Inflation here we come

[BrilloPad]

Beaten to it by DP

My fault - please post replies here - http://forums.contractoruk.com/gener...-way-then.html

[Robinho]

What an appalling article.

Now assume the government switches to a nominal GDP target of 4.5%. The Bank would have to adopt a more expansionary monetary policy – perhaps by increasing the size or scope of its quantitative easing programme – in order to boost the value of economic output. Crucially, the split between inflation and real output would not matter: in theory the whole of the 4.5% increase in nominal GDP could be the result of higher prices.

Possibly the most retarded thing i've ever read.

If the BoE switched to a nominative target, i'd be seriously worried if there reaction to that would be to print a load more money. In fact, how on earth is the Bank of England supposed to increase the nominal GDP of the nation anyway? Obviously it's not going to switch to such a system as it would be exposed as being the completely pointless institution it is.

At least we'd be out of a triple dip recession though.

[Jeff Maginty]

..

[stevejohnson]

Call me a thick 'effing kn0bhead, but...

...if they really believe they can just magic up billions of new £££ out of nothing with no negative consequences, then why don't they just add three extra zeros to everyone's income, savings & house price, so that the average wage becomes 26million instead of 26grand? That way the UK would become the richest country in the world overnight.

because the negative effects are for you the people. Not those that create the money. Now go back pay your IR35 I SAID !

[SimonMac]

Call me a thick 'effing kn0bhead, but...

...if they really believe they can just magic up billions of new £££ out of nothing with no negative consequences, then why don't they just add three extra zeros to everyone's income, savings & house price, so that the average wage becomes 26million instead of 26grand? That way the UK would become the richest country in the world overnight.

Because there would be massive consequences, QE does not create extra money for you and mean, it means they underwrite extra loans from the banks, however people are reluctant to borrow more in a poor economy.