Printing money is the preserve of despotic communist leaders and throughout modern history has left a nasty memory for those who have lived through such extreme policies.
During the Second World War, occupied countries and Germany printed money, and for decades afterwards, stories of baskets filled with banknotes being taken into bakeries to be exchanged for just one loaf of bread, and people having to spend their entire salary in one day before it became worthless ensued.
In Juan Peron's Argentina, a policy of printing money and creating an artificial market wreaked havoc on an already chaotic economy in the 1950s, which eventually saw the dictator overthrown by the army leaving behind a legacy of massive inflation, missing protestors, and a path toward election of corrupt officials which has gone until today, with the general public not trusting the central bank, and inflation being a normal part of life.
In Russia, state owned businesses employing tens of thousands of people are inefficiently run, and often rack up debts. The solution? To revalue the rouble against the US dollar and transfer the debt to US dollars, wiping out the debt, and impoverishing the entire nation in the process who see their money become worthless overnight.
In Israel in 1985, the inflation rate that affected the Israeli Pound, locally known as the Lira, was so bad that it had to be scrapped by the government and replaced with an entirely new currency, which to this day is still called the New Shekel. At that time, it was possible to buy a 3-bedroom apartment in Tel Aviv for $25. Groups of undesirables mopped up entire neighborhoods and now control the market by renting unsuitable homes to people for a fortune.
The West, however, has always been a bastion of security and democracy, hence the major currencies are still held in high esteem, with no such history of wild inflation... until now.
The dictatorial, anti-business methodology that has permeated the British Parliament over the past year and a half has resembled that of the undemocratic world, and in forcing businesses to close and curtailing the free market upon which Britain's economy has not only thrived for centuries but become the envy of the entire world, there is now a massive price to pay, and as with most undemocratic, anti-business methodologies, inflation is one of the odious end results.
Andy Haldane, who is the Chief Economist at the Bank of England and has worked there for 32 years, has left.
He voiced concerns about rising prices as the economy flounders as a result of the lockdowns, and at his final meeting of the interest rate-setting monetary policy committee, he argued the Bank should shave £50 billion off its £895billion money-printing program.
The Bank of England has sought to play down fears that rock bottom interest rates and unprecedented levels of money-printing, known by its sugar-coated-pill jargonistic term quantitative easing (QE) could cause the economy to overheat and push prices higher as Britain bounces back from the lockdown-created recession.
The Bank itself conceded that inflation ‘is likely to exceed 3% for a temporary period’ in the coming months, resulting in it far exceeding the 2% target.
The votes within the Bank of England have unanimously sought to keep it below 0.1% this week, and even Andrew Bailey, the CEO of the Bank of England agrees, however the money printing program is alive and well and causing those who disapprove of it to show grave concern.
Mr Haldane is known for being very outspoken, and in September 2020, he famously said "Now is not the time for the economics of Chicken Licken", which is a European folk tale with a moral in the form of a cumulative tale about a chicken who believes that the world is coming to an end.
The spreadsheets do not lie, and the cold, hard fact is that the British economy shrunk by 20% in the first half of 2020.
Someone, somewhere has to pay the piper.