Finance Talk

Just Wondering, why doesnt the bank of england ( who i presume print the sterling ) just carry on printing more money? i meen, couldnt this end the "credit crunch"? What would be the disadvantages of this be? Could the B of E not just print as much as they liked?

thanks

Peter,

This could cause 'hyper inflation'.

During the second world war in germany the value of money was dropping so fast people had to go to the shop with a wheelbarrow full of cash just to buy a loaf of bread.

This is caused by the purchasing power of money dropping to quickly and could cripple the economy.

That being said it has been suggested this has been considered by the Government.

Crazy !!

Cheers,

BB

Yes I agree. Why not print more money to save the economic crisis.

Is there a limit on a number of money to be printed?

Pret immobilier

When the Bank of England "prints money" it also has to raise the equivalent amount of money ir "printed" in bonds which it then sells to financial institutions around the world. These bonds have an interest rate attached to them which the Government has to pay, usually quarterly, and a repayment date. This is the date on which the owner of the bond gets his money back. So you can see that "printing money" does cost the nation inertest and eventaully the money does have to be repaid. So it's not a matter of printing money and walking away!

Broker Boy