Feeling strangely, quietly, a little bit optimistic

I have checked and he has a twitter account, would you be able to ask questions there?
If not, we could ask GN HQ if we could have a Q and A with him on the forum.There seem to be many with an interest in economics here.

growstuff perhaps you could have a conversation with Mervyn King about it.

Prentice

I seriously doubt that Mervyn King is either ignorant or gaslighting!
Of course he knows that the Bank of England issues money .
His point is that there has been too much issued.Am sure he also knows that other factors are at play too as regards inflation, but he says that too much quantitive easing has contributed greatly to this problem.

The issue is not that there has been too much QE. It's that QE hasn't been directed efficiently. Too much has ended up with people who don't spend in ways which increase money flow. It's ended up with banks, who just play virtual Monopoly with each other, and individuals who stash it away offshore.

Banks lend much less to business than they did 15 years ago. Most of their money goes into property-based deals and speculation.

I seriously doubt that Mervyn King is either ignorant or gaslighting!
Of course he knows that the Bank of England issues money .
His point is that there has been too much issued.Am sure he also knows that other factors are at play too as regards inflation, but he says that too much quantitive easing has contributed greatly to this problem.

Prentice

I agree DaisyAnne and apparently so does Mervyn King the former governor of the Bank of England.
He has been scathing about the amount of non needed quantitative easing that has been going on. He says that although some was necessary at the time of the pandemic, there was too much done by central banks.It has helped push up inflation.
If printing money was all that was needed, no nation would be economically in the doldrums.It is a complicated and delicate balance to get things right.

No! Many countries have a currency which is tied to other countries or a standard such as the Euro.

I agree that "printing money" isn't all that's needed. The money needs to be directed to where it will be spent and circulated, for the maximum benefit to everybody living in a country. It also needs to be tied into taxation for those who can afford to pay most at the right time - certainly not when a country is facing recession.

The lunacy of the Truss/Kwarteng plan was that money was to be created to benefit those at the top of the pile without any coherent plan to ensure the money circulated throughout the country, including back to the Treasury.

Prentice

I agree DaisyAnne and apparently so does Mervyn King the former governor of the Bank of England.
He has been scathing about the amount of non needed quantitative easing that has been going on. He says that although some was necessary at the time of the pandemic, there was too much done by central banks.It has helped push up inflation.
If printing money was all that was needed, no nation would be economically in the doldrums.It is a complicated and delicate balance to get things right.

Mervyn King knows perfectly well that the BoE is directly responsible for the supply of money in the UK. And that it issues money.

He's either very ignorant or gaslighting if he thinks that our current inflation is due to too much money in the economy. It is due to price rises in externally sourced products and has now been made worse by the BoE pushing up interest rates, which has sucked even more money out of the economy; money which people faced with the rising cost of living, cannot afford to lose.

Personally I prefer to take my information from the Bank of England, or bona fide academic research.

Tamayra

There’s lots of evidence that this is the truth
Trump was overwhelmingly voted back in as president

Please tell me you’re joking. There is overwhelming evidence that Trump LOST the election, full stop.

Causes of hyperinflation

Start

What is consistent in almost all cases of hyperinflation is a number of rare exogenous
circumstances:

• A ceding of monetary sovereignty (usually in the form of foreign denominated debt, a currency
peg, etc).
• Extraordinarily unusual social circumstances (war, regime change, etc.).
• Very low levels of faith in government during regime change (high public mistrust).
• Ineffective government response or rampant corruption.
• Combustible political environment.
• A collapse in the domestic economy.
• A breakdown in the tax system.
The most notable environments involving hyperinflations are war, regime change, government
corruption, output collapse and a ceding of monetary sovereignty.

End

Paper can be downloaded

papers.ssrn.com/sol3/papers.cfm?abstract_id=1799102

Would anyone like to tell me which , if any, of those conditions apply in the UK?

growstuff

It wasn't Maizie who discovered that the UK prints its own currency. It's a factual description of the way macro-economics in a sovereign economy works.

No, it wasn't me. It was the Bank of England

P 14 on.

www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/quarterly-bulletin-2014-q1.pdf

I agree DaisyAnne and apparently so does Mervyn King the former governor of the Bank of England.
He has been scathing about the amount of non needed quantitative easing that has been going on. He says that although some was necessary at the time of the pandemic, there was too much done by central banks.It has helped push up inflation.
If printing money was all that was needed, no nation would be economically in the doldrums.It is a complicated and delicate balance to get things right.

It wasn't Maizie who discovered that the UK prints its own currency. It's a factual description of the way macro-economics in a sovereign economy works.

Current inflation in the UK hasn't been created by printing too much money!

The Weimar Republic had to print money because it was paying debts in foreign currencies. The situation got out of control, so it couldn't tax the money it created out of circulation, nor could it produce goods for people to buy.

MaizieD

cc

Grantanow

I don't feel optimistic. The mess created by Truss will mean cuts and tax rises over the next few years. Russia and China will be difficult. Trump or some equivalent may make it to the White House and the Democrats may lose control of Congress. The world economic situation is not good and the outlook for the UK is inflation, recession, higher mortgage rates and little help with energy bills after April 2023.

