Keynesian Print and spend: It will not solve a crunch

Even the Prime Minister has recently suggested a financial crunch is likely. But there he is saying we have growth and jobs and financial security in the run up to the General Election. In fact the world economic position is on a cliff edge. The UK is borrowing far beyond our ability to pay back capital; we have the biggest current account deficit since records began; our economy is completely unbalanced despite promises to correct this at the last election; our manufacturing is again in decline along with exports to the failing EU; the EU economic area is in deflation, which was said to be impossible if you use Quantitative easing which implies inflation. It just goes to show that simply ‘printing’ or creating money on a computer at a central bank, together with virtually nil interest rates does not correct over borrowing and bust. Sound money is not made from thin air. Whoever is in power after May will quite probably be dealing with a more difficult ‘crunch’ than 2008. Euro Crisis