Monday, 8 December 2008

Preparing to print sterling

Further to my They can't print gold post it seems New Labour are gearing up to print sterling in some quantity.

There is a new Banking Act currently before Parliament. It contains the following clause:
223 Weekly return
Section 6 of the Bank Charter Act 1844 (Bank to produce weekly account) shall cease to have effect.

(This insidious little clause seems to have been first noticed by Guido Fawkes.)

Section 6 of the Bank Charter Act 1844 requires the Bank of England to publish a weekly account of the amount of money, notes, silver and gold, in circulation.

So the new banking bill, whose ostensible purpose is to provide a statutory regime for dealing with failing banks, in fact clears the way for secret money printing.

All of us who live and work in the UK rely on the value of sterling, and yet it seems possible that the government is planning to debauch the currency. Printing money can lead to hyperinflation; however it will take a while for the extra supply of money to become apparent to the markets, and until then the government will have free cash to spend.

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