pork pie
New member
They are in a way. It is called quantitative easing. If you are talking about actual cash? That would without doubt result in hyper-inflation.
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If everyone is so skint, why can't the Government just print more money? Discuss!
- Thread starter Box of Frogs
- Start date
They are in a way. It is called quantitative easing. If you are talking about actual cash? That would without doubt result in hyper-inflation.
I am firmly in the bring on inflation camp, start up the printing presses! The last time we had it I had 25% pay rises, and my house went from being valued at £9000 up to £80000, at least that made me feel good. I was able to clear my debts, mortgage paid off in 7 years (bear in mind I had a mortgage that was 9 times my income at the start). It was the start of a comfortable life. Inflation is almost always here anyhow so if it works for you all the better. So here is some advice, put your money (if you have some) in things that move with inflation i.e Houses, Antiques, Stocks and shares Do not leave in bank or Building Societies more than you need for current use (my mother inherited £500 in 1954 and put it in building society it stayed there until she died and had grown to £1000. My father had asked her to use that money to buy a detached house at that time (1954) costing £500.
Over time she had made £1000 the house she could have bought had risen to being worth £350,000), only retain cash to level of needed.
The current mess in my opinion can only be solved by inflation, this is the historical solution. The Romans did it our Kings did it (Good old Henry V111) In the end the alternative leads to unemployment, starvation, suffering, revolution....fill in the dots.
Anyhow now for the serious business, looking forward to Hull tomorrow.
Over time she had made £1000 the house she could have bought had risen to being worth £350,000), only retain cash to level of needed.
The current mess in my opinion can only be solved by inflation, this is the historical solution. The Romans did it our Kings did it (Good old Henry V111) In the end the alternative leads to unemployment, starvation, suffering, revolution....fill in the dots.
Anyhow now for the serious business, looking forward to Hull tomorrow.
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,850
no they don't, they are perpetuting a myth. the very essence of the problems in banking stem from the fact they cant obtain credit. if they could create money as claimed, then could lend themselves out of the problem. only the central bank can create money that doesnt otherwise exist by literally printing (old fashioned and inflationary) or this new wheeze of qunatitve easing, buying back bonds, which isnt inflationary, as it sits on the banks balance sheets, gets lent back out to other banks or back to the government for new bonds. this in turn lower yields and makes other lending, ie to businesses, more attractive, so they can borrow and invest. well, so goes th theory. note, the ECB isnt allowed to do this so cant and Greece doesnt have a central bank so cant print or do QE either. it needs someone else to stump up the cash to cover it and its local commercial banks debts (which are essentially the same thing since they lent the government their money, but now its not paid back, its not worth anything. the balance sheet shrinks, but they have to hold certain reserves, so need to borrow to cover operational requirements).
really government does control the quantity of money in circulation, they set the policies for the central banks follow and the legislation and regulation for the banks. problem is they like to spend and keep people sweet, so have pursued policies that allow loose monetary control and been profligate fiscally too. all this was supposed to be funded by some new ecomonic wizardy, but really its just been built on asset price bubble along with a flood of cheap credit from oil exporters and China who find themselves with an awfull lot of our cash and wanting to invest it somewhere. money is created by adding value as it circles this great merry go round, not by a button push loan on a bankers terminal. it is created by dozens, even hundreds of transactions. the same as it ever was, only its done so much quicker now.
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JamesAndTheGiantHead
Well-known member
Isn't money just an I.O.U for gold? As in, money is only worth as much as that countries gold reserves. Otherwise they're just bits of paper.
toostonedtocare
Banned
- Feb 12, 2012
- 211
Someone made a good profit out of your mum's inheritance then.... I wonder who?
Lord Bracknell
On fire
Half Time Pies
Well-known member
Its no myth, what they are talking about is broad money or what the bank of england calls (M4). 'The supply of broad money is determined by transactions between the banking sector (including the central bank) and
the non-bank private sector. When a bank or building society makes a loan to households or companies it automatically creates a deposit — either for the borrower, or for the recipient of the borrowers’ expenditure if the loan is spent immediately (as in the case of purchasing a house, spending on a credit card or drawing on an overdraft facility). More generally, any transaction between the banking sector and the non-bank private sector will involve the creation or destruction of banking sector deposits and will thus affect the supply of broad money'. http://www.bankofengland.co.uk/publications/quarterlybulletin/qb110101.pdf
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,850
what they are doing is taking the technical mechanics of a particular process and mis-representing it. their claim is that when a bank create that deposit, the cash come from nothing, theres nothing else in the system to back that amount until they created it, when in reality they have a cash surplus on the balance sheet to begin with. they explicitly deny banks gain funds from savers or other sources. so why do they bother to attract savers in if they can magic money? why sell bonds or shares to raise capital then?
