CREDIT STARVATION?

A prominent economic adviser has stated recently, "Credit starvation is the biggest problem facing the UK economy and increasing the supply of central bank money via purchases of government securities should help to loosen these restrictions and boost the supply of money and credit."

Polko looks at this from another angle..

Greed and continued access to hard sell/low cost credit by the many has been the biggest problem facing the UK economy for some time now.

As I write this, the Bank of England is expected to drop interest rates again in the next 10 minutes or so, backed by a new form of 'quantiative easing' - increasing the money supply by any other name. Only it's not so new a concept. Take a look in the history books and see the problems that arose in 1797 in the UK when the money supply was expanded by the setting up of a string of new banks all over the country backed by the Bank of England gradually increasing the issue of paper notes. For those not bothered to read up on the period, it was not a pretty picture for the ordinary man who faced prices rising by 7 times their value in the decade before.

The particular strain of 'easing' the Bank of England has been discussing in the last month or so - not just flooding more money into the system but using it to buy up government assets - was also tried in Japan in the early 90s. Now't much happened to help the Japanese economy. Little evidence it will help now then?

I may just have the answer - I think I'll go out and buy an over-priced new car on a 35 year 0% APR loan? Gotta do my bit for the UK economy you know. So long as it's made or at least the spares are made in the UK of course!

Meanwhile, in another life, Polko is busy stashing all he can to exit this island before the sea swells and the land crumbles under the weght of all the prole kids dropping out of ill educated female loins across estates all over the land. God Bless this not so green and not so pleasant land.