
Ahh, you're thinking we may actually have some money to spend at Christmas. Maybe a little journey to the North ;) I think not. Would be nice though.
 

Cassandra Syndrome

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Cass, if the Fed and the Brits start the printing press yet again what do you see the end results being?
Don't forget the milk this time love....

 

Cael

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DCon

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Having my salary linked to inflation seems like a good thing!!
 

ocoonassa

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I'm really failing to grasp central banks.

OK so this one printing more money and that inflates the supply, but what I don't get is how that is any different to getting a loan from a regulated bank. Surely that process is inflating the supply all the time. Either way it seems like none of the money exists except as debt and then people have to pay interest on it. That can't be right can it?

I wish there was some decent laymans explanation out there about central banks but all there seems to be is stuff that sounds like conspiracy theory. I'm confused. I read Wiki and some of its references but its all full of jargon I don't really grasp. Anybody got any links?
 

eoghanacht

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I'm really failing to grasp central banks.

OK so this one printing more money and that inflates the supply, but what I don't get is how that is any different to getting a loan from a regulated bank. Surely that process is inflating the supply all the time. Either way it seems like none of the money exists except as debt and then people have to pay interest on it. That can't be right can it?

I wish there was some decent laymans explanation out there about central banks but all there seems to be is stuff that sounds like conspiracy theory. I'm confused. I read Wiki and some of its references but its all full of jargon I don't really grasp. Anybody got any links?
*psst*

Money doesn't exist. It's just a promise written on a note.
 

Furze

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So when does this inflation hit ? Appears fairly subdued after QE1.
Better buy a few swiss franc although they will probaly have to join in.

Is oil the key that will feed the required inflation ?
 

eoghanacht

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So when does this inflation hit ? Appears fairly subdued after QE1.
Better buy a few swiss franc although they will probaly have to join in.

Is oil the key that will feed the required inflation ?
Maybe but war will be the 'pressure valve'. Nothing better than a good old war to shake an economy back to life.
 

Breadan O'Connor

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I'm really failing to grasp central banks.

OK so this one printing more money and that inflates the supply, but what I don't get is how that is any different to getting a loan from a regulated bank. Surely that process is inflating the supply all the time. Either way it seems like none of the money exists except as debt and then people have to pay interest on it. That can't be right can it?

I wish there was some decent laymans explanation out there about central banks but all there seems to be is stuff that sounds like conspiracy theory. I'm confused. I read Wiki and some of its references but its all full of jargon I don't really grasp. Anybody got any links?

As I understand it your grasp of what happens is spot on. Money is created as debt.

This link gives a good explanation of QE and credit expansion by banks IMO by Youngdan from his own website. http://www.realirishpolitics.org/home/16-economy-/39-understanding-inflation

You can even join his discussion forum if you want.
 

ocoonassa

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*psst*

Money doesn't exist. It's just a promise written on a note.
But surely the money is meant to represent real actual concrete value. There has to be value of some sort behind it, no? When they're just printing money and making loans where is the value coming from? Just on the promise to repay the loan? Either I'm getting this all wrong or this monetary system is a scam of epic proportion.
 

ocoonassa

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Thanks Brendan I'll check that out
 

Sariel

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QE is just a swap of assets, the central bank is buying long dated bonds from the public thereby lowering the yields and swapping them for reserves at the shorter end of the curve. It does lower interest rates at the so called investment rates but then again it takes income from people who are dependent on the interest.

I think 0 interest rates is deflationary. The whole thing is misguided because the central banks think banks need reserves before lending. It's just a con.
 


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