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    Where has all the Money Gone ???

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    Technician
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    Where has all the Money Gone ???

    Post by Technician on Fri 07 Oct 2011, 12:55 pm

    Hi All,

    Any bets as to where all the money has gone ??

    It looks like we need another QE2 Launch, ie a second round of the banks policy experiment known as "quantitative easing. Oppoinons are mixed on the good this will do, but Mervyn King said we have 'run out of money'!!!.

    WHY have we done so, perhaps its:

    GREEDY FAT CATS and BANKS creaming off excessive bonus payments and playng fast and loose with the stock exchange leaving us all poorer apart from themselves.

    GREEDY utility companies wringing every last penny from the common people to feed their coffers and support their shareholders, Oh and to milk us dry to support so called 'green policies'...Leaving us yet less money to spend.

    Perhaps its because of the 2% rise in inflation following the last 'easing meaure' which takes more money out to the hands of the populace, and those which can least afford it; pensioners and the poorest in society.

    This new rounnd of easing if probably going to push inflation up to at least 5%, destroy saving interest rates and create the lowest annuity returns on record. QE1 did not create sustainable growth, in fact, investors selling gilts transferred their money overseas in search of better returns. So it boosted overseas economies and commodity markets, creating asset bubbles, weakening sterling and stoking inflation.

    By forcing long-term interest rates down and inflation up, QE has already increased pension fund liabilities by an estimated 74bn. Its the falling Falling bond yields that make annuities more expensive, giving new retirees much less pension income for their money, leaving them permanently poorer in retirement. And most pensioners buy fixed annuities which fall in real terms as inflation rises, so QE aggravates pensioner poverty. ( Ivanhoe, take note ).Inflation depletes spending power. It does not create growth. It undermines confidence and causes consumers to retrench, which actually weakens the economy.

    Perhaps the most acerbic view, and that of old Merv and his mates is that we need to act to stop global financial meltdown as the EU seems incapable of getting its financial house in order; and is willing to drag down the rest of the world economy while it dithers. This is in a week that the chancers in the EU decided to increse their departmental budgets by just over 4%!!!. And they are STILL buggering about!!!.

    Don't forget our help in the Greece fiasco ( and it looks like the World bank want us to cough up more,) and of course the 20 billion paid to help rescue Ireland, Oh, and the eye watering ammount we contribute to being a member of the dysfunctional EU ( oh yes, they want us to pay more as well )...

    Again the government acts like the 'impoverished student' always short of cash, but like the student if the need arises ( for a binge up with his mates ) he can always find a 'few quid behind the sofa'...Well, so can our government, ie, for supporting Quangos, pet projects, and the many billions a crippling war in Afghanisatan costs which no one wants.

    So, where has the money gone??

    Technician
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    papa_umau
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    Re: Where has all the Money Gone ???

    Post by papa_umau on Fri 07 Oct 2011, 1:35 pm

    Another excellent threadstart Technician as that is a very cogent question to ask !

    I too can only surmise where all of this money has gone as it has not gone in my direction.

    This is the second recent round of "quantative easing" that Mervyn King has dished out to the banks and I am sure that he knows that it will have the same effect as it had the last time.....NONE.

    Any country that keeps printing worthless money during hard times are always running the risk of starting an inflation-flow that might be hard to stop. It happened just before the second world war in Germany and it happened more recently in Zimbabwe whereby a barrowload of that inflated "currency" wouldn't even buy a daily newspaper.

    Even the simplest of economists knows that any economy successfully exists around the people spending money that they have earned by producing - and hopefully exporting - goods abroad. If the consumers cannot afford to spend money either because it is badly devalued or because it is too hard to come by then every and ANY economy will shrink. Mervyn King himself said yesterday that if this recession is not stopped in it's tracks that it could finish up turning into a worse depression than we saw in the great depression of the thirties.

    All on David Cameron's watch and under a set of circumstances whereby he has to stop just blaming the country's long-term ills - rightly or wrongly - on the mismanagement of the last government.


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    Angie baby
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    Re: Where has all the Money Gone ???

    Post by Angie baby on Sat 08 Oct 2011, 12:22 pm

    Hi Technician, nice to talk to you again.

    Yes I often think about this one too as even if they do print more money it will stay where it is initially put: in the banks where it is supposed to ease the credit problems of the potential homeowners and the small businesses.

    I don't even know if it will do that either.

    Paper money is bad enough but paper money on paper seems to me to be just silly.

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    Re: Where has all the Money Gone ???

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