Bank Of England Can’t See Beyond More Quantitative Easing

Yes, that is what the Bank of England is likely to say today: print more money, the Government spending is the only thing keeping the economy alive.

This is an horrendous trap, see FT here, we have fallen into, now that the UK is existing on printed money for its government financing, it will be difficult to see how this can be stopped. The Bank of England may need to keep extending the ‘window’ and I have no idea where that will lead, but Zimbabwe is the worst option and Japan, with 20 years of sclerotic economic activity, is the other.

Many economists are now openly saying more stimulus is needed, what they are not saying is that the markets are seriously considering another September to November event like last year; that is the fear. Not so much a double dip a as tombstoning.

However, why are no alternatives being put forward by the Opposition? The need for stimulus is quite clear, even to me. Allowing the economy to collapse to make Austrian Economists and goldbugs happy is not the answer.

However, the stimulus could be provided by tax cuts and holidays; OK, VAT did not really work as it was too small and mixed with Christmaes in any event, but there are options on income, property and business taxes.

The net affect in the short term will be to increase public debt as with QE, the difference is the sector being stimulated is the private sector, not the non-producing (in a fiscal sense) public sector.
This is what the Tories should be recommending, they need to look into their own ideology to see solutions and not be blinded by the socialists decrying only the State can save us. The state is bankrupting our futures at a record rate; time to stop it.

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