Wizard Brown!

[R1Geezer]

Ok Brown waved his wand and create �75bn out of thin air. Does anyone know if the opposite ever happens? Ie presumably inflation would have to be high enough to just tear up some dosh. Anyone know how this works?

[Octavius]

Here is an interesting take on printing money:

http://www.angryharry.com/esPrintingMoney.htm

In cases of hyperinflation, the money becomes so worthless, that it is not even worth tearing up. It would probably get debased, so that your current �10,000 savings account becomes 10,000 'new' pounds (with a realtime new value of �100). A simplistic analogy, but hopefully it makes sense.

[kempie]

Not quite into thin air but Mr Brown did wave his "Abolition of Advanced Corporation Tax Relief" wand resulting in excess of �100bn disappearing from pension schemes. His "Gold Reserves Grand Giveaway" wand was somewhat smaller.

[rov1200]

We are told if that �75bn doesn't work they have another �75bn waiting in the wings. But how does it get people a job or to start spending again? In fact being so much in debt it may have the opposite effect. If people are not buying then they should receive the handout. Money held in the banks vault is as good as useless.

[New Judge]

The opposite does happen, Geezer.

When the economy is "overheating" (that is, inflation is becoming a problem) Government tries to control it by increasing interest rates. It does this via the "independent" Monetary Policy Committee of the Bank of England. This effectively takes more money from individuals and businesses.

What has happened now is that stagnation in the economy has, at least for the moment, removed the threat of inflation. To stimulate it, interest rates have been reduced to near zero and there is nowhere else to go with that strategy. Hence the �printing money� plan.

This is unchartered territory for the UK and carries a number of risks. Not the least of these is the renewed threat of inflation. When the economy recovers (as it will) there will be far more money available and this will chase goods and put up prices.

[R1Geezer]

Thanks Judge, it seems then that there is no "unprinting of money" ever, so in reality the governement is devaluing every pound in existance a little, hence effectively taxation. that being the case why pi55 around with taxes at all? why not abolish all the revenue collection agencies, save zillions and just massage the figures? Ok I know there is a lot of details I don't yet understand but please someone enlighten me!

[BillyBB]

Crazy devaluing of all our money. No doubt it will be sold to the masses by the Brown Broadcasting Corporation as a miracle cure.
We now rely on selling govt gilts to fund govt spending. The current holders and other buyers will be put off by the devaluation and distrust of future craziness.
No sales = bankrupt govt = imf and food riots.

[BillyBB]

We may be uncharted but Weimar Republic and Zimbabwe show exactly what can happen.
We won't get that bad but expect high inflation in 12 - 18 months.

I always wanted to go to Argentina, I never expected it to come to me!

[BertiWooster]

The bottom line here is , that no one knows if this tactic will work - there is no precedent for this .

We are sailing unchartered waters here .

Even the top economic gurus differ in what action to take .

[Prudentia]

All the liquid assets my family hold will be converted into gold bars in the next few days and I would advise you all to do the same, Brown has deliberately destroyed our economy because he hates the English because he knows we've rumbled his duplicitous nature, the only satisfaction we have is that like the arch liar Wilson 'the pound in your pocket creep' he will spend eternity in the hell of his own making, he is welcome to his disastrous fate!!!

[BertiWooster]

'' Brown has deliberately destroyed our economy because he hates the English ....''

So the scots have escaped the difficulties that the rest of us are experiencing ?

What an ignorant remark

Make sure you dont buy your gold bars from Dr No - you may lose your shirt , as well

[kempie]

Why not ask Gordon if he will sell you the remaining UK gold reserves at the same knockdown rate as his last sale.