British Government May Start Printing £billions Soon!
There seems little point in reducing interest rates any further as the interest rate cuts are proving to be ineffective and the Bank of England base rate cuts are proving to be unpopular with savers and borrowers. The pound is falling against the dollar and the euro. Savers are not being rewarded for saving their money and interest rate cuts are not being passed on in total to mortgage borrowers and businesses.
Gordon Brown and Alistair Darling are asking us to spend more in an effort to keep the economy afloat. Spending money is the last thing on people’s minds when they fear for their jobs as the recession starts to bite and their first thought is to save for a rainy day.
The Rumour
The British government may be considering printing more money to boost the economy and to ease the banking freeze on lending to borrowers. Quantitative easing was last used by the Bank of Japan between 2001 and 2006 to fight domestic deflation. This policy did not succeed in stopping deflation and scholars cannot agree whether the actual technique actually worked. In Zimbabwe President Robert Mugabe has been printing money for years with horrific results. Printing money is a remedy of last resort and should only be used in extreme situations as it causes inflation!
Alistair Darling the Chancellor of the Exchequer does not like the term ‘Printing Money and he has said that the treasury is looking at other ways to stimulate the economy. The Chancellor has said that if the government was to use quantitative easing it would be the government that would play the active role in how it is used and not the Bank of England. Maybe we should call it quantitative easing as it sounds better than printing Money- that’s what the Americans call it and they have by all accounts already started printing ‘green backs’. Billions of Dollars!
Governments use quantitative to boost the money supply within the banking system by providing the banks with extra capital. The problem with quantitative easing is how much money should the government print and when should they stop printing money in order to not control inflation. The Government can also control the process of quantitative easing by selling the assets it buys with the newly printed money. Inflation is one of the biggest dangers of printing money or using quantitative easing.
So how would the government implement quantitative easing?
It would involve the Bank of England giving money to the banks in return for assets, like buying government bonds, corporate bonds, dodgy assets and toxic mortgage debts. The government in effects buys the debts, like mortgage or bonds in exchange for money and the government then become liable for the debt or should I say we the taxpayer becomes liable for the debt. This helps to put more money into the banking system. The hope is that the banks would lend this extra money to us so that we will spend more. Quantitative easing is extremely risky and it needs to be practised safely and with caution.
In the words of George Osborne, Shadow Chancellor “printing money is the last resort of a desperate government when all other policies have failed.” The government needs to find some other monetary mechanism to fight deflation. We all know that inflation is controlled reasonably well by increasing and decreasing the Bank of England base rate during boom times. If Bank of England and this government use quantitative easing and they lose control of it we could see interest rates of 17% and 18% returning and inflation rising beyond anything we could have imagined. Your thoughts, experiences and comments are welcome.
About the Author
Contributing author Mark Aucamp has been providing Talk Money Blog with regular
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Zimbabwe introduces $50 billion note
| | ZIMBABWE 2008 20 BILLION MONEY BANKNOTE VF x 10 Piece $18.99 |
| | 50 TRILLION ZIMBABWE DOLLARS x 10 BANK NOTES + 5 BILLION $15.99 |
| | * ZIMBABWE – 5 BILLION DOLLARS 2008 UNC – P 61 $3.10 |
| | * ZIMBABWE – 5 BILLION DOLLARS 2008 UNC – P 84 $2.95 |
| | * ZIMBABWE – 1 BILLION DOLLARS 2008 UNC – P 83 $2.75 |
| | * ZIMBABWE – 10 BILLION DOLLARS 2008 UNC – P 85 $3.90 |
| | TRILLIONS+++ ZIMBABWE CURRENCY BANK NOTE SET OF 11 NOTES + 10 BILLION YUGOSLAVIA $19.99 |
| | ZIMBABWE 5 Billion Dollars 2008 P-84 UNC $1.49 |
| | ZIMBABWE 5 Billion Dollars 2008 P-84 UNC lot 10 pcs $12.00 |
| | QUARTER BUNDLE (25) ZIMBABWE 1 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $37.00 |
| | LOT OF TEN ZIMBABWE 10 BILLION DOLLARS HYPERINFLATION BANKNOTES + FREE BONUS! $17.76 |
| | FULL BUNDLE (100 COUNT) ZIMBABWE 20 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $95.00 |
| | FULL BUNDLE (100 COUNT) ZIMBABWE 1 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $95.00 |
| | HALF BUNDLE (50 COUNT) ZIMBABWE 5 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $80.00 |
