Vir Cantium

I'm right, you know …

Option C: Do Nothing

So we have the latest instalment in Labour’s efforts to drag the UK down to the status of economic basket-case.

Bank of England Governor meets Chancellor to discuss printing money
Mr King met Mr Darling to discuss of increasing the quantity of money flowing around the system after the Bank’s policymakers admitted that recent rate cuts were proving ineffective in tackling the deepening recession.
Economists suggested that the move – known as quantitative easing – could be made within weeks in a bid to get people spending again.

Of course, if the government starts artificially pumping money into the economy, the prudent will probably put any extra money (assuming any of it comes our way) into savings, while the prolifligate will be rewarded for their previous irresponsibility.

In any case, printing money is to forget the lessons from history (Weimar Republic, cash in wheelbarrows and all that) and a certain southern African country currently spiralling towards economic oblivion.

Lowering the base rate below the already ridiculous level still won’t stimulate the economy, because it’s not the price of credit that’s the basic problem, it’s both the availability and the fact that no-one wants to take out a three year HP agreement when they don’t know if they’ll have a job in six months.

Philip Shaw, an economist at Investec, said: “There does seem to be a risk that the committee will not bring the Bank rate down any further and rely solely on quantitative easing for further monetary stimulus. However on balance the temptation for a further rate cut will probably prevail.”

Well, I guess that’s the lesser of two evils (though those surviving on investment income might disagree), but there seems to be scant consideration of the far more sensible option c: do nothing. Despite Labour’s best efforts to paint the Conservatives as the “do nothing” party, an increasing number of ordinary people are probably starting to think that doing nothing is the best thing that politicians should, err, do.

Gold is trading at $974. Just thought I’d mention it. In case you were interested. For any reason. Perchance.

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