Via Conservative Home’s blog The Deep End, an interesting question about QE: If the Government is just going to print money, why can’t we have some?
Of course, if you started to give the cash directly to the people, then they might finally understand that our entire economic system runs on funny money. And who knows what would happen then?
Henry Ford is supposed to have answered their question:
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
Maybe or maybe not but therein is the awful unspoken truth about QE: the pound in your pocket was being systematically undermined long before the Bank of England’s QE programme. The money supply tripled between 1997 and 2010 but if not through QE, how?
The economist J K Galbraith wrote:
The process by which banks create money is so simple that the mind is repelled.
Banks lend money into existence at interest when they extend credit. Surprisingly few people know this, even amongst those who really should. Here are ten fairly easy books which explain how economies grow, why they crash and what could be done about it — and the money creation process is central:
I’m sure that “funny money” — money which can be created on a whim — is undermining the basis of society, just as the economists Keynes and Mises said it would. That’s why I co-founded The Cobden Centre and why I campaign against injustice in the financial system.
I’m glad concerns about funny money are becoming more mainstream, but let’s hope we don’t have a revolution before tomorrow morning. Better things can be done.