What is the alternative? The deficit the government now plans could be alternatively funded. QE is one option. But given the scale of the crisis even that seems unwise and instead the Bank of England should simply lend the government the money to fund the deficit, interest-free.
At the same time, it should limit the interest paid on deposits held by commercial banks with the Bank of England to contain interest costs to the government.
Legally this is possible. Post-Brexit the government has no obligation to sell bonds to fund its deficit. And there is now no legal constraint on the government borrowing from its own bank, which can very easily create all the money required.
Will that add to inflation? I doubt it,
Well, print on then, print on. It’s not as if we’ve got any evidence that it might – Weimar, Zimbabwe, Venezuela, never happened, did they?
Can someone explain to me the difference between QE and lending the government money which did not previously exist, please.
What did I say the other day? By the time that QT was supposed to start the BoE would have done a 180 degree turn and started QE again.
And taa-daaah!
https://www.bbc.co.uk/news/business-63061614
Come on Tim, admit it, you were utterly wrong about QE. Its money printing, it will never be reversed, and people like you who supported in in 2009 are complicit in giving the politicians the keys to the money printing presses. When an economy fucks up, it needs to take its medicine, take the hard times and allow all the excesses to be purged out of the system, and start afresh. QE allows the pols to never have to take their medicine, and thus they will never stop using it, until they have destroyed the money system entirely. Its what people who started printing money always do. There never is only a little bit of money printing. Its like crack cocaine, one sniff and the next thing you’re living in a cardboard box under a bridge selling blow jobs to passers by for your next hit.
‘Lend’ enough money, share it all out, and we could all be millionaires Ritchie. Of course a packet of crisps would cost several hundred thousand pounds.
Is the Bank of England emergency bond buying scheme necessary, or political gayops to get rid of Trussy / tie the government up in bullshit until it can be replaced by Labour?
I’m leaning towards the former given the apparent coordination with the IMF and their alleged ‘concerns’.
Or latter, but you get the idea.
They’re never going to stop fighting the Brexit referendum, are they?
@Steve
The Brexit vote has deemed it that any financial downtown, no matter how slight for far into the future, will be forever blamed on 17.4m Wetherspoon’s regulars.
“Downturn” FFS
Kaneda – Definitely, but more worryingly it’s also convinced them to throw a massive strop to reverse any democratic outcome that doesn’t give them 100% of what they want.
We’ve gone from them crying about ‘austerity’ to them pretending to be flinty eyed fiscal disciplinarians in a heartbeat. Crazy.
If Weimar, Zimbabwe, and Venezuela had unlimited dollar swap lines, would they even have had inflation?
Yes.
Name a country that did that didn’t have inflation. You can’t.