06 Mar 09
The British Government is now starting to print an extra amount of money to buy bonds in an attempt to get the banks lending and so cure the credit crunch does anyone think this will work? Is the American government doing the same? Bearing in mind the disasters of Germany in the early thirties following the wall street crash it seems a very high risk strategy to me
06 Mar 09
Printing more money raises the inflation, which means prices increase over time. It's a normal monetary policy tool for central banks. The attitude among economists towards printing more money is many and inconclusive, but for most it's considered a bad thing, since it depreciates the value of savings and services. Further more it's hard to reduce inflation once people are accostumed to the new higher level.
06 Mar 09
Originally posted by FabianFnasYou don't have to tell anybody. If people suddenly have more money to buy goods, the price of goods will increase. It's called The Law of Demand.
But what happens if you pring money but don't say anything? If no one knows, then how would prices rise?
If printing money makes inflation, then does burning money prevent inflation?
You would have to burn a whole lot them.
06 Mar 09
Originally posted by brian ashtonI don't the Americans would do the same thing. Generally it works like this: The way in which many central banks cut interest rates is to offer banks more money (i.e. print money), so the price of money (the interest rate) falls. On other occasions they engage in "quantitative tightening" - i.e. interest rate rises. Since the interest rate in the US is extremely low already, they gain nothing.
The British Government is now starting to print an extra amount of money to buy bonds in an attempt to get the banks lending and so cure the credit crunch does anyone think this will work? Is the American government doing the same?
06 Mar 09
Originally posted by LundosRight, but if you, as the state, by a extra big thing from abroad, like a 100 planes of F-16 or something (built in Japan, aren't they?), and pay them with newly printed money? What happens? Does their economy fall like a rock in inflation?
You don't have to tell anybody. If people suddenly have more money to buy goods, the price of goods will increase. It's called The Law of Demand.
You would have to burn a whole lot them.
06 Mar 09
Originally posted by FabianFnasLets say you buy F-16's from the Japanese for $10 trillion of newly printet money. What happens when the Japanese wants to sell your currency back to you and get paid in their own? It's not like you suddenly have more money to spend. It only feels that way for a short period of time. You'll have to pay the bill later. It's more like your inflation rises like a hot air balloon.
Right, but if you, as the state, by a extra big thing from abroad, like a 100 planes of F-16 or something (built in Japan, aren't they?), and pay them with newly printed money? What happens? Does their economy fall like a rock in inflation?
The F-16 is build by Lockheed Martin, which has it's headquarter in Maryland in the US.
06 Mar 09
2 edits
Originally posted by brian ashtonNot only is the US printing money left and right, they have also begun producing counterfit money to cut down on costs. Yep, things are bad all over. 😛
The British Government is now starting to print an extra amount of money to buy bonds in an attempt to get the banks lending and so cure the credit crunch does anyone think this will work? Is the American government doing the same? Bearing in mind the disasters of Germany in the early thirties following the wall street crash it seems a very high risk strategy to me
06 Mar 09
Originally posted by brian ashtonWhat is the inflation rate over there right now? I heard the British Pound is dropping like a rock.
The British Government is now starting to print an extra amount of money to buy bonds in an attempt to get the banks lending and so cure the credit crunch does anyone think this will work? Is the American government doing the same? Bearing in mind the disasters of Germany in the early thirties following the wall street crash it seems a very high risk strategy to me
06 Mar 09
Originally posted by Metal BrainFood is rising in price but consumer durables are dropping fast as credit is almost impossible so the rate of inflation has remained steady at about 5%. The pound has dropped about a third over the last year. Printing extra money can only make a bad situation worse especially as the bankers who are receiving the money are still paying themselves obscene amounts in bonuses,and improving their balance sheets but not lending to get things going again. Seeing as they were largely to blame by their short term gambling in the first place I feel that bonuses should be banned altogether no matter what their contracts state at least until things start to recover
What is the inflation rate over there right now? I heard the British Pound is dropping like a rock.
06 Mar 09
Originally posted by brian ashtonI heard someone suggest that stocks should amend a rule concerning bouses and raises. The rule would state that the only way CEO's would get bonuses/raises would be for the share holders to vote them a raise. In other words, if the share holders are not pleased with their profits then neither will the CEO's be pleased.
Food is rising in price but consumer durables are dropping fast as credit is almost impossible so the rate of inflation has remained steady at about 5%. The pound has dropped about a third over the last year. Printing extra money can only make a bad situation worse especially as the bankers who are receiving the money are still paying themselves obscene ...[text shortened]... be banned altogether no matter what their contracts state at least until things start to recover
06 Mar 09
1 edit
Originally posted by whodeyhttp://en.wikipedia.org/wiki/Jan_Tinbergen (first winner of the Nobel Prize in economics)
I heard someone suggest that stocks should amend a rule concerning bouses and raises. The rule would state that the only way CEO's would get bonuses/raises would be for the share holders to vote them a raise. In other words, if the share holders are not pleased with their profits then neither will the CEO's be pleased.
Tinbergen became known for his 'Tinbergen Norm', which states that if the difference between the lowest and highest income in a company exceeds a rate of 1:5, that will not help the company and may indeed be counterproductive.
If only people had listened to him!
07 Mar 09
Originally posted by whodeyAgreed. Unfortunately when our government ploughed billions of pounds into the system they also took shares in exchange the theory being that when the economy recovered they (the government) would sell the shares and the taxpayer would get their money back. This is fine if it wasnt for the old pals act, as it seems that the bankers are still paying themselves way over the odds in the face of disaster and the government hasnt got the power to step in to stop them as they all went to the same high class schools and unis while the rest of us gnash our teeth in frustration.
I heard someone suggest that stocks should amend a rule concerning bouses and raises. The rule would state that the only way CEO's would get bonuses/raises would be for the share holders to vote them a raise. In other words, if the share holders are not pleased with their profits then neither will the CEO's be pleased.