Great for comforting the criminal banking fraternity, who like nothing more than to suckle on its teet while f!$%ing the rest of us up our fiscal fundaments: http://maxkeiser.com/2011/12/29/kr229-ja...
But for the definitive explanation, this is pretty good:
For every pound printed your pound in your pocket is devalued by a small fraction each time.
The problem with all this printing is that most people don't have earnings linked to inflation. So for every pound printed the TOTAL money supply is increased and the inverse is your pound in your pocket is deflated in value. Thus stuff costs more. Hence inflation in prices and deflating value of your pounds buying power.
Problem is once it gets out of control my post above becomes a self sustaining spiral. In most cases you can't earn enough fast enough to keep up with price rises because your earning in a fixed number of pounds which are losing value all the time.
QE isn't the same as printing money though is it ( which would devalue the £ ).
I thought QE was about buying back government bonds or other instruments from the banks, thereby putting more cash in the bank's coffers, for them to use to get the country going again, except that the money just sits in their coffers not helping anyone except themselves.
But QE affects many of us by reducing pension annuity rates thereby reducing our pensions - due to the values of long dated gilts going up as the Government buys them back and consequently the yields going down which then reduces annuity rates.
Won't devaluing the currency a bit make our exoports cheaper abroad? Haven't the Chinese kept their currency pegged artficialy low for this very reason/ Therefore is it neccassarily a bad thing?
Koro: QE isn't the same as printing money though is it ( which would devalue the £ ). I thought QE was about buying back government bonds or other instruments from the banks, thereby putting more cash in the bank's coffers, for them to use to get the country going again, except that the money just sits in their coffers not helping anyone except themselves. But QE affects many of us by reducing pension annuity rates thereby reducing our pensions - due to the values of long dated gilts going up as the Government buys them back and consequently the yields going down which then reduces annuity rates. But, I'm sure its more complicated than that.
QE doesn't involve the printing of paper money, but the creation of digital money (read: 'pretend', 'make believe', 'non existent', etc), which is then given to the banks and 'used' by the lovely banking people to 'buy' bonds, etc.
If you can imagine gaining full access to your bank account via your bank's system and simply typing £70,000,000 into it, you'll get the idea....
QE doesn't involve the printing of paper money, but the creation of digital money (read: 'pretend', 'make believe', 'non existent', etc), which is then given to the banks and 'used' by the lovely banking people to 'buy' bonds, etc.
If you can imagine gaining full access to your bank account via your bank's system and simply typing £70,000,000 into it, you'll get the idea....
Schnitzel von Rammstein: A bit like Italy in the late 80's then. They were going to chop 3 000's of their currency. They started to call it the Lira pesante or heavy Lira...
It was why the Italian cops were more than happy in the 80s to take neighbouring countries currency for traffic fines
QE = devalutation as I see it, so not only are savings losing value as the rate of inflation is higher than the bank return, but the actual value of those savings is also being eroded every time they bang in more so called QE.
Possibly makes our dwindling exports more competitive
G-San: the creation of digital money (read: 'pretend', 'make believe', 'non existent', etc),
Ok so if thats the case that must make the deficit we're being bashed over the head with the same. ie 'pretend', 'make believe', 'non existent',
Nail. Head. Bang on, Nickwiz.
Since 1971, when what became known as the Nixon Shock ended the direct convertibility of the United States dollar to gold, all major currencies have been fiat currencies, including the dollar, pound and the euro.
Because they are not backed by a physical commodity (i.e. gold), fiat currencies have no intrinsic value other than that conferred upon them by the issuer. Fiat currencies are just pieces of paper that we are told are 'worth' a dollar or a pound or a euro. (As someone mentioned, 'Monopoly money. Or think in terms of the 'money' issued by Zynga so you can 'buy' things in their crappy little Facebook games.)
The money scam rabbit hole goes much deeper than that, but I'm going to stop there as I need to do some work to 'make' more of this non-existent, theoretical force, these digits created on computer screens, so I can 'pay' my bills.
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