Wednesday, October 12, 2011

Bank of England 'injects' £75 billion into the economy - oh joy!

Echoing points made in earlier posts about hidden taxation and the G20 conference, Daniel Hannan (the "Ron Paul of Britain") has recently written an article titled 'More money printing? My masters are you mad?' exposing the foolishness behind the Bank of England's decision to inject a further £75 billion into the economy. He observes:
I can't believe I'm having to write this, but nothing new will be manufactured, invented or developed  as the result of this monetary splurge, no services offered, no businesses founded. Rather, the money already in circulation – the money in your bank account, in your purse, under your mattress – will be worth less. The government, in other words, is helping itself to your savings – and, in doing so, is damaging productivity, disincentivising work and weakening the competitiveness of the British economy.
The principle is a simple one: when the government or its bankers inject more money into the economy, this decreases the value of everyone's savings. To read more how this work, click on some of the above links or read Mr. Hannan's other post, 'Printing money is the last resort of desperate governments when all other policies have failed.'

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