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The Bank of England given permission for quantitative easing

The term "quantitative easing" is something which will become more and more popular over the coming months as the UK government has effectively given the Bank of England permission to print new money. The bank is currently looking to buy up to £50 billion of private sector assets which will include a mixture of corporate bonds and commercial paper. Initially the financing for the operation will come from a significant increase in Treasury bills but this would only appear to be part one of the larger plan.

The government has already given the Bank of England permission to extend the £50 billion project and future acquisitions are likely to be financed by "printing money" which is the ultimate quantitative easing. This is also a very risky route to take as we have seen in countries such as Russia and even Zimbabwe over the last few years. Inflationary pressure, as well as reduced investor confidence in the economy and the country as a whole, is often a side effect of "quantitative easing", something which should not be underestimated.

Do not be in any doubt that "quantitative easing" is literally the last throw of the dice by a very concerned government looking to refinance and refloat a UK economy in severe trouble.

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