If everyone is so skint, why can't the Government just print more money? Discuss!

[Storer 68]

This Happens

Yes, that is a bank note for US$100,000 issued in 1929 by the Federal Reserve in the USA

 

[Storer 68]

and here is a note issued for the Bank of England for £1,000,000

PS - doesn't fit in a cash point!

 

[brunswick]

to the original poster...


err, they do......printed 50bn the other week - to be paid at both ends by the people in austerity, taxes, and then interest on loans.

all a mafia controlled gig people think is sound.

 

[sten_super]

I suspect the OP knew the answer to his question when he asked it.

The QE issued so far hasn't actually put much (if any) upwards pressure on inflation, primarily due to the fact that it was (de facto) given to banks, who chose to absorb it onto their balance sheets rather than actually inject it into the economy, although it's had a negative impact on pensions. If things got really sticky, and it became apparent that UK plc couldn't pay back its sovereign debt then you could see the Bank of England (presumably after being formally re-nationalised) print money for the government to use for debt payments - this was denied to Greece due to their membership of the Euro. Of course you would then get inflationary effects (through exchange rates primarily, assuming that debt is held by overseas entities - although domestic debt holders may be tempted to re-enter the loan market once they'd recapitalised their sovereign debt assets).

 

[The Buttery Biscuit Base]

This Happens

Yes, that is a bank note for US$100,000 issued in 1929 by the Federal Reserve in the USA

These were only printed for use within the federal reserve. They were never to be used within general circulation. I believe they printed $250,000 & $500,000 notes aswell.

 

[airman]

Tories don't like inflation.

Who does?

 

[KZNSeagull]

 

[Kumquat]

Who does?

Tories economic policy which is based on monetarism is specifically geared to avoid/reduce inflation. No-one likes it but the Tories have always targeted it as more important than unemployment. Having said that, they have usually failed to get it to work. Hiking up VAT is a case in point.

 

[Silent Bob]

Who does?

Baloons

 

[Dave the OAP]

the simple answer is the government prints money, called quantative easing and gives it to teh banks so they can lend it to us and charge us for the privaledge...then the banks don't actually lend it to anyone and put it in their vaults so to make the balance sheets look better so their executives can say " look Mr shareholder, I have strengthened the balance sheet, met my target as the share price has gone up, pay me my bonus now".

 

[Half Time Pies]

What effect would the government producing more money have on the economy?

The Bank of England does effectively print money through QE. However According to the Maastricht Treaty, EU member states are actually not allowed to finance their public deficits by printing money. That is one reason why with the newly created QE money the Bank of England buys government bonds from financial institutions (banks), and not directly from the government.

Some economists have suggested injecting newly printed money directly in to the economy. See Steve Keen Video on BBC hard talk who advocates the government printing money to pay off peoples debts: BBC News - Hardtalk - Keen: Government should print money to pay off our debts

 

[El Presidente]

Excellent then we can have a million pound note like they did in Nigeria. Worth f*** all but even so.

This is not the weimar republic.

This is not a love song

 

[El Presidente]

Who does?

People with erectile dysfunction.

 

[happypig]

I'm going to print that and become a millionaire.

Woohoo

 

[tubaman]

What effect would the government producing more money have on the economy?

If your skint, you're skint. Nobody is going to give you extra cash even if the bank of England prints more money. Inflation will rise and anybody left with any savings or those depending on a pension will be left with nothing.

 

[GreersElbow]

What do you think Quantitative Easing to the tune of £325,000,000,000 since March 2009 is then?

Gone straight into Banks who've just left it there, because apparently, this will encourage lending.

What I propose is monetary reform, http://www.positivemoney.org.uk/home-2/ They've got some videos which explain the current monetary system, how it's flawed and their proposals which seek to balance our economy without massive inflation, or massive unemployment (or both)

Admittedly, the current cash injections haven't had much effect on inflation, but people must remember inflation is caused by many factors, and depends on the markets. Increases in oil prices, grain/wheat prices etc worldwide can affect here.



And there'll always be inflation. What we should be worried about is deflation, rapid reductions in prices can have catastrophic consequences on the economy. Sometimes injection of cash into the economy can be good to prevent deflation, which if the economy continues to stagnate and consumer confidence drops is what will happen.

But there's no real cure for this problem unless we have reform. Government should control the quantity in circulation, that way banks can't spring money out of thin air like they have been doing. Some people even suggest returning to the dreaded gold standard.

 

[airman]

Tories economic policy which is based on monetarism is specifically geared to avoid/reduce inflation. No-one likes it but the Tories have always targeted it as more important than unemployment. Having said that, they have usually failed to get it to work. Hiking up VAT is a case in point.

So we're agreed, its a bad thing. No need for Tory bashing.

 

[airman]

Baloons

Ha! Brilliant

 

[Lethargic]

So taking the arguement to the opposite extreme is there any mileage for removing cash from the economy, and not in the dodgy way that was exposed in a recent court case?
We could all do a KLF.

 

[Stat Brother]

A better question would be:-

What if the RBS bank bail out money was given to us, instead?