37 billion in debt so far.

[graysblue]

so loony labour have busted all previous records with their massive borrowing,37 billion in only 6 months with experts predicting this figure will go higher,in turn taxation will have to rise in order to reduce the deficit.


we all know recent events are global so here is my genuine question.

can anyone explain why countries are not allowed just to print shedloads of cash in order to sort the problem.

 

[Aberdeen Shrimper]

so loony labour have busted all previous records with their massive borrowing,37 billion in only 6 months with experts predicting this figure will go higher,in turn taxation will have to rise in order to reduce the deficit.


we all know recent events are global so here is my genuine question.

can anyone explain why countries are not allowed just to print shedloads of cash in order to sort the problem.

Because you will de value the currency at a guess!!!!

If you create more currency without raising the value of the whatever backs that currency, the value of the currency drops. That’s called inflation — you'll need more and more pounds to buy the same loaf of bread.Currency is really just a piece of paper that stands for something of value. Increasing the amount of currency without increasing the value it represents just makes the currency worth less than when you started.

 

[Mad Cyril]

I'm just glad we are all in it together and the rich and super rich all pay their fair share.

I'm not an enconomist but countries can and do print money - where do you think all the money going to the banks comes from? There isn't a big stash of notes in a secret bunker.

The problem is more money kicking about leads to higher inflation. I assume the government also periodically destroys money as well - can anyone explain this better than I can.....be bothered to?

 

[graysblue]

Because you will de value the currency at a guess!!!!

If you create more currency without raising the value of the whatever backs that currency, the value of the currency drops. That’s called inflation — you'll need more and more pounds to buy the same loaf of bread.Currency is really just a piece of paper that stands for something of value. Increasing the amount of currency without increasing the value it represents just makes the currency worth less than when you started.

i thought that as well,but in these crazy times with goverments/nations either bankrupt or very skint i cannot understand the logic.

take the sub prime market which is the sole cause of the current meltdown.

i f each country just printed wads of cash in order to clear every banks debts would this not ease or cure the current problems.

 

[MK Shrimper]

i thought that as well,but in these crazy times with goverments/nations either bankrupt or very skint i cannot understand the logic.

take the sub prime market which is the sole cause of the current meltdown.

i f each country just printed wads of cash in order to clear every banks debts would this not ease or cure the current problems.

If you print more money, it becomes worthless and you'd end up like Zimbabwe where you'd need £500 just to buy a can of baked beans.

 

[Aberdeen Shrimper]

i thought that as well,but in these crazy times with goverments/nations either bankrupt or very skint i cannot understand the logic.

take the sub prime market which is the sole cause of the current meltdown.

i f each country just printed wads of cash in order to clear every banks debts would this not ease or cure the current problems.

Think of it like this. “I’ve got the last two tickets to see Southend v West Ham in the F.A Cup Final. Suppose you could spend as much as you want on those tickets.
Now, it turns out the game has been postponed for that night but a “B” team game has been scheduled, and MK, Glasgow and I have agreed to bolster the injury hit squad. We are pretty good and I’ve got a ticket for every one of you. How much would you pay me now?”
“Okay, now I just went to the copier and made thousands of tickets for the same seat. What will you pay me now?”

My hunch is that the prices may just slightly drop.
To show how the value of currency increases, I just looked at the tickets more closely. On of them is actually a VIP ticket in the Directors box, meal after with the Chairman and get to meet the 1st team after the game as well. What would you pay for that?”
In the case of a country, the value backing its currency is (roughly) the strength of its economy and the size of its GDP, or all the goods and services it produces.
If our economy grows, our pound stays strong compared to other country’s currencies. But if we just started printing paper, the value of those pounds would fall and we’d see prices rise at the same rate.

So printing more Pounds might help you pay a debt that was incurred in “old pounds,” but everyone would get hurt. People holding debt would lose because they'd get paid in worthless currency. Consumers would have to go shopping with a suitcase instead of a wallet. And the U.K. Treasury would have a hard time ever borrowing again. So as bad as deficits and debt are, inflation is worse.

