ChatterBank1 min ago
How Much Is My Pound Worth After £200 Billion Of Quantitative Easing?
Quantitative Easing devalues the value of money. If my £1 was worth 100p yesterday, and today we've been "eased" what is my pound now worth?
Asking for a friend!
Ed.
Asking for a friend!
Ed.
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it'll only get really bad when a turnip is worth two wheelbarrows of pounds.
Which has happened
http://justforsneaks....llar-bill-obverse.jpg
Which has happened
http://justforsneaks....llar-bill-obverse.jpg
Accusing the Editor of being drunk is possibly a dangerous course of action, Swilliams75!
;-)
Ed:
As Eddie states, there's no immediate impact on the money in your pocket. Foreign exchange traders might see the pound as worth slightly less; if so, you'll get slightly fewer euros or dollars for your pounds when you travel abroad. However foreign exchange traders might view the Bank of England's cash injection as a boost to the UK economy, which would increase the value of the pound (rather than decreasing it). In practice it will probably not make much difference either way.
However the risk of quantitative easing is that it can lead to inflation. If so, the pound in your savings account will be worth less in the shops next year than it is now. (Obviously that's likely to happen anyway, but the effect would be exaggerated).
The trick with quantitative easing is to inject exactly the right amounty of money into the economy and then later (when things are improving) to start calling that money back in. If quantitative easing is overdone it can lead to hyper-inflation, such as happened in Germany, when people had to fill a wheelbarrow with banknotes just to buy a loaf of bread
http://www.arabianmon...wheelbarrow-money.jpg
and children were given bundles of banknotes to play with (as they had little other value anyway)
http://1.bp.blogspot....laying-with-money.jpg
Some of us have long memories (with associated cynicism!)
;-)
Ed:
As Eddie states, there's no immediate impact on the money in your pocket. Foreign exchange traders might see the pound as worth slightly less; if so, you'll get slightly fewer euros or dollars for your pounds when you travel abroad. However foreign exchange traders might view the Bank of England's cash injection as a boost to the UK economy, which would increase the value of the pound (rather than decreasing it). In practice it will probably not make much difference either way.
However the risk of quantitative easing is that it can lead to inflation. If so, the pound in your savings account will be worth less in the shops next year than it is now. (Obviously that's likely to happen anyway, but the effect would be exaggerated).
The trick with quantitative easing is to inject exactly the right amounty of money into the economy and then later (when things are improving) to start calling that money back in. If quantitative easing is overdone it can lead to hyper-inflation, such as happened in Germany, when people had to fill a wheelbarrow with banknotes just to buy a loaf of bread
http://www.arabianmon...wheelbarrow-money.jpg
and children were given bundles of banknotes to play with (as they had little other value anyway)
http://1.bp.blogspot....laying-with-money.jpg
Some of us have long memories (with associated cynicism!)
For Daisy:
http://www.theanswerb.../Question1064078.html
(No elephants were harmed in the provision of that answer)
http://www.theanswerb.../Question1064078.html
(No elephants were harmed in the provision of that answer)
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