Yesterday, the Bank of England has announced that it will add a further stimulus of £50 billion to its Quantitative Easing programme. These funds will be released into the economy over the next four months.
Compared to the slow-release £100 billion Credit Easing announced only few weeks ago, this is actually printing and distribution of notes and electronic credits. If the money reaches where it is needed most, amongst small and medium businesses as well as local neighbourhood shops and for initiatives such as house repairs, setting up of local Academies and colleges, grants to students, loans to businessmen and women just setting up, and empowering people with skills sitting jobless who would benefit from a soft loan to buy a van and tools and get to working and earning a living, then it will be money well invested. It shall circulate in the economy and create work and wealth, and return to the banks with profits. When people are busy and money is circulating, they are so busy they eat outside and can afford to; occassionally take a taxi instead of crowding in a bus all the time; carry shopping from a supermarket by mini-cab instead of walking all the way home or by bus; replacing clothes and sagging furniture; putting good quality wallpapers in the lounge....etc, etc.
Buying cars, taking out a mortgage, brightening up the shop or local restaurant are other things where money could be well utilized, as well as provision of loans to hard-pressed families who at the moment borrow from high-interest money lenders. Church, community centres, all such places could benefit greatly from some soft-loan cash-flow.
The High Street banks now need to put into action a vigorous policy of lending to the local people, and this will see a resurgence of economic activity....It is great that it has come just before the start of the London Olympics. The enveiling of the Shard Building which brings its own glamour to the London skyline and will bring in many more wealthy people to the City, is a brilliant timing for London to capitalise on this. The thousands and thousands of visitors who visit the Olympics, some of them will wish to stay on, seeing the peace and quiet that dwells here, amidst an ambience of peace and prosperity and well-being.
Hopefully the gentlemen in Threadneedle Street and Whitehall are listening.