• Greshams Law

    A monetary principle stating