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Quantitative Easing

Welcome To Weimar

by | Friday, 23rd September 2011
The statements from within the global financial "leadership", and reflected in the mainstream press release mashup squad, have been staggering. There is "already a raging panic around the solvency of the European banking system", wrote the Telegraph's Jeremy Warner, "Most people will find the idea that more than four years after the banking crisis began, the banking system continues to require squillions of public money almost beyond belief".

The European Central Bank's "European Systemic Risk Board", a committee set up last December to manage the degree of panic in the system, began really stoking things up a couple of days ago, in a press release issued following their third scheduled meeting. They warned of a "rapidly rising risk of significant contagion [which] threatens financial stability in the EU as a whole".

Other quotations from various sources include:

You need a lot more firepower to be a circuit breaker!

We're on the eve of a new crisis!

We are entering a dangerous phase!

We need a broader firewall!

This is already a raging panic!

And what is the only solution that all these "economists", "financiers", "politicians" and "journalists", all of whom claim to know what is going on, can seemingly come up with? The ever increasing expansion of the money supply.

What's worse, they're not just suggesting more Quantitative Easing, they're demanding it! For them to suggest we are "entering" a dangerous phase is a simple lie. We have been in a critical phase of collapse for over forty years.

Expansion Of UK Money Supply 1982-2011

The UK money supply has been expanding at an almost exponential rate since the early 1980s until 2007, as can be seen in the above graph. There are a number of interesting things to note about the graph:

It shows clearly that Britain's economic "growth" has been no such thing. Our economy has "grown" by about 2% per year since 1980 - 60% or so. And yet the money supply has grown by approaching 400% in the same time. So actually, the British economy has collapsed utterly over that time.

The peak in the expansion of currency supply, and the subsequent plateau, corresponds to the beginning of the Bank of England's Quantitative Easing programme. A freedom of information answer from the Bank confirmed that QE failed completely. According to the Bank:

Quantitative easing would show up in our M4 data as a rise in deposits. If M4 is rising, you can assume that QE is working.

Oh dear. So, if QE has failed over the last four years, why is it the only solution to the problem that the Bank proposes? It becomes difficult to see any other reason than that the present collapse of the financial system is intentional. If that is the case, it should cross the minds of everyone working in the City of London that they are being used.

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