Sometime very soon we are going to have an announcement from the Bank of England that they are going to create more quantitative easing. An extra £100 billion is forecast**.
So what happens when more quantitative easing is created?
This is one of two posts on this issue planned today, and there will be more in quantitative easing over the next week. But start with this:
** It turned out it was £150 billion
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As Mervyn King said during the 2008 bank led recession, “the banks Have stopped lending,(by creating money).so we(the BoE) have to do it for them.”
The stimulus ends up in real estate?
Look at the evidence, though it’s hard to be scientific about – prices of goods and services have not risen as the inflation cranks forecast(say Peter Schiff).
But house prices have held or even grown at the normal rate of 5%, when we’re in a recession technically.
So has the stimulus ended up in real estate(not the capital in the bricks and mortar – the location value)?
Why is this interesting?
Because if one believes MMT will redistribute wealth from the rich to the poor, the new money will always enrich the wealthy.
The biggest assets of the wealthy are real estate, followed distantly by monopoly profits (FTSE100)
And these assets are untaxed, in the end.
Please stop being ridiculous
As I have explained (yesterday) QE is not what MMT proposes in any way
It proposes the use of newly created money in a fundamentally different way
Please don’t talk nonsense here
I never said it was. Are you trying to read my mind?
New money is new money is new money notwithstanding ones ideology.
I’m pointing out the inevitable effects of it in every form.
Thoughts?
Rather than moderate me because what I say brings something under proper scrutiny in a more fundamental way, be a hero and challenge your world view
With respect, I pointed out that you were making claims about a situation do not endorse
So why should I change my world view?
I wouldn’t bother to reply
On the contrary, I’m interested in your reply. You’re the foremost expert on taxation in the UK.
I’m making a claim about ‘new money’ – a rose by any other name would smell as sweet?
So I’m not asking you to change your world view. I’m asking you to *challenge* it, and see what emerges?
That is, is the idea of new money(or whatever rose you prefer) just going to make the wealthy, wealthier?
Because it will always end up in location values. And real estate is the biggest asset of all the wealthy.
I look forward to your considered repsonse.
Under QE I have always argued this to be the case – which is why I proposed better firms if QE from 2010 onwards
Under MNT this would not be true fir reasons I have already explained
Your only problem is you did not read the responses
I think you answered the question in a paragraph preceding this video; the fact that the creation of money is made needlessly complicated through QE and has to go through private banks results in a loss of control over what it is spent on…probably a lot on housing.. instead of the Gov. borrowing directly from its own bank and keeping control of how it is spent, ideally on public purpose like a Green New Deal. Yes?
Yes