News article on Quantitive Easing
Two tillion quid right? £2000 billion.(anticipates any corrections from maths you boffins out there).
This is the value of bonds that the Bank of England bought from our financially hopeless government – sorry to all you ardent labour supporters, just telling it like it is!
I expect someone to say it was Margaret Thatcher’s fault. They always do, but she was right for our country back in 1979 when unions were holding the country to ransom. Militancy killed our economy! It forced some businesses to run at a loss and seriouslt effected the quality of the products we made then. It even resulted in innocent Britons sitting in the dark when they shut all the mains the power off without any warning! The tail was wagging the dog in those days. Thatcher took on these economic vandals and won. She was wrong on some issues, but was generally right for Britain.
So back to 2009, with all this money sloshing around in bank’s coffers after this massive cash injection, why isn’t credit now freely available? Why aren’t we experiencing a mini housing boom?
I am not an economics expert, but if a commodity is scarce, doesn’t it command a high price? Conversely when there is a plethora of a particular commodity, it’s value decreases doesn’t it?
So if we manufacture 2 Trillion pounds sterling, doesn’t that devalue our currency?
If businesses have a weaker unit of currency, don’t they have to put their prices up?
The net result is that our savings and income will effectively shrink.
As the 0.5% base rate and all this cheap money is not making any difference (we are experiencing negative growth), isn’t inflation going to be a nasty shock when the economy finally turns the corner?
My advice would be to stop spending if you have any debts and get them cleared. Most people have a lot of debt and are scared about their security, so are doing just that.
Measures put in place by Alistair Darling were supposed to encourage us all to keep spending. Seems like totally the wrong thing for an individual to do in the current climate and Darling’s move was an act of desperation.
The cost of this stimulation package is going to hit us in the pocket for at least a decade. It’s clear that the Chancellor’s economic forecasting was at best very poor and he misjusdged a premature recovery in the economy. So the entire exercise appears to have been a waste of our money, but we still have the tax rises to pay for this fiasco yet to come. Tax increases in a deep recession? Nice one Alistair!
Perhaps he will try and borrow even more money. Just how long can you keep patchin holes when new ones keep appearing? Our AAA rating is under threat, so if we do borrow any more money, it will cost us even more.
When is he going to realise that we have to make big spending cuts and stop borrowing money??
Maybe we should have not intervened with all these failing institutions, but this would have resulted in economic meltdown.
The purpertrators of this mess have got off lightly. In some cases they have benefitted whilst the people in the rest of the community have taken a big hit.
I conclude that we are in some deep doo doo.
We need a courageous and competent administration to get us out of this mess.
I am totally dismayed at how the recent MP’s expense fiddles has dominated the news recently. The blatant offenders need sacking and then prosecuting, but the sums involved are chicken feed really.
We need to get back to focusing on the big picture.
Can someone sort it out please, I need to cut the grass! 😀