I agree with this. Truss's incompetence and lack of understanding of economics has cost us all a huge amount of money, nationally and personally. Our reserves are lower and our interest rates are highter. Personally I feel that what she has done is virtually criminal.

We are not running short of money. The UK is not a household or a business. it can issue its own money.

In fact our so called 'debt' comprises about 1 third money that the Bank of England has created by Quantitative Easing since 2008 and is not 'owed' to anyone. About 27% is bonds and gilts held by overseas investors, on which the BoE pays regular interest, and the rest is pension fund holdings and savings of individuals. If you have an NSI account or Premium bonds you own some of the UK's 'debt'. And in the case of NSI, are probably benefitting from higher interest rates...
Why should your savings, or pension funds' investments, be 'paid back'? Do you want it back? Because that's what 'paying off the debt' would do...

All that 'saving money' by cutting state spending, as Hunt & Sunak plan to do, will do is make people lose their jobs and businesses fail.

There are very hard times ahead and no necessity for them...

The government should be investing money in public spending, not cutting back.

Didn't the Weimar Republic print a lot of money? If other countries do not trust our economy, the markets will still devalue our currency. If you print too much money and create inflation, you will have to tax some money out of circulation.

Surely, what you have to prove - and it's so much more complex than MTH* economics - is that your printing of money is followed by using it for growth. Growth can be obtained by doing many different things, so you also have to show a sensible plan for starting at the beginning (or beginnings) and moving through the areas which will grow an economy.

I am not sure that, despite your attachment to the discovery that we print our currency, the greatest arguments aren't still around "which area of growth are we going to back".

*Mrs Thatcher's Handbag.

I am assuming that for free-marketeers investing in public spending is a no-no partly because it is a long-term initiative; it stimulates aggregate demand but too s-l-o-w-l-y for the private sector to harvest the benefits, do you think?

I think the 'free marketeers' are deliberately blind to the fact that public spending is an immediate opportunity for private enterprise to benefit.

When you consider that the state produces virtually nothing in the way of goods and services, all state funded public services have to be supplied by the private sector they should have an immediate gain. Not only from contracts for supply to the state run services but from the spending of properly remunerated public sector employees.

Austerity just significantly reduces these opportunities. It also reduces the market for private enterprise by making a large number of people either poor from inadequate pay increases or from losing their jobs. What private UK or foreign investor is going to invest in a declining economy?

We saw this happen under the tories post 2010; it didn't work then, why should it work now? Especially now that we have impoverished ourselves by cutting our ties with our largest market which made us so attractive to foreign investment as they could sell into the EU as well as the UK. We are never going to regain that advantage.

I think your last paragraph is absolutely correct, Dickens.

LondonMzFitz

The truth will soon come out and you will be thankful for what Trump and his team has done for you. Stop watching the MSM as its just a propaganda machine owned by the deep state.

A "QAnon" conspiracy theorist, clearly. Rational debate with such is impossible. Not even worth the effort. Your facts / findings will be ignored!

Ilovecats2

I found my message but can I point out that while Trump was in office there were no wars and he spent a lot of time creating peace with other countries. Anyway you will soon find out the truth and when you do, I hope you hang your head in shame.

Trump was President 2017 to 2021.

In 2017, 55 armed conflicts occurred in 29 states and territories: Afghanistan, Azerbaijan, Colombia, Cyprus, the Democratic Republic of Congo (DRC), Egypt, Eritrea, Georgia, India, Iraq, Lebanon, Libya, Mali, Mexico, Moldova, Myanmar, Nigeria, Pakistan, Palestine, the Philippines, Somalia, South Sudan, Sudan, Syria, ...

In 2018, 69 armed conflicts occurred in 30 states and territories: Afghanistan, Azerbaijan, the Central African Republic (CAR), Colombia, Cyprus, the Democratic Republic of Congo (DRC), Egypt, Eritrea, Georgia, India, Iraq, Lebanon, Libya, Mali, Mexico, Moldova, Myanmar, Nigeria, Pakistan, Palestine, the Philippines, ...

In 2019, as above. And also President Donald Trump became the third president in U.S. history to be impeached. How can you suggest there were no wars while Trump was in office when - statistics, actual statistics -
2017 Afghanistan, 14 US Soldiers killed.
2018 Afghanistan, 14 US Soldiers killed.
2019 Afghanistan, 21 US Soldiers killed.
2020 Afghanistan, 11 US Soldiers killed.

I suggest, Ilovecats2, you need to broaden your media viewing, because your information is more than incorrect, it's dangerous.

Please, please prove to me that Trump isn't self serving, unfit for office individual and I'd do more than hang my head in shame, I'd throw a party.

MaizieD

The government should be investing money in public spending, not cutting back.

I am assuming that for free-marketeers investing in public spending is a no-no partly because it is a long-term initiative; it stimulates aggregate demand but too s-l-o-w-l-y for the private sector to harvest the benefits, do you think? Apart from the fact that they don't believe in state-spending as a principle anyway.

