davieG Posted 6 March 2009 Posted 6 March 2009 Anyone care to explain this in layman's language and what effect if any it will have on us plebs
Sir Fynwy Posted 6 March 2009 Posted 6 March 2009 Anyone care to explain this in layman's language and what effect if any it will have on us plebs Quantitative easing is the creation of new money out of 'thin air' by a central bank, and its injection into the banking system. The aim is to increase the amount of deposits in private banks so that, by way of deposit multiplication, they can increase the money supply by increasing debt (lending). (from Wiki) Basically the bank of england raising the amount of cash in the system buy increasing it's own liabilities (debt).
davieG Posted 6 March 2009 Author Posted 6 March 2009 Quantitative easing is the creation of new money out of 'thin air' by a central bank, and its injection into the banking system. The aim is to increase the amount of deposits in private banks so that, by way of deposit multiplication, they can increase the money supply by increasing debt (lending). (from Wiki)Basically the bank of england raising the amount of cash in the system buy increasing it's own liabilities (debt). So as a country we go into more debt in order to help individuals go into more debt, I can't see how that helps. Oh well at least Beckham is staying at AC Milan until the end of the season, that's pretty important and should help.
Sir Fynwy Posted 6 March 2009 Posted 6 March 2009 So as a country we go into more debt in order to help individuals go into more debt, I can't see how that helps.Oh well at least Beckham is staying at AC Milan until the end of the season, that's pretty important and should help. It's supposed to stop deflation and get banks lending again, Japan has done it in the past but they had government surplusses not deficits. It'll be interesting to see how it plays out, UK PLC might just be a dead duck if they mess this up.
breadandcheese Posted 6 March 2009 Posted 6 March 2009 Basically we're following the policies of such economic powerhouses as Zimbabwe or the German Weimar Republic. In my eyes, this quantitative easing is tantamount to theft and expropriation by the Bank of England/Government with the debasing of the pound in our pocket.
Guest Bilo Posted 6 March 2009 Posted 6 March 2009 A woman from the Lib Dems explained this in the most brilliant terms ever last night on Question Time. Apparently our economy is 'constipated' and quantitative easing acts as a kind of laxative. It is needed to get things moving again otherwise the constipation of the UK economy will only worsen. However, we have to be careful not to use much laxative otherwise the British economy will get the shits, much like Zimbabwe. It made me smile anyway.
davieG Posted 6 March 2009 Author Posted 6 March 2009 Basically we're following the policies of such economic powerhouses as Zimbabwe or the German Weimar Republic. In my eyes, this quantitative easing is tantamount to theft and expropriation by the Bank of England/Government with the debasing of the pound in our pocket. So everything is going to be fine then? Whoevers fault it is bet the Tories are glad they're not in power, I can't remember them calling for a snap election just lately.
Guest Bilo Posted 6 March 2009 Posted 6 March 2009 Basically we're following the policies of such economic powerhouses as Zimbabwe or the German Weimar Republic. In my eyes, this quantitative easing is tantamount to theft and expropriation by the Bank of England/Government with the debasing of the pound in our pocket. This. The whole idea just sounds like the act of a government desperately looking for answers. This is an almighty gamble that will go horribly wrong if it doesn't come off.
Monk Posted 6 March 2009 Posted 6 March 2009 'Quantitative Easing' reminds me of the Simpsons episode when Mr Burns is Mayor and he implements a 'temporary rebate' or something along those lines. It's a catchy phrase used to describe a last ditch attempt to get things going. The main problem that the government seem to have is assuming that the whole crisis lies upon credit markets. It doesn't. It lies a great deal on consumer and business confidence which right now is non existent. In my view, UK banks should have been forced to declare what bad assets they had in private to the government back in early 2008, they should have been ring fenced by the government into seperate legal entities and then unwound back to the original mortgages. Then recapitalise the banks with bridging loans in the short term. As a result we could quickly have used the crisis as an advantage in the market place over US banks. The fact that the government LET RBS and HBOS get to the stage where they were about to go under, well over a year after we found out about the bad assets is ludicrous. Pumping money into banks will not work if they are under capitalised. The real danger here is that once the money does eventually reach consumers and businesses that we will see a very fast increase in inflation. I think this is a major risk, particularly with food. The government is in a big big mess now, there is no going back. They pretty much have to sit like lame ducks and wait for this storm to pass. The only problem is that the election may come first. I'm actually disappointed that it has taken this much to bring them to their knees - they were incompetant well before this crisis.
