Posted by jdavis on October 6, 2011
Just a quick note on the £75Bns.
To put it in context:
- In 2009, for QE1, they printed 3 times the amount
- They simultaneously slashed interest rates from 5% to 0.5% – not this time
- They simultaneously massively bailed out huge bankrupt banks – not this time
- This time there are mild cuts in public sector going on – last time there was beefing up of the public sector in advance of the 2010 election
- Last time banks were going bust. This time countries are going bust.
I contend this will do very little both in the short term and the long term bar give the pretence that ‘they’ are doing something.
Obviously, this will help the banks by:
- Creating more money HMG can give to the IMF to bail out Greece
- Along with Germany and the ECB so that
- They all give the money to banks to repay bad debts and create new ones. The banks bank (sic!) their profits on the previous debts and pay massive bonuses on the newly created debts, no longer backed by, say, Greek tax payers but by German, US and UK taxpayers – who can ill afford the obligations.
ANYONE who believes this sorts the problem is deluded. It’s just yet another obfuscation as well as taxpayer rape to help politicians and bankers.
Did you see what happened to Sterling the minute the printing was announced? It plummeted and will continue to do so. Thus, we import even more inflation to our costs of living and of running businesses. Companies will have to raise prices. This will lead to fewer goods and services and fewer employees required.
Hemingway once more – “The first panacea of a mismanaged economy is inflation. The second is war. Both bring a temporary prosperity. Both bring a permanent ruin. But both are the refuge of political and economic opportunists”.