supaseagull
Well-known member
Not everyone has the luxury of overtime! I don't and haven't had for around 6 years
Sent from my iPhone using the power of Greyskull
sten_super
Brain Surgeon
The issue I have with the current banking system is that, while on paper each entity may have an asset supporting their loans, it's in fact the re-hashing (and re-issuing) of an initial deposit that cannot possibly support the subsequent 'assets' created. One of the reasons that the bailing out of the banks was so expensive, when in GDP and employment terms they represent a relatively small part of the economy, is because they undertake such a massive amount of transactions, which all had to be in effect secured by the government.
To me it seems that the biggest problem with the current system is the one that they are attempting to tackle - that the downside risks to these inherently risky activities had been removed (or, more accurately, were borne by the taxpayer rather than the banks) as the banks were 'too large to fail'. I like to think that, once the risks are accurately shared by those taking the decisions, a 'safer' way of banking may come about. Alternatively, if they want to continue to play silly buggers they can do and we can watch them collapse when things go wrong.
Nottseagull
Well-known member
The Govt. is using QE to deliberately encourage more inflation, because that reduces the value of its long term debts.
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sten_super
Brain Surgeon
This post is so wrong it's difficult to know where to start.
i) It is the Bank of England, not the government, that is undertaking the QE. The two are separate.
ii) If the BoE wanted to encourage inflation there are much more straightforward ways of doing it. In fact the QE done so far has seemed to have a relatively negligible impact upon headline inflation figures.
Nottseagull
Well-known member
The people who borrowed that money (through her building society) to buy property.
To the best of my knowledge we moved off the gold standard some years ago. For a period from the 40s we said the Pound was worth X US Dollars, which were backed by gold. However, since the 70s you can't convert dollars to gold, and money is now basically backed by a government's reputation (in essence at least). This is why you can have vast fluctuations in exchange rates. Essentially they're just bits of paper, and they're worth as much as we perceive they're worth. I mean ultimately gold is just a bit of metal anyway, not much use. Can't eat it, impractical to build shelter from, can't use it to form tools easily (at least compared to other metals). It's all about perception.
JamesAndTheGiantHead
Well-known member
I learn a lot on this forum
Glad to be informative! I had to look a bit of it up because I thought it had happened a hundred years before for some odd reason. Wouldn't make much sense as the main reason for the change was the growth of international money markets, something that really happened in the 20th century.
If everyone's skint they just need to post on the Wolves/Poyet thread to be in with a chance of winning £10. This could help solve the country's problems!
Bold Seagull
strong and stable with me, or...
It's pretty though, and rare. It is only formed by the supernova explosion of certain stars, pretty much starting out as a 'gold gas', this then forms in larger particles forming a 'gold dust' which then starts sticking together with other matter to form a planet, which will be pretty molten to start with. In this molten mess, some of the molten gold forms into pockets and veins, which when cooled doesn't adhere to other stuff very well, and so forms little pockets of metal nuggets that we know as found in mines etc. often in solid rock.
These nuggets are pretty, and girls like to sleep with men who give them some of it, which is pretty much what the worlds economy is built on.
Alex Alex Dawson oo! oo!
Primary data is fact
And Pompey's. If enough of their supporters post on the other thread there could be a fans buy-out.
Oh certainly, and I should have clarified that I get why it is (or at least was) the basis of many economies. Whilst obviously the beauty quantity comes in to play, but it's really the rarity that makes it worthwhile.
Of course the problem with it being rare is well... that it's rare! When you trade directly in gold (or other precious metals) you run out of it at some point. This happened with some silver standard economies during the imperialist days, money was off in the colonies and it it became tricky to get at home (I think Spain had a real issue with this before they switched to gold).
Realistically the only monetary system that doesn't make your head hurt if you think about it too closely is barter. None of this "This piece of paper represents this much wealth" business, you trade something useful for something else useful. Want my pig? You best give me that sheep then, a sheep might come in handy!