Alexikokopops Posted 6 March 2009 Posted 6 March 2009 I reckon we should just print loads of money. Nothing bad ever happens when Governments do that. Nothing bad at all...
Tabou Posted 6 March 2009 Posted 6 March 2009 Ask Robert Mugabe for advice. Apparently, he has skilllz in this area.
Guest Bilo Posted 6 March 2009 Posted 6 March 2009 I reckon we should just print loads of money. Nothing bad ever happens when Governments do that. Nothing bad at all... Exactly. Who needs charcoal for the barbecue? Let's just use cash like they did in Germany in the summer of '29. That would feel rock and roll.
Alexikokopops Posted 6 March 2009 Posted 6 March 2009 Exactly. Who needs charcoal for the barbecue? Let's just use cash like they did in Germany in the summer of '29. That would feel rock and roll. I'd be able to light my cigarettes with £50 notes and it wouldn't actually cost me anything! TO THE PRINTERS!
davieG Posted 6 March 2009 Author Posted 6 March 2009 I reckon we should just print loads of money. Nothing bad ever happens when Governments do that. Nothing bad at all... What like this: That didn't work either
Monk Posted 6 March 2009 Posted 6 March 2009 I imagine UK will be the next Iceland then! Fleeing the country is still an option you know.
breadandcheese Posted 6 March 2009 Posted 6 March 2009 Exactly. Who needs charcoal for the barbecue? Let's just use cash like they did in Germany in the summer of '29. That would feel rock and roll. If we plant lots of trees, would this not be carbon neutral? Looks like Superman Brown has just solved both the energy and environmental crisis.
cisono Posted 6 March 2009 Posted 6 March 2009 Anyone care to explain this in layman's language and what effect if any it will have on us plebs The term does make me think of a laxative... If I remember well, someone referred to it as "printing monopoly money". Anything but representative money is looking for trouble in my books... From wikipedia: Fiat currency (fiat money) is money that exists because an authority or custom declares it to be money. Historically, societies have relied on monetary systems where currency used in trade was either composed of a physical commodity (such as gold coin—see commodity money) or was exchangeable for a predetermined amount of a named physical commodity, making it a representative money. *** We know what they want to do is stupid and they (ought to) know it's stupid, but if they do, they don't seem to care. I am done ordering stuff from the US then... Though, with the current base interest rate, I might just as well spend all my money, as it does not seem worthwhile saving at all If I spend all my money, I will be penniless in old age and a burden on the government. Is this what they want?
davieG Posted 6 March 2009 Author Posted 6 March 2009 Exactly. Who needs charcoal for the barbecue? Let's just use cash like they did in Germany in the summer of '29. That would feel rock and roll. Fun for the kids Wh needs EON and British Gas?
Guest Bilo Posted 6 March 2009 Posted 6 March 2009 If we plant lots of trees, would this not be carbon neutral? Looks like Superman Brown has just solved both the energy and environmental crisis. That'll be on their manifesto now. And it'll be your fault.
breadandcheese Posted 6 March 2009 Posted 6 March 2009 That'll be on their manifesto now. And it'll be your fault. It's ok, they don't honour their manifesto pledges.
Guest Bilo Posted 6 March 2009 Posted 6 March 2009 It's ok, they don't honour their manifesto pledges. Gives us some more paper to burn at least besides fivers.
davieG Posted 6 March 2009 Author Posted 6 March 2009 So it's similar to buying an LCFC Season Ticket then.
Lillehamring Posted 6 March 2009 Posted 6 March 2009 more importantly, how will this effect the exchange rate and the value/worth of savings? ... @ the peter taylor money.....'knob' = priceless
Babylon Posted 6 March 2009 Posted 6 March 2009 I have a cunning plan.... i'm going to win £85m on euromillions and feck off somewhere else.
Babylon Posted 6 March 2009 Posted 6 March 2009 more importantly, how will this effect the exchange rate and the value/worth of savings? It means us with money over here are fooked.... you on the other hand having your money abroad, will be laughing all the way to the bank when 100 Euros is the same as £43 billions pounds.
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