Man’s insane

P³ is insisting that QE has created lots of idle cash sitting around. Therefore we’ve got to mobilise that cash to invest in lovely stuff:

My logical conclusion, based upon this analysis, is that there is a massive market for what look like cash based savings products but which are related to real economic activity, which is precisely what I am trying to promote for the combined reason of tackling the cash glut that exists, and to provide the capital that society needs for the economic and social transformation that it must undertake.

The problem with this being that as soon as that idle cash gets spent upon real investment then it’s necessary to reverse QE and suck the cash back into the BoE. Or, obviously, have significant inflation:

Such an account would lock money up for, for example, five years at maybe 1% at present, or 10 years at maybe 1.5%.

He just doesn’t get economics, does he?

It’s precisely because that £800 billion of new money isn’t being spent that we’ve not got massive inflation. As soon as it is, we do.

9 thoughts on “Man’s insane”

  1. “society needs for the economic and social transformation that it must undertake.” MUST ? or I would like? though I suppose in his mind I should only spend my surplus monies on what he wants rather than what I want to spend my money on. Fuck off Spud.

  2. Him and his mates get your money now, and spend it when it still has its full value. In ten years time he gives you your money back, which will now buy a cup of coffee and a sandwich.

  3. Bloke in North Dorset

    Yes, Rob, but think of the socialist nirvana we’ll be living in due to their wise choices? You won’t need your savings because the State will be looking after all your needs, probably through UBI (is it Tuesdays when UBI is the answer?).

  4. “Pardet Singh says

    “funding for the Green New Deal”

    Could you give an indication of how much you have personally invested in these wonderful new green energies? As a sign of your confidence in them? It would seem odd if your wealth were tied up, useless in bricks and mortar when there is apparently something so much more socially useful that could be done with the money.

    Reply

    Richard Murphy says:

    I am creating the means to deliver that investment”

    So, that’s none then.

  5. Rob you are assuming that Herr Oberst Kartoffel has mates. From his attitude in the comments section of his blog, Herr Oberst could not only start an argument in an empty room but piss the room off as well.

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