Quantitative Easing – the next bright idea?

You’ll have followed, on this blog and elsewhere, the troubled progress of Gordon Brown and Alistair Darling’s battle to ease the record-breaking recession into which this country has slid on their watch.

Bailing out High Street banks, reducing the rate of VAT – measures designed to stimulate consumer spending and allow the banks to begin lending again.  Yet nothing seems to be working, so it’s time for another think.

It’s against this backdrop that rumours are beginning to circulate about ‘Quantitative Easing’ being used by the Government.  Quantitative Easing – or QE as it’s sometimes referred to – is a fiscal mechanism whereby the central bank (or in this case, the Labour Government) prints more money and injects it into circulation.

To read the Wikipedia definition of QE, click here

So – what do we think then? Bail out the banks with taxpayers’ cash, then just print more money to get over the loss? Might that not lead to even more rampant deflation?

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