THE ZIMBABWE OPTION..
Thursday, January 8, 2009 at 08:29AM It is highly likely that around lunchtime today, the Bank of England will cut UK interest rates once again, this time bringing them down to an all time low. However this is pointless. It's golfer with one club syndrome as far as I can see. Many economists and other experts warn that rate cuts are ineffective as the major problem now facing the British economy is the availability of credit not the cost of loans. I agree. It is also lack of business confidence. So what is the great guru Gordon Brown considering doing?
Printing money.
"The Bank of England is being urged to consider injecting money directly into the economy by printing more money, a process known as "quantitative easing".
That's a lovely euphemism, isn't it? Quantitative easing.
George Osborne, the shadow Chancellor, is 100% right when he says:
"The very fact that the Treasury is speculating about printing money shows that Gordon Brown has led Britain to the brink of bankruptcy. Printing money is the last resort of desperate governments when all other policies have failed. It can't be ruled out as a last resort in the fight against deflation, but in the end printing money risks losing control of inflation and all the economic problems that high inflation brings."
It hasn't worked out too well for Robert Mugabe in Zimbabwe, has it? It's not the recession that frightens me, it is the stupifying reactions of this government of knaves and fools. They seem intent on making a bad thing much much worse.
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Reader Comments (5)
BoE 1.5%
Tripper,
Yes, saw it. Madness.
Personally I dont mind. Im on Tracker at 0.24 above BoE, with no collar. Yes it hits my savings, but Im about to burn the last of that on a few big items (not a plasma TV). I might aswell enjoy what ive got while it is still worth something. Actually they are needs, not wants.
Could it be that with a Bank Rate of 1.5% Banks will not lend because there is no return worth considering?
Could it be that with a Bank Rate of 1.5% Banks will not lend because there is no return worth considering?
The banks have little or no reserves and the overall credit market is shot to peices. The long and short of it is Britian is effectively bankrupt. It has no money. The debt monster has swallowed it all up.