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Martin Sewell: Printing money Quantitative Easing may sound harmless, but it has evil consequences

Screen shot 2011-06-15 at 21.45.34Martin Sewell is a family Solicitor from Kent.  He is also an Anglican Reader.

You can often tell that the truth about something has become uncomfortable for its proponents when they re-brand it with a subtle change of terminology. In the military field, “civilian deaths” morphed into “collateral damage” and “abortion” has become the eminently reasonable “Woman’s Right to Choose.”  In the relatively recent past, we have seen that old villain “inflation”, which used to dominate the news headlines on a monthly basis in the 1960s and 70s, receive its long-overdue makeover.

Today nobody is much bothered about “Quantitative Easing” and many, outside of the financial services industry or the coterie of political junkies, could not easily explain its meaning, though when it is put in the simplest of terms most readily know they dislike it - which is why its true meaning is kept below the radar.  Each month, the Governor of the Bank of England adds a few zeroes to the government balance sheet, the printing presses produce more banknotes and your cost of living rises.

Quietly stealing the value of our money is not entirely unpopular. It lets governments off the hook, so that the consequences of their economic policies are deferred. Likewise, the spendthrift, the speculator, and those with industrial muscle, who can ride the wave, keep ahead of the curve, but the latest analyses of the phenomenon has demonstrated that there is not, in fact, a single rate of inflation as we have commonly been led to believe.

The impact varies across the social spectrum. The consequent devaluation of the pound inevitably means that those commodities which we import cost disproportionately more. This “basket” of purchases, for those of modest means, include foodstuffs, children’s clothing, public transport costs, and energy. All are necessities which predominate in the spending patterns of the less well-off. Money is also an imported commodity, so that whilst the cost of secured credit, such as mortgages, may be low for those trusted with such borrowing, the risk posed by the poor on more vulnerable incomes will inevitably rise, and with it the cost of their credit.

The evil consequences of that weasel-worded term ”Quantitative Easing” has even escaped the analytical mind of our Archbishop of Canterbury as he sought recently to to add morality into the public discourse, yet is it not amongst the most pernicious of sins against the poor?  “Thou shalt not steal” is a cross-cultural principle, and a special contempt has always attached to those who do so at the expense of the poor and vulnerable. Yet we seem collectively to exhibit a reluctance to accept the moral dimension of the phenomena. It is all the worse because a deception is built upon the theft of money value.

Government may give “inflation rises” to “deserving and undeserving” dependents alike, but the figure is calculated with reference to a broad basket of commodities which the poor can never think of purchasing . What they do purchase leaves them worse off by the month. In this sense Quantitative Easing - inflation - is also highly discriminatory. It probably least hurts the sophisticates of the “Governing Classes”, though those usually sensitive to such phenomena are strangely quite about this aspect.

The deepest irony is that with such “inflation rises” the State is given compassion credit for “caring”, whilst simultaneously being the source of the malady.  “Honest money”, though a flagship of conservative thinking, is remarkably congruent with the interests of the poor.  All this escapes the opprobrium of Church, unions and politicians across the party spectrum, alike.  Quantitative Easing is not simply an economic tool.  It is easy to understand why governments choose to do it; it makes the politician’s life easier, but that does not make it right.

At its core, Inflation/Quantitative Easing - call it what you will - is a moral issue and as it begins to rise it is perhaps time that we started to condemn a little more and understand a little less - or am I being too “judgmental”?


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