"The big, looming, monetary issue is "quantitative easing": that is, printing money. What happens is that the government borrows from the Bank of England, not from the markets. It expands the money supply to keep the economy going and also to counter deflation without simultaneously increasing government debt. The attractions are obvious, as are the dangers. The Robert Mugabe school of economics provides a salutary warning about uncontrolled monetary expansion in generating hyper-inflation. The road to Harare is not as long as we might hope. Monetary easing may prove to be necessary but will have to be managed with great skill and care: Too little easing and the crisis drags on – as in Japan. If there is too much, the authorities face the messy task of mopping-up liquidity by issuing bonds which add to the burden of borrowing or else we lurch back from deflation to inflation. So interest rates may soon become yesterday's story."
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Members of the Parliament of the United KingdomEconomists from EnglandPresidents of the Board of Trade (United Kingdom)Liberal Democrats (UK) politiciansPeople from York
Original Language: English
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Vince Cable
PC MP (born 9 May 1943) is a former British politician, who was the for from 1997 until 2015, and from 2017 until 2019. He was the from 2010 to 2015. He has been called 'The Sage of Twickenham'.
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