The Printing of Money or “Quantitative Easing”…….which is it?

The Payments Business Daily Update

Can someone explain to me please?

In the 1970’s during the disastrous Heath Government and all periods after, there was one major economic fact of life that was consistently drummed in to our heads by successive governments, our supposed economic luminaries, economists, and the mass media; which was this: the “printing of money” was deemed inflationary; and as far as I recall from my student days and my years in the City of London, in the banking profession, that is still the case. Especially if you have this “newly printed money” circulating in the economy and people’s pockets, and the country’s productivity cannot keep up with this “new” demand, brought about by this increase in the country’s money supply.

In other words; in this scenario, one of the key causes of inflation we were told, was and presumably still is: “too much money chasing too few goods!” This is particularly true now, given the country and nearly all of the Western industrialised world is on “lockdown”. Hence productivity is almost nil…is it not? Apparently, currently this is not the case! This “printing of money” is now called: “Quantitive Easing” (where did this term emanate from?) and the inflationary consequences are not even mentioned! So; what am I missing here? Do I have to unlearn all that I was taught in my former economic lectures, and experienced during my professional career to date? In such circumstances, economic language is meaningless; and governments simply tell the populace what governments want you to hear. So, what’s new Eliot, I hear you asking? Well perhaps someone out there can explain to me why and how this once esteemed and highly regarded simple economic fact of life re “the printing of money” and its inflationary effects, now seem to have been completely overturned. What would Milton Friedman have said? I am ready to be “re-educated!” Eliot C. Heilpern Director of Partnership The Payments Business elioth@thepaymentsbusiness.com

Today's News Headlines

Today’s News Headlines can be viewed here.  Today’s guest blogger is:

Chris Skinner
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