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Old 01-08-2009, 05:09 PM   #1
Jacqui D
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Default Labour wants to print more money!

Let's print more money! Labour's latest big idea to fix Britain's economic crisis
By Benedict Brogan
Last updated at 1:23 PM on 08th January 2009


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It has hurled billions at the banks without managing to get them lending and trimmed VAT with negligible effect on struggling stores.
Now Labour is considering a new tactic to deal with the recession - simply print more money.
With interest rates slashed to their lowest level in 300 years today, the Government might be forced to create the billions it needs to launch another bank rescue scheme.
Still smiling: The economic crisis is going from bad to worse but Gordon Brown still found something to laugh about as he arrived in Liverpool today

Chancellor Alistair Darling and Bank of England governor Mervyn King were said to be contemplating the remarkable and risky measure used with catastrophic consequences by Robert Mugabe in Zimbabwe.
More...Reverse the VAT: Spend the £12.5bn on income tax or NI cuts, say Labour MPs
Relief for homeowners as Bank of England prepares to cut rates AGAIN
Pay rises will be slashed to the bone as bosses use the excuse of falling inflation
Not even M&S is safe as recession forces closure of 27 stores

The possibility emerged as:
The Bank slashed the base rate by another 0.5 per cent to take it down to a record low of 1.5 per cent, the lowest in its 315-year history.

Pressure was growing on Gordon Brown to reverse the 2.5 per cent cut in VAT, which will cost £12.5billion, and use the money to cut income tax or national insurance.
A total of 3,000 jobs were under threat including 1,230 at Marks & Spencer, which announced that it was closing 27 stores.
Bank roll: Sheets of fivers ready to be cut up
The prospect of what is known as ' quantitative easing' - printing money - emerged after Mr Darling gave a clear sign that the recession will be worse than expected.

Such a step would mark a dramatic moment in British economic history, ending decades of trying to limit the growth of the money supply.
It would also mean an end to the decade-old independence of the Bank of England as ministers took charge of what would be a politically-sensitive policy.
And it would risk driving down the value of the pound, which is already under intense pressure in the money markets in the face of low interest rates and fears of soaring Government borrowing.
Mr Darling today distanced himself from speculation he was planning such a drastic move, insisted discussions at this stage were only 'hypothetical'.
'Nobody is talking about printing money,' he said. 'There's a debate to be had about what you do to support the economy as interest rates approach zero as they are in the United States. But for us that is an entirely hypothetical debate.'
However, rumours it is being considering at the highest levels at the Treasury have been circulating since before Christmas.



'We'll work hand in hand': Mr Darling and Governor King

Margaret Thatcher won the battle against inflation by imposing strict housekeeping rules which kept a lid on the amount of cash in circulation.
Zimbabwe is an example of an economy where reckless printing of money has led to stratospheric levels of inflation, with a loaf of bread costing millions of dollars. Weimar Germany in the 1930s was a similar story.
If base rates fall to near zero the Treasury and the Bank of England will have lost one of their only weapons for stimulating growth.

Printing more money would generate cash which would be used to buy so-called toxic assets - bad loans - from ailing banks, allowing them in turn to start lending to businesses and homebuyers again.

Although economists say the policy is fraught with dangers, officials say that with prices plummeting, there is less risk that printing money will trigger inflation.
'It's sensible contingency planning, but we are not there yet,' a Treasury source said last night.
Mr Darling said if interest rates neared zero then the Government would work 'hand in hand' with the Bank to agree how much money to print.

In effect it would mean the Bank giving up the policy-making independence it was given when Gordon Brown was Chancellor in 1997.
Mr Darling hinted that he might be forced to revise the forecast he unveiled barely two months ago for a return to economic growth next summer.
The downturn has accelerated faster than the Treasury expected, with tax revenues 'falling off a cliff'.

The Chancellor said Britain was 'far from through' the recession. 'This year is going to be difficult. There are going to be some tough calls.'
Shadow Chancellor George Osborne warned that Government borrowing could be as much as £18billion higher next year, and as much as £50billion higher in 2010, if the Government has over-estimated its growth forecasts for next year.
'It appears that Alistair Darling is already trying to wriggle out of the economic forecasts he made just weeks ago, which as we pointed out at the time were more optimistic than most commentators believed,' he said.
The Chancellor's stark assessment of the economic prospects overshadowed Gordon Brown's attempts to start the year on the front foot.

The Prime Minister opened a three-day tour of the country by announcing a £140 million scheme to create 35,000 apprenticeships by the end of next year.
Today the Cabinet will meet in Liverpool, the third time it has gathered outside London in recent months, to demonstrate what the Prime Minister says is the Government's willingness to listen to concerns beyond Westminster.
Figures suggest that each regional Cabinet meeting, held previously in Birmingham and Leeds, costs the taxpayer about £200,000.
Mr Brown repeated that he was not thinking about holding a snap election this spring even if Labour's poll ratings improve further.

'I've no intention of even thinking about an election,' he said. 'We are getting on with the business of trying to sort out the problems that arise.'
Pound fights back at euroThe pound is at last gaining ground against the euro, yesterday rising to its highest level for three weeks.
After days of the two currencies being virtually equal, the pound rose to 1.11 euros from 1.09.
The latest news will be a welcome boost to industry, as investors have shunned Britain's weak currency.
Neil Jones, at Mizuho Corporate Bank in London, said: 'There's been a change in sentiment for sterling.'

The pound has weakened steadily against the euro since October as the Bank of England repeatedly slashed interest rates in response to the financial crisis.
Just after Christmas the pound almost fell to parity the euro, but since then it has been gaining some lost ground.

At the same time, this week the euro itself has been falling against other currencies. It is thought that the European Central Bank might slash its own base rate from 2.5 per cent next week.

When i saw this posted in the Daily Mail i thought so George Green was right!
The interview he gave back in early october november 2008 he gave evidence that this would happen, and that the paper they print the money on would become so expensive even notes would become a thing of the past, bringing the importance of the gold coin. Gold will take over all monetry system, was he right? It's looking that way.
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Old 01-08-2009, 05:46 PM   #2
Egg
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Default Re: Labour wants to print more money!

It is also a very cunning underhand way to force the Euro onto people in the UK. Inflation will rocket, the Pound Sterlings value will plummet, and people will clamor for that economic power house 'the Euro!' will be the battle cry at Westminster.

This is nothing short of the bold face of the economic war waged against the UK, USA and Iceland.
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Old 01-08-2009, 05:49 PM   #3
eurosceptic
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Default Re: Labour wants to print more money!

oh mya gawd whats Mr Brown doing now!

fantastic!! they hould print money and give everyone £50,000!!! (low income earners etc...)

But hell, I'd love to do some papier mache or souvenir wallpaper!!
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Old 01-08-2009, 07:23 PM   #4
Swanny
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Default Re: Labour wants to print more money!

Anyone with paper money stashed away it would seem now is a good time to change it into somethings of value
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Old 01-08-2009, 07:34 PM   #5
Jacqui D
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Default Re: Labour wants to print more money!

I'd love to be the girl in the picture right now, even though the pound may not last long, but i'd have a good time before notes disappeared altogether, i'd get that lot cut up and spread it around to everyone who needed it that's for sure.
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