 

[graysblue]

If you print more money, it becomes worthless and you'd end up like Zimbabwe where you'd need £500 just to buy a can of baked beans.

the people of zimbabwe are ruled by evil desspots hence why their inflation is mental.

put it this way,

lets assume every bank was back to normal(without the crazy lending to all and sundrie)after all the crunch is caused by banks not willing to lend to each other.

i cannot see how tihs would ignite high inflation .

 

[Pubey]

 

[Aberdeen Shrimper]

lol...........

Very good Jon

:D

 

[seany t]

the people of zimbabwe are ruled by evil desspots hence why their inflation is mental.

put it this way,

lets assume every bank was back to normal(without the crazy lending to all and sundrie)after all the crunch is caused by banks not willing to lend to each other.

i cannot see how tihs would ignite high inflation .

A similar thing happened in Italy though years ago. They thought to get around the issue of a downturn they'd just put more money into circulation. Accordingly, the financial regulators found out and just changed the amount that the lira was worth, meaning instead of carrying around a few hundred lira for your shopping, you now needed a few thousand.

I think a large part of it is also to do with the market relationship with other countries. For example, if our economy is strong and you don't get much for your pound here, then we're able to go abroad and reap the benefits there. However if we flooded our county with excess cash, then the oposite would happen. I think? I know as much about finances as I do Battrick...

Someone once told me that there is always a consistent amount of capital in the world (a bit like water), and that it merely gets redistributed amongst us all in different ways continuously*. I'd like to know if thats true or not. I suspect not...

* (eg. at the moment I imagine its something like 50% bank bosses, 25% the middle & lower class and 25% JK Rowling)

 

[londonblue]

so loony labour have busted all previous records with their massive borrowing,37 billion in only 6 months with experts predicting this figure will go higher,in turn taxation will have to rise in order to reduce the deficit.


we all know recent events are global so here is my genuine question.

can anyone explain why countries are not allowed just to print shedloads of cash in order to sort the problem.

That's what the Nazis did in the 30's to pay off the war reparations from WW1. It led to massive inflation, which they then blamed on the Jews. We all know the rest.

 

[graysblue]

for me,

consider this,whatever happens the rulers/leaders of the world will remain in their current luxury ie even severe recession will not alter their lavish lifestyles.

meanwhile innocent citizens will take the brunt of the fall out,personally i believe all goverments use the explained theories in order to keep us all under control.

idiots have put the world into turmiol whilst idiots run countries.

 

[Mad Cyril]

That's what the Nazis did in the 30's to pay off the war reparations from WW1. It led to massive inflation, which they then blamed on the Jews. We all know the rest.

I think it was the Weimar Republic, not the Nazis.

 

[Aberdeen Shrimper]

for me,

consider this,whatever happens the rulers/leaders of the world will remain in their current luxury ie even severe recession will not alter their lavish lifestyles.

meanwhile innocent citizens will take the brunt of the fall out,personally i believe all goverments use the explained theories in order to keep us all under control.

idiots have put the world into turmiol whilst idiots run countries.

I do not personally feel that i am being kept under control, it is a shocking state of affairs for this country to be in right now as well as the rest of the world but basic concepts of printing more money are really not the answer. Do you understand the reason why printing more money simply would not work and prices would rocket???

 

[Andyhsufc]

to put a more positive light on our debt levels though, i was surprised to hear that our debts level as a % of GDP are the second lowest in the G7 AT 43%. Japans is 180% of GDP! On the printing money thing, if people have more money to spend, that is going to lead to more demand which leads to higher inflation as businesses can put their prices up and know that people will still buy their goods.

 

[graysblue]

I do not personally feel that i am being kept under control, it is a shocking state of affairs for this country to be in right now as well as the rest of the world but basic concepts of printing more money are really not the answer. Do you understand the reason why printing more money simply would not work and prices would rocket???

yes i understand in theory.

consider these facts,

worldwide we are ruled by the chosen few this includes leaders of the banking sector ie the old pals act.

if we assume there are 5000 persons worldwide in total control of the current world population which is several billion people.

i cannot understand why those in control never remained silent regarding the crunch thus allowing for the print of more cash into the systems which only very few would actually know about therefore the many billions of people would never ever know.

just a little theory.

