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Is quantitative easing the ultimate game of poker?

As Alistair Darling, the Chancellor of the Exchequer, confirms that the Bank of England has been given a £150 billion budget to start acquiring financial assets to try and free up liquidity in the system, even those inside the Bank of England agree there is no guarantee that this massive risk will pay off. Opinion is very much mixed as to the success rate of quantitative easing in the past with the last major country to attempt such a feat being Japan where the policy took years to kick in.

When you consider the £500 billion toxic assets insurance plan together with the £150 billion quantitative easing budget, the failure of these policies could literally bankrupt the UK. National debt is set to increase to approaching £2 trillion with some experts suggesting the figure could reach as high as £3 trillion. While Gordon Brown attempts to bring in the power of the US government with a similar policy for the US economy, there is real concern that unless there is follow-through from other countries around the world the UK situation could actually worsen in the short to medium term.

Even though Gordon Brown will not contemplate failure, the last 12 months have seen little or no impact from his much praised bank rescue packages. Cometh the hour cometh the man!

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