The IMF calls on the Bank of England to “stimulate” by cutting rates and quantitative easing. This is another great example of Keynesian economics at its finest. Debasing a currency does not create growth.
These politicians, worldwide, are short-sighted in the sense that they only care about the next election, which forces them to do whatever they can to make things better immediately. It is similar to a heroine addict that is trying to clean up but does not go cold turkey. Instead, they shoot up a little when they start to feel pain. No problem is solved and the addict is still sick and their health will continue to deteriorate.
What we need is not government intervention, but rather painful rehab, which is cleaning the bad, government influenced debt in our society and becoming clean, healthy countries again. Debasing the currency will only hurt middle and lower classes by taking their purchasing power away. When currencies are strengthened and prices fall, it helps everyone. Stimulus will never lead to a strong vibrant economy, like the one that was achieved in the late 19th-early 20th century. Sometimes medicine tastes bad but you have to swallow.Published in