Posted on 03/05/2009 7:58:56 AM PST by BGHater
The Bank of England is expected to announce it will "print money" - and could cut the base rate of interest to a record low.
The Sky News Money Panel has said the policy of "printing money" should be carried out now before the slump gets even worse.
The Bank of England Monetary Policy Committee is expected to announce it is giving the go-ahead to quantitative easing to boost the amount of money in circulation.
It is also expected to cut the interest rate by 0.5% to a record low of 0.5%, experts say.
But it is the likely introduction of other stimulus measures that will cause headlines.
Chancellor Alistair Darling is expected to approve the printing of around £150bn.
The Bank will create the money to buy Government and corporate bonds through its Asset Purchase Facility (APF).
The double-barrelled approach is the right way to blast away Britain's recession blues, according to the Money Panel.
They voted 6-4 in favour of quantitative easing and a 0.5% rate cut.
Bronwyn Curtis, head of global research at HSBC, said: "They should also approve and start quantitative easing this month.
"They have already stated their intention to do it... and hesitating at this stage threatens to undermine the credibility they have built over the past 12 years.
"They will start the quantitative easing gradually and watch the impact on the exchange rate, gilts and the other general economic indicators."
(Excerpt) Read more at uk.news.yahoo.com ...
Earlier this week my daughter had nothing to do at school. The other kids were taking a test from which she was exempt so she was put in a room with a few other kids and allowed to watch the History channel for three hours.
That night she told me about a program she watched that morning about a Nazi program to destroy the British economy during the war by counter-fitting British pounds.
She has come to the conclusion that printing money willy-nilly is an economy-destroying move and an act of war.
hmmm...
I’ve heard Helicopter Ben Bernanke explain that inflation isn’t a problem because the government is just printing money to counteract the reduction in the velocity of money caused by the reduction in credit. I’ve never heard of anyone give an explanation of how to get the cash out of the system when the economy starts to come back. I expect very bad inflation once credit starts rolling again, unless we get used to a much lower volume of credit than we had before (not that there’s anything wrong with that, considering how irresponsibly credit was used before the crash).
Print more money, yeah! that will fix it.idiots
It can be done -- you sell some of the securities on the balance sheet, which makes them cheaper and raises interest rates. You also generally raise interest rates. But it won't be, because it damps down the economy. Part of the recession in 1980 to 1982 was due to the Fed under Volcker doing exactly that to counter the Carter inflation.
The political will is not there to keep inflation down. I bet they'll try to get away with a "soft landing" of Carter level inflation. I know... if that's a soft landing, what's a crash like?
Great. Now all we need to do is abolish the monarchy and we can become a fully-blown banana republic like Zimbabwe....
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.