The financial columns last weekend were predicting a further round of what is known – erroneously – as printing money electronically, ie Quantitative Easing. For a brief explanation of what actually happens when the government resorts to QE, refer to this article
One gent commenting on
the Sunday Telegraph
article by Angela Monaghan, was not impressed: “oh no here…we go again ‘the Mugabe solution’ . no sorry you cannot print your way out of trouble because you have to produce VALUE which cannot be printed else you will inflate the currency to a worthless piece of paper”. Instead, he advocated devaluing the pound.
He is wrong on both counts; to begin with, devaluing the pound makes our goods cheaper in the world marketplace, which means we have to – and probably will – sell more of them. The problem with that though is that the more we sell, the harder we have to work. This is one of the great fallacies that our vastly overpaid economists never seem to grasp; they genuinely believe work is both a virtue and an end in itself, and the harder the better, with the caveat, of course, that it is other people performing it.
The analogy with liberated Zimbabwe
under Robert (come back Ian Smith, all is forgiven) Mugabe is fallacious. When Mugabe came to power he decimated the economy by, among other things, redistributing land (ie stealing it from white farmers) and handing it over to his loyal supporters.
Too late he realised – or probably still hasn’t – that a thousand small plots of land are not better than one massive farm. If the idea is to encourage subsistence farming, fine, but in order to feed the townsfolk and export (to earn foreign currency), economies of scale are needed.
Printing money in a country where the shops are empty will obviously simply result in prices rising, that is inflation pure and simple, but Britain is not a basket case like Mugabe-land or much of the rest of Africa
; the shops are full of goods, what is missing is the purchasing power – what Harold Wilson called “the pound in your pocket”. Printing money and spending it into circulation by creating real jobs would most definitely stimulate the economy. Maybe the government could order a few fleets of electric cars and hydrogen cars
; if nothing else this would allow the far-sighted entrepreneurs, companies and research institutes who are developing them to reduce their prices from the currently unaffordable to the merely extravagant.
Alternatively, the government could invest directly in or subsidise the handful of companies that are currently developing solar
, wind and wave energy for commercial or even household use. This would truly stimulate the economy unlike QE, which simply creates new debt and GIVES it to the banks.
If the reader is wondering why the government doesn’t do this, there is a simple explanation, the Treaty of Maastricht forbids it
. In other words, the British Government is a slave to the financial oligarchy, the same people who are at this moment demanding the people of Greece submit themselves to artificial austerity measures
so they can continue to pay their fictitious debts with real money to these same big banks who caused the financial crisis in the first place.
For this reason, both QE and the Maastricht Treaty should go, and if Call Me Dave is not prepared to stand up to Europe by creating credit debt-free in the interests of Britain, so should he.