1000 times more damage than Hitler could do

1942-1945: Operation Bernhard seeks to undermine the UK economy.

2009: Bank of England does likewise, but with 1000 times more money.  And that’s just a couple of months: how far will they go with another year before an election?

Of course that figure of 1000 times neglects the devaluation of money in the meantime, and therefore grossly exaggerates the difference.  But there’s a serious point: Germans in the 1940s remembered the devastation that printing money had brought to the Weimar Republic.  In more recent times we’ve seen it only from afar, in Zimbabwe.  While the Irish government pulled back from the brink with an austerity budget, we’re just plunging headlong forward from our budget for denial.

The irony now is that this is really no more (or little more) than a partial acknowledgement of inflation that has already happened.  The inflation took the form of banks printing money in the form of mortgages, driving up property prices and transferring massive wealth from the highly-taxed productive economy to rich and low-taxed property owners.

Oh lookee, is it time to start saying I told you so?

Posted on May 9, 2009, in economy, uk. Bookmark the permalink. 3 Comments.

  1. Looked at from a different perspective, the price of gold has gone from around £17.50/gg at the start of last December to around £19.50 now, via £22 at its worst in ~February.

    But what annoys me is the boring conventionality. “Just throw more money at it!” and keep on banging away at such an approach. Car-company threatens to go to the wall? Throw money at it. Just as right-wing an approach as GWB in Iraq – “we’ve decided what we think is right for you, but it’s not working so we’ll throw more soldiers at it!”. Rrrrright. Think of something *imaginative* to do that I didn’t expect.

  2. I wouldn’t mind so much if the government used the money to invest in useful long term projects eg upgrading broadband infrastructure, main line rail electrification or replacing the nation’s ageing power stations with something more efficient and greener. Instead they are throwing money at short term fixes. Collectively we borrow too much and invest too little, so what is HMG’s solution? Create more money so we can go on borrowing and spending, whilst penalising real investment with ever more complex taxes on pensions, savings and earnings.

  1. Pingback: Prisoners Dilemma and Boom&Bust « niq’s soapbox

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