Quantitative Easing and the Frugal Household
So once again, the Bank of England (and British Government) saw fit to churn out another £50 BILLION in cash, apparently bringing the total up to £375 BILLION of new money that's recently been (or is currently being) pumped into our failing, some may say spendthrift, economy.
Elsewhere, the US can do similar by way of the Federal Reserve, but what is happening in the Euro Zone, when the likes of Greece needs to impose further austerity measures in order to secure more 'bale-out' funding? Am I to assume that someone, somewhere, simply prints out more Euros?
Austerity measures were apparently imposed on Britain, but I don't know what they were or what they currently are, having witnessed absolutely no improvement in my personal financial circumstances, although the price of fuel (domestic heating and motor) seriously curtails any thoughts of living in a warm home or travelling without a specific need to travel.
Isn't our traditional British method of "QUANTITATIVE EASING" just a posh term for a BALE OUT? I'm no politician, nor am I an economist, but surely if the Bank of England is literally printing new money, we would expect to see some English notes pass through our own hands eventually, here in Scotland? Northern Ireland have their own bank notes, too, so come on guys, let's hear it from you across the water - how many Bank of England notes have passed through your hands over the past couple of years?
Or have I completely misunderstood the concept of how this 'easing' works? Isn't the presumption that it filters down through all the different levels until there's extra money (real money) circulating at consumer level?
What does QE do to the value of the pound? Surely, if the nation's pot of money is being topped up then there has to be a dilution occuring, a trickle of devaluation, meaning that more is, in actual fact, leading to less, over time? As far as I'm aware, devaluation of the GB pound - that's how I see it - occured in 1931, 1967, 1976, 2008 and I've kind of lost track, other than my understanding that it's been watered down by a further £375 BILLION since then. Do we know the percentage dilution?
Tread cautiously, frugal lifers, because somewhere along the line, this has to have a greater impact. Near worthless money in banks is earning close to nothing yet our 'anywhere els' investmets are being watered down continually.
What is the real answer for those of us who have little or no savings and who practically live hand to mouth each week, albeit debt free? Into what should we be investing our time, energy and meagre excesses?
NYK Media
Frugaldom
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