Quantiative Easing - is it necessary or desirable?

[rov1200]

The B of E wants to print �bns of monopoly money in the hope that the banks will lend to businesses. It is hoped that by buying up the banks bad loans and decreasing the interest paid on government bonds money will be forthcoming from the banks to prop up businesses. But there is no guarantee they will lend and may keep their cash stacked away. By printing all this extra �bns the � could fall further. it can only reduce its value. Rather than worrying about the banks balance sheet could the money have been channelled direct to business?

[MarkyP05]

Goverment could reduce taxes across the board giving more money to the consumer to spend... thus help stimulate the economy.

[R1Geezer]

I reckon you 2 should apply for a job at the treasury, they obviously haven't considered your ideas.

I hardly know where to start!

[rov1200]

I agree with your comment Markypo in giving the consumer handouts to buy. The obvious success is the car scrappage scheme which has pulled many other countries including France, Germany and Japan out of recession.

Its some coincidence that I suggested on this website some 6 months ago how old cars could be traded in for cash towards a new one and we know how google publishes all our postings.

This stimulus is now being applied to other consumer products.

[rov1200]

To put this idea into context I suggested the scheme in Dec 08 based on a French scheme that operated long before the recession and to get old bangers off the road. Little did they realise at the time of a recession brewing.

http://www.theanswerbank.co.uk/News/Question67 1285.html

[rov1200]

Back to quantative easing. This 8 min video is excellent in explaining it. It shows where all these extra �bns of taxpayers money is being spent to prop up the banks so they can lend to us.

https://www.youtube.com/watch?v=ohKQP_wSO9k