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The fiscal policy of quantitative easing has run short of steam before the date of the General Election and as yet it has failed to deliver at a level that positively affects the voters. Damn!
What to do next? I know, let’s print more money which will destabilise the economy in the medium term and increase massively the amount of debt that future generations will have to repay with a devalued currency but never mind. It will serve to allow the government to spend profligately up until the date of the forthcoming General Election.
The Bank of England's rate-setters have decided to pump an extra £25bn into the economy in their quantitative easing (QE) programme.
They also kept interest rates unchanged at 0.5% for an eighth month.
The Bank has already spent £175bn on QE, which involves printing money to buy assets from banks and other companies to stimulate the economy.
Originally the expectation was that quantitative easing would run out to one hundred billion pounds and that the maximum amount that the economy could bear was one hundred and fifty billion pounds. We are now rolling the presses out to two hundred billion pounds of debt which with arrangement fees, transaction fees, interest and currency devaluation will take some repaying over and above the unprecedented state of the public purse before a single penny of the above is taken into consideration.
We can only hope that the voters will not be blinded by the house of cards which is the current financial state of our finances.
