If I have a house fire and my wallet, containing £100 in cash, is destroyed, in theory, the Bank of England would be obliged to reissue the £100 in cash to me if I could present sufficient proof of the notes’ loss and their serial numbers. Is this in any way inflationary? I think it would be very difficult to argue that it is.
During 2008 the global banking system discovered that it had mislaid $2-3 trillion of depositors’ cash. It can hardly be a surprise to find that the quantitative easing programmes put into place since have not resulted in inflation.
Yet, if printing money leads to financial salvation, it would have become economic orthodoxy a long time ago. There will be times when it is sensible to print money and others when it is not. Clearly Zimbabwe is an example of where it all went horribly wrong. Is granting Jeremy Corbyn the power to administer ‘public quantitative easing’ a sound idea or is this just too powerful an economic drug to be left in the hands of politicians?
There is a fascinating 15 minute clip of an interview by M&G’s Jim Leaviss with Adair Turner who is discussing his book on the matter.
My Christmas present list has just got a little longer.
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