| | FULL BUNDLE (100 COUNT) ZIMBABWE 5 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $145.00 |
| | HALF BUNDLE (50 COUNT) ZIMBABWE 20 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $60.00 |
| | QUARTER BUNDLE (25) ZIMBABWE 20 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $37.00 |
| | HALF BUNDLE (50 COUNT) ZIMBABWE 1 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $60.00 |
| | QUARTER BUNDLE (25) ZIMBABWE 5 BILLION BANKNOTES UNCIRCULATED CONSECUTIVE $45.00 |
| | LOT OF TEN ZIMBABWE 1 BILLION DOLLARS HYPERINFLATION BANKNOTES + FREE BONUS! $17.76 |
| | LOT OF TEN ZIMBABWE 20 BILLION DOLLARS HYPERINFLATION BANKNOTES + FREE BONUS! $17.76 |
| | ZIMBABWE 50 BILLION HYPERINFLATION BANKNOTE CURRENCY + 1 DOLLAR FOR CONTRAST $7.66 |
| | ZIMBABWE $50 BILLION P87 NOTE – 100 TRILLIONS IN STORE! $6.77 |
| | ZIMBABWE $20 BILLION P86 NOTE – 100 TRILLIONS IN STORE! $6.77 |
| | ZIMBABWE 1 BILLION HYPERINFLATION BANKNOTE CURRENCY + 1 DOLLAR FOR CONTRAST $7.66 |
| | ZIMBABWE 50 BILLION SPECIAL AGRO-CHEQUE 2008 PLUS $1 BEARER CHEQUE 2007 $7.66 |
| | ZIMBABWE $1 BILLION P83 NOTE – 100 TRILLIONS IN STORE! $6.77 |
| | ZIMBABWE 5 BILLION SPECIAL AGRO-CHEQUE 2008 PLUS $1 BEARER CHEQUE 2007 $7.66 |
| | ZIMBABWE 5 BILLION HYPERINFLATION BANKNOTE CURRENCY + 1 DOLLAR FOR CONTRAST $7.66 |
| | ZIMBABWE $10 BILLION P85 NOTE – 100 TRILLIONS IN STORE! $6.77 |
| | ZIMBABWE 10 BILLION HYPERINFLATION BANKNOTE CURRENCY + 1 DOLLAR FOR CONTRAST $7.66 |
| | ZIMBABWE 20 BILLION HYPERINFLATION BANKNOTE CURRENCY + 1 DOLLAR FOR CONTRAST $7.66 |
| | ZIMBABWE $5 BILLION P84 NOTE – 100 TRILLIONS IN STORE! $6.77 |
| | ZIMBABWE 100 BILLION SPECIAL AGRO-CHEQUE 2008 PLUS $1 BEARER CHEQUE 2007 $7.66 |
| | 10 BILLION ZIMBABWE DOLLARS x 8 BANK NOTES ♦ ALMOST UNC $9.99 |
| | TRILLION & BILLION FULL BANK NOTE SET ZIMBABWE DOLLARS $20.99 |
| | TRILLIONS+++ ZIMBABWE CURRENCY BANK NOTE SET OF 11 NOTES + 10 BILLION YUGOSLAVIA $19.99 |
| | 10 TRILLION ZIMBABWE DOLLARS x 10 NOTES + 5 BILLION YUGOSLAVIA DINARA $11.00 |
| | 1 BILLION ZIMBABWE DOLLARS x 13 BANK NOTES ♥♥LUCKY 13♥♥ $13.13 |
| | 50 BILLION ZIMBABWE DOLLARS x 10 BANK NOTES + 50 TRILLION $13.99 |
| | ♥10 BILLION ZIMBABWE DOLLARS + 500,000 GREECE DRACHMAI♥ $8.99 |
| | 5 BILLION ZIMBABWE DOLLARS BANK NOTE CRISP UNCIRCULATED $4.99 |
| | 50 BILLION ZIMBABWE DOLLARS x 15 BANK NOTES CIRCULATED $15.99 |
| | 100/50/25 BILLION ZIMBABWE DOLLARS MIXED BANK NOTE SET $9.00 |
| | 50 BILLION ZIMBABWE DOLLARS ZA REPLACEMENT # ZA0010580 $15.00 |
| | 1 BILLION & 5 BILLION ZIMBABWE DOLLARS BANK NOTES ☼ UNC $7.99 |
| | 10 TRILLION ZIMBABWE DOLLARS x 10 BANK NOTES + 100 BILLION $11.99 |
| | 10 TRILLION ZIMBABWE DOLLARS x 10 BANK NOTES + 1 BILLION $14.99 |
| | ♥ 50 BILLION ZIMBABWE DOLLARS x 35 BANK NOTES ♥ VF/XF ♥ $25.99 |
| | 10 BILLION ZIMBABWE DOLLARS BANK NOTE x 10 NOTES P85 $8.99 |
| | 20 BILLION ZIMBABWE DOLLARS BANK NOTE x 10 NOTES P86 $10.99 |
| | 1 BILLION ZIMBABWE DOLLARS X 100 BANK NOTES AUNC BUNDLE $89.99 |
| | 500,000 ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.99 |
| | 1 MILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $8.99 |
| | 200 MILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.25 |
| | 500 MILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.00 |
| | 500 MILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.15 |
| | 1 BILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.55 |
| | 10 BILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.29 |
| | 20 BILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.39 |
| | 50 BILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $7.49 |
| | 10 TRILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $9.05 |
| | 50 TRILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $8.00 |
| | 100 TRILLION ZIMBABWE DOLLARS & 5 BILLION YUGOSLAVIA DINARA $9.50 |
| | 20 BILLION ZIMBABWE DOLLARS x 15 BANK NOTES RARE☼ XF-AU $14.95 |
| | * ZIMBABWE – 20 BILLION DOLLARS 2008 UNC – P 86 $3.60 |
| | * ZIMBABWE – 50 BILLION DOLLARS 2008 UNC – P 87 $2.95 |
| | * ZIMBABWE 5 BILLION DOLLARS 2008 P 61 LOT 2 PCS $6.00 |
| | 500,000 ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.22 |
| | 1 MILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $9.00 |
| | 200 MILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.49 |
| | 500 MILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.99 |
| | 1 BILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.88 |
| | 10 BILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.38 |
| | 20 BILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $8.98 |
| | 50 BILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.68 |
| | 5 BILLION YUGOSLAVIA DINARA x 50 BANK NOTES ♦ ½ BUNDLE $40.99 |
| | 10 TRILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $8.15 |
| | 50 TRILLION ZIMBABWE DOLLARS + 50 BILLION YUGOSLAVIA DINARA $7.99 |
| | 5 BILLION ZIMBABWE DOLLARS x 3 BANK NOTES ☼UNCIRCULATED $6.99 |
