to think that printing more money is not really the answer the the world's money problems?

[purepurple]

Unless they print millions and give us all some, maybe. If I paid off my mortgage I would be better off

I think that they are running out of options.

Interest rates can't go much lower, although I think we will probably see another 0.5% cut next month.

The next thing is for the Bank of England to write to the Chancellor to get permission to print money. The main concern I have seen is that they may have left it too late to do that.
Not sure what the implications of that are.

It said on the news last night that NO-ONE knows what the implications will be, that's what is scaring me..........

I think they could predict the implications - it's what countries with 1000% inflation have done!

If they want to print money, they have to use it to put people to work - eg, use the opportunity to improve the country's infrastructure.

You can't just print money to allow people to behave irresponsibly. It has to be tied to work.

I wonder what 'quantitative easing' means and whether that is the same as printing money or whether there are some differences.

Can anyone explain?

I don't see why they dont just print off loads more money and send it to the third world, countries with a credit crunch, people who live below the poverty line and me - in that order!

What is money anyway? At the end of the day - i never really know - its like you can transfer money from one account to another, write cheques and pay by credit card - no actuall MONEY takes place, or is there someone somewhere playing a giant game of monopoly? Honestly a serious question im a bit dumb about these things.

I think that if they print more money then it's value is less.
They seem to be in fear of a run on the £ if they do.
By needing to print more money the economy is seen as even weaker, and confidence falls and round we go again.
I also am a bit dumb about these things.

Here's a good idea of what some of the effects will be.

That's a picture from 1930's Germany, by the way, when people were taking laundry baskets full of money to the bakers to buy a loaf of bread.

You know what scares me the most? It was Germany's economic crisis which enabled the Nazi party to be elected. There's so much discontent in this country at the moment, it wouldn't take much for the BNP to become a major power in this country.

Sorry, perhaps a little OT -- to the OP, YANBU.

Sorry - that pic is from 1923, not 1930's. You get the idea though.

YANBU I agreee with raisingrrrl, it will make the money worthless and makes the future quite scary!

Gordon sold off most of our gold, didn't he?

this is what has happened in zimbabwe , where the notes become valueless within hours and inflation is %%%%%%%%%%%%%%%. and most people can't afford to eat.

Read Terry Pratchett's Making Money - not only is it a fab book but it explains economics quite well, in a lighthearted sort of way.

I was going to use Zimbabwe as an example too.

It's jusy going to cause inflation, which means that all the money that we've saved hard to buy a house will become worthless. Yet again anyone who has been sensible will get stuffed. And don't get me started on pensioners on fixed incomes...

Printing money creates inflation ... inflation is good when you are a borrower. Given the size of the governments' borrowing, it was inevitable.

raisingrrrl you are spot on with the Weimar Germany illustration.
Devaluing the currency was a trick used in Medieval times before people really understood economics. These days, it really should only be done as a very last resort. It does have serious implications, one of which can be hyper-inflation.

I have some 50,000,000 Mark German stamps from the period of hyperinflation

High inflation would benefit borrowers though wouldn't it ?

It's worked ever so well in Zimbabwe what with the 1,000,000% inflation and 90% unemployment.

Maybe Gordon Brown could start a Cholera outbreak to complete the picture.

The major problem to day is that governments have lost control of real interest rates so they can't control inflation, they've borrowed up to the hilt & still can't spend their way out of the recession. Globalisation has left us all at the mercy of market forces.

Pratchets Makin Money is very good, esp (sorry for spoiler) the realisation that the gold was never there in the first place.

Deflation is not good for anyone though, is it?

They are aiming for the BOE inflation target, which is what - 2%?

The question is how well they can control the process. One hopes they can since they control the printing press.

So in my opinion, it is not a disaster but I don't see how it solves the problem.

I think the gold standard was abolished somewhere around the time of the Great Depression anyway.

I think, basically speaking (but very happy to be corrected) you can think of it in stages.

• Everything in 'market forces' is about supply and demand.

• If something is in high supply, like milk, then prices are lowish, because there is plenty to go around, so the 'buyers' have the power. If someone tried to charge £10/pint, we would go elsewhere, or decide that we don't really need milk.

-If something is in low supply, like Alfa Romeos, then the 'sellers' have the power, because more people want an Alfa than there are Alfas available, so the price goes up and up and up until only those that can afford them buy them.

So, if bread is £1 per loaf, and we have £1 to spend, we can all buy 1 loaf of bread. There is enough bread, so we are all happy.

But if we suddenly have £1000 to spend, we could all buy 1000 loaves, but there isn't enough bread. So the price of bread goes up and up and up.

It is a bit confusing..