Yet more new money

Present economic circumstances seem perilously close to those described by scholars of the monetary theory of the trade cycle:

The Bank of England has pledged to pump another £50bn into the economy as it steps up efforts to haul the UK from its worst recession in at least two decades.

via Bank of England to pump another £50bn into economy as it steps up recession fight – Telegraph.

China has given its clearest warning to date that emergency monetary stimulus by Western governments risks setting off worldwide inflation and undermining global bond markets.

via China fears bond crisis as it slams quantitative easing – Telegraph.


Continuously injecting additional amounts of money where it creates temporary demand, together with an expectation of continuously rising prices, draws labour and resources into use in areas which will last only as long as the supply of new money.

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