View Full Version : Quantative Easing.
West-1
20th March 2009, 15:17
Anyone got a breif explaination of what this really means
MH1
20th March 2009, 15:41
Spending money the country hasn't got, which will cost us a lot more in years to come than people wish to admit too.
OldWelshGuy
20th March 2009, 15:45
It is about introducing money into the marketplace that doesn't exist. In effect it is devaluation of the pound, or printing money (promisary notes) against reserves we no longer have (as our glorious Prime Minister sold most of our gold when the price was at its lowest for a LONG time!
TimmoB
20th March 2009, 16:01
(as our glorious Prime Minister sold most of our gold when the price was at its lowest for a LONG time!
Funny that, I always wondered why he did that when all the expert advice at the time was not to do it. Desperation i suppose.
Timmo.
Maslins
20th March 2009, 16:35
Money had no inherent value, it is just paper. It only has the value people give it.
The government can issue more money, but like OldWelshGuy says all that does is devalue money. Therefore it leads to inflation, which is generally a bad thing.
However, the economy is currently in a position where nobody's buying anything. If the inflation rate goes up, it encourages people to buy things rather than hold onto money (as established, the value of money will fall). This is what the government wants to do to get industry moving again.
...as a pleasant aside for them, high inflation will help reduce the real value of their ridiculously big budget deficit.
adam
20th March 2009, 16:39
If enterprising individuals do it they call it fraud. If the Government does it to hide thier mismanagement of a situation it is called Quantitative Easing!
adam
20th March 2009, 16:40
They'll be nicking your car next and calling it "Congestion easing".
vvaannmmaann
20th March 2009, 16:42
Or does it mean,we are in the c#ap,and no-one really knows if,how and when we will ever get out of it?
lex
20th March 2009, 16:58
Or does it mean,we are in the c#ap,and no-one really knows if,how and when we will ever get out of it?
It seems that this is the only option the government believes they have in order to try and remedy the situation.
It may help the situation slightly however yet again they are not looking at the long term impact of such a measure, all quantative easing will do is bring about another recession down the line sooner rather than later.