 

[Aberdeen Shrimper]

to put a more positive light on our debt levels though, i was surprised to hear that our debts level as a % of GDP are the second lowest in the G7 AT 43%. Japans is 180% of GDP! On the printing money thing, if people have more money to spend, that is going to lead to more demand which leads to higher inflation as businesses can put their prices up and know that people will still buy their goods.

100% spot of fella

Imagine this scenario............

If we print more money, prices will rise such that we’re no better off than we were before. To see why, we’ll suppose this isn’t true, and GreysBlue’s theory of printing more maney is a winner…… and that prices will not increase much when we drastically increase the money supply. Let’s suppose that Gordon Brown decides to increase the money supply by posting every man, woman, and child an envelope full of money. What would people do with that money? Some of that money will be saved, some might go toward paying off debt like mortgages and credit cards, but most of it will be spent. I know the first thing I’d do is go down to Argos and buy an Xbox or PlayStation 3.
I’m not going to be the only one who runs out to buy an Xbox or PlayStation 3. This presents a problem for Argos. Do they keep their prices the same and not have enough Xbox or PlayStation 3 to sell to everyone who wants one, or do they raise their prices? The obvious decision would be to raise their prices. If Argos (along with everyone else) decides to raise their prices right away, we’d have massive inflation, and our money is now devalued. Since you are trying to argue this won’t happen, we’ll suppose that Argos and the other retailers don’t increase the price of Xbox or PlayStation 3. For the price of Xboxes to hold steady, the supply of Xboxes will have to meet this added demand. If there are shortages, certainly the price will rise, as consumers who are denied an Xbox will offer to pay a price well in excess of what Argos was formerly charging.
For the retail price of the Xbox not to rise, we will need the producer of the Xbox, Microsoft, to increase production to satisfy this increased demand. Certainly this will not be technically possible in some industries, as there are capacity constraints (machinery, factory space) that limit how much production can be increased in a short period of time. We also need Microsoft not to charge retailers more per system, as this would cause Argos to increase the price they charged to consumers, as we’re trying to create a scenario where the price of the Xbox won’t rise. By this logic we also need the per-unit costs of producing the Xbox not to rise. This is going to be difficult as the companies that Microsoft buys parts from are going to have the same pressures and incentives to raise prices that Argos and Microsoft do. If Microsoft is going to produce more Xboxes, they’re going to need more man hours of labour and obtaining these hours cannot add too much (if anything) to their per-unit costs, or else they will be forced to raise the price they charge retailers.
Wages are essentially prices; an hourly wage is the price a person charges for an hour of labour. It will be impossible for hourly wages to stay at their current levels. Some of the added labour may come through employees working overtime. This clearly has added costs, and workers are not likely to be as productive (per hour) if they’re working 12 hours a day than if they’re working 8. Many companies will need to hire extra labour. This demand for extra labour will cause wages to rise, as companies bid up wage rates in order to induce workers to work for their company. They’ll also have to induce their current workers not to retire. If you were given an envelope full of cash, do you think you’d put in more hours at work, or less? Labour market pressures require wages to increase, so product costs must increase as well.

 

[graysblue]

look at australia,

the goverment have saved billions through the good times and will now give it back through tax refunds ect in order to boost their economy.

for many months gordon brown and his arselickers has been stating "there will not be any recession and the housing market will be ok blah blah blah" when in actual fact any village idiot could see it would end in tears.

 

[seany t]

as I believe AShrimper and a famous gangsta once said, Mo money mo problems.

In summary then, the outlook? Breezes...

 

[Aberdeen Shrimper]

look at australia,

the goverment have saved billions through the good times and will now give it back through tax refunds ect in order to boost their economy.

for many months gordon brown and his arselickers has been stating "there will not be any recession and the housing market will be ok blah blah blah" when in actual fact any village idiot could see it would end in tears.

And you spotted it a mile of didn't you??

:whistling: