Why Easing is Pleasing - Yahoo! Finance

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Why Easing is Pleasing

By Malcolm Stacey

Hello Gang,

Are you like me? Does quantitative easing frighten you to death? I mean, we could all win at Monopoly if we had a little printing press in the corner. And we kept turning out a few hundred quid every time we landed on somebody elses square.

Isnt that what the Bank of England are up to now? Theyve just announced printing another 25 billion quid to pump into the UK economy and keep the all the businesses in business. Scary, eh? No wonder the euro is rising against the pound.

But it has to be done. If we get more mazuma into the economy, inflation will go up. I never thought Id be glad if inflation rose, but the boffins say thats the only way to get us out of recession. Inflation means we pay more for goods and services and that way the money circulates more.

So we need quantitative easing for the time being. The trick though, is to gradually stop printing money and let the real world take over. If we get growth going again, poeple will keep their jobs and spend more. Theyll also pay income tax and therell be less of a drain on government welfare payments.

Ill give you another reason why we shouldnt worry about QE. (I hate using initials, but Ill soon run out of pricey printing ink, if I keep repeating this long and ugly phrase). This other reason is that QE sends share prices up. Im not sure how this works, to be honest, but its probably the reason why share prices have been motoring, until the last few days, that is.

The UK is still in a recession thats after three quarters in a row. Experts thought we might be out of it by now. But were not. So the QE ploy is still necessary. Though I hope for not much longer. Rocking on.

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