[R-G] [BillTottenWeblog] Finally, A Correct Move

[peripatetic]

But printing money and accounting it as "national debt" is not what most 
of "Central" (private) banks  do in the capitalist world?

I have read that in the US are ready to do the same when they will have 
to increase the sale of Treasuries and there will be no more foreign 
buyers (read China, Japan, Saudis). They call it "monetization of debt". 
The problem with this scheme (of money as national debt, which, 
matematically can only grow exponentially) is the risk (read: certainty) 
of a national debt explosion soon or later -what they are going to 
experience in the US soon-, which means out of control inflation and 
devaluation.

Another point is: why they are thinking about it just now to save the 
banks? Until yesterday tight money and the struggle against inflation 
was the orthodoxy (when the cost was just poverty and unemployment). Do 
you think that "printing" money to improve banks accounting will have 
any impact on the real economy (or social conditions)? I don't think so.

webabuser.blogspot.com

Bill Totten wrote:
> This article indicates that the Bank of England has finally turned to
> what should be the first prerogative of any nation: To coin and print
> the nation's money instead of allowing private banks to print most of
> it. Please see the comments I have interspersed. Bill Totten
>
>
> We must print more money, says Bank
>
> Governor appeals for urgent action to salvage Britain's shrinking economy
>
> by Sean Farrell, Financial Editor
>
> The Independent (February 19 2009)
>
> The Bank of England is to start 'printing' new money for the first time
> in thirty years as it runs out of options to kick-start the economy. The
> Governor of the Bank of England will write to the Chancellor within days
> to get permission for the unprecedented action.
>
> The Bank will create the money by buying government and corporate bonds
> from financial institutions for new supplies of sterling. Termed
> "quantitative easing", it is the modern equivalent of printing money. It
> is designed to put more cash into the economy, creating more money for
> companies to spend and for banks to lend.
>
> The move marks the most dramatic step taken yet by the Bank as it tries
> to stop the deepening recession turning into a slump. One of the main
> reasons for the financial crisis has been the unwillingness of banks to
> lend money after the sub-prime losses in the US.
>
> Critics have branded the action irresponsible and said it could stoke
> inflation and spark a run on the pound but the severity of the recession
> has driven the usually conservative central bank to throw caution to the
> wind.
>
> TOTTEN: What per se is irresponsible for government coining and printing
> its own money? The US Constitution reserves that function for the
> government. Is it more responsible to let private banks, that are
> addicted to making as much profit as possible as fast as possible to
> enrich their shareholders and executives, to print most of the nation's
> money in order to maximize the interest income they reap by loaning it
> into circulation? The "critics" who claim it is irresponsible for
> democratically elected governments - instead of profit-maximizing
> private banks - to coin and print the their nations' money are arguing
> against democracy itself: they are arguing, without saying so
> explicitly, that we can trust the greed of private banks more than our
> own ability to elect responsible government.
>
>
>