Later today it is quite possible the Bank of England will choose to invent a lot of money again. This is to help supply ‘liquidity’ or, credit to the UK’s national economy. The process is called Quantitative Easing – and you can read the BoE’s explanation of what they are doing here. The amounts of money they are prepared to ‘print’ (metaphor) or, create with a computer may be as much as £50Bn.
< – Hang on, there’s a fun bit coming – >
The UK has already spent £175Bn doing this since March of 2009 as the full effects of the banking and financial crash became apparent.
The whys and wherefores of these processes are apparently, complex, but they do all stem from our history and from one story in particular. It is a tale about a Scottish adventurer called John Law and his time in France at the start of the 1700s. A very clever Canadian filmmaker called Richard Condie made a film about Law’s story in 1978. I think it is still great now and I recommend you spend (geddit) ten minutes of your day watching and listening to the story about the man who invented paper money for us all.
Updated at 12.30pm: The Bank has announced it will extend the process of quantitative easing by another £25Bn. Larry Elliott of The Guardian has the story here.