They see the private sector as the main driver of economic growth - and consumption. So they, government, want to take a less active role and allow corporations etc to invest in the market activity. Which benefits not only them personally, but their donors and backers.

Isn't that the reason why Labour are always accused of tanking the economy - because their investment in our public services is not a short-term investment, and the benefits are not immediate?

But Truss' wizard plan of trickle-down was equally a long-shot, the debatable benefits of which would not have happened overnight (and for the poorest, maybe not at all)?

The question is - what drives overall economic growth? I'm an utter novice when it comes to economics, but I assume basically (and simplistically) that if people, consumers, don't spend on goods and services, then the economy will not grow? And when the numbers of those consumers who are hanging on to their money grows to include middle-income earners, what then? Impoverished people don't have disposable income and the middle-class now have less of it and what they have they will hang on to because of an uncertain future. The Austerity net has gradually increased its catch. Where is this national growth going to come from - is my question to free-marketeers.

Ilovecats2

I put a comment on here and now cannot see it. What happened to free speech??

I can see it.
Maybe refresh your feed?

sandelf

HPQ I do agree. It will take time to achieve much BUT how fabulous to hear Sunak publicly supporting integrity, professionalism and accountability! At last. For too long the 'values' of Minder (it ain't a crime is it?) have been accepted.

Braverman is a disaster and reappointment does not suggest Sunak even understands integrity, professionalism and accountability.

Such a pity.
I thought he would be better than this.

Tamayra

There’s lots of evidence that this is the truth
Trump was overwhelmingly voted back in as president

I don't dispute he had (and still has) support but it is certain that he was not voted back in as president!

Ilovecats2

Lets get a few things straight Trump is a good guy and not the bad guy the MSM paints him to be. If it wasn't for him we would be in permanant lock down now, or in fema camps or dead, and they would have had mandates to force us to have the jab. Biden and the democrats work for the deep state and they want to depopulate the world. Trump and his team are fighting for our freedom. Putin is also not the bad guy he is painted. He went into Ukraine to get rid of the Bio labs there as they were working on bio weapons to use on humanity. He also went in to end the child traffiking that is going on there and has freed many children. I have friends in Ukraine and the USA and things are not as they are portrayed in the news. Trump is hated by the deep state as he is standing in their way and stopping them destroy the world so they are constantly telling lies about Trump. The truth will soon come out and you will be thankful for what Trump and his team has done for you. Stop watching the MSM as its just a propaganda machine owned by the deep state.

And there you have it folks - Qanon conspiracy theories in action. Along with the British Royal Family are all actually green Lizards, etc. etc.

If it was not so dangerous it could be funny!!!

cc

Grantanow

I don't feel optimistic. The mess created by Truss will mean cuts and tax rises over the next few years. Russia and China will be difficult. Trump or some equivalent may make it to the White House and the Democrats may lose control of Congress. The world economic situation is not good and the outlook for the UK is inflation, recession, higher mortgage rates and little help with energy bills after April 2023.

I agree with this. Truss's incompetence and lack of understanding of economics has cost us all a huge amount of money, nationally and personally. Our reserves are lower and our interest rates are highter. Personally I feel that what she has done is virtually criminal.

We are not running short of money. The UK is not a household or a business. it can issue its own money.

In fact our so called 'debt' comprises about 1 third money that the Bank of England has created by Quantitative Easing since 2008 and is not 'owed' to anyone. About 27% is bonds and gilts held by overseas investors, on which the BoE pays regular interest, and the rest is pension fund holdings and savings of individuals. If you have an NSI account or Premium bonds you own some of the UK's 'debt'. And in the case of NSI, are probably benefitting from higher interest rates...
Why should your savings, or pension funds' investments, be 'paid back'? Do you want it back? Because that's what 'paying off the debt' would do...

All that 'saving money' by cutting state spending, as Hunt & Sunak plan to do, will do is make people lose their jobs and businesses fail.

There are very hard times ahead and no necessity for them...

The government should be investing money in public spending, not cutting back.

Ilovecats2

I found my message but can I point out that while Trump was in office there were no wars and he spent a lot of time creating peace with other countries. Anyway you will soon find out the truth and when you do, I hope you hang your head in shame.

... and there you were thinking we were denying you free speech when it was probably just your computer settings in relation to the number of messages shown per page!

I do wonder how many other assumptions you've made through a knee-jerk reaction - politically I mean...

Grantanow

I don't feel optimistic. The mess created by Truss will mean cuts and tax rises over the next few years. Russia and China will be difficult. Trump or some equivalent may make it to the White House and the Democrats may lose control of Congress. The world economic situation is not good and the outlook for the UK is inflation, recession, higher mortgage rates and little help with energy bills after April 2023.

I agree with this. Truss's incompetence and lack of understanding of economics has cost us all a huge amount of money, nationally and personally. Our reserves are lower and our interest rates are highter. Personally I feel that what she has done is virtually criminal.