Conjouring money out of thin air ?

mickthechippy

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huge injection of new fake money, bank of England buys more government bonds with newly conjoured money on a promise of a payback of money a government doesnt have

now, while I understand the idea of having more "money" in circulation to pay for this pandemics costs, it doesnt seem to me to be a good fiscal policy, sooner or later its gotta be paid back,

but that then lends the point that it will only be fake money paying back an issue of fake money, the sorta thing that led to the great fiscal crashes of the 20th century, you cant just keep printing more promisory notes

yet they are keeping interest rates at an extreamly low rate, maybe its time to raise that on the savings interest side to attract more investors with real assets

Bank of England injects extra £150bn into economy
 

Neil ofthe nene

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No real difference to the early 2000s when people borrowed (and were lent) stupid amounts of money that fueled an economic boom that was unsustainable. What's right for the Government has also to be right for the people. Difficult to criticise the Government for doing something that a very large number of people have also done. Pot, kettle, black.
 

Neil ofthe nene

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If they injet new money into the economy were does it go because I never get any. My income doesn’t go up. Is it hid under rocks?

A lot will be lent to large corporates who will use the money to finance projects that in turn increases employment and thus improve the economy. You won't get a pay rise but someone will get a job.
 

Zerkalo

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I remember doing this at university, 'Quantitive Easing', seems right to me but that probably shows how long ago it was I learned about it. :unsure:
 

mickthechippy

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No real difference to the early 2000s when people borrowed (and were lent) stupid amounts of money that fueled an economic boom that was unsustainable. What's right for the Government has also to be right for the people. Difficult to criticise the Government for doing something that a very large number of people have also done. Pot, kettle, black.

The difference then was the government wasnt already trillions in debt and holding so many gilts and promissory notes, around 30% of the national debt is already held by the BofE

QE does not benefit everyone

 

160642fishing

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And a fat cat will get fatter?
Did you miss the word 'lent' dry nets,the money will have to be paid back,the banks make a profit,the borrower invests in new jobs,they make a profit,rightly so,the workers get a wage,the Government get taxes,win,win situaution all round in my eyes.
 

spanky

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Such is life in these strange times. The government will get criticised whatever it does - do nothing and they are ruining the economy and hate poor working class people, borrow money and they are irresponsible and shackling us with debt, which means higher taxes for the poor working class people. It's easy to sit and moan, it's harder to act.

Also worth pointing out that this debt is low interest and does not have to be paid back immediately. View it more like a mortgage that gets paid back over many years.
 

TrickyD

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We read of all these countries borrowing and in huge debt, but who are they in debt to ?
 

Ken the Pacman

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The one that never fails to make me laugh is the reduction in the interest rate which is meaningless to the public now as nobody is paying 1% to 4% on borrowed money, if you are lucky your mortgage might get near there but the average car loan is more like 10% alright its far better than the 15% of the 1980 / 90s
 

genesis

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huge injection of new fake money, bank of England buys more government bonds with newly conjoured money on a promise of a payback of money a government doesnt have

now, while I understand the idea of having more "money" in circulation to pay for this pandemics costs, it doesnt seem to me to be a good fiscal policy, sooner or later its gotta be paid back,

but that then lends the point that it will only be fake money paying back an issue of fake money, the sorta thing that led to the great fiscal crashes of the 20th century, you cant just keep printing more promisory notes

yet they are keeping interest rates at an extreamly low rate, maybe its time to raise that on the savings interest side to attract more investors with real assets

Bank of England injects extra £150bn into economy
Told you before Mick. Get it all in GOLD. It will never let you down long term. And can be good short term if you want to be speculative (y)

gold.jpg
 

mickthechippy

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All sorted then Mick. No matter what happens to the economy in the future the shiny stuff will make money.
it went down a tad last month :oops:

watched that 2nd world war dealer on tv earlier, he invested in a sherman £175k !!!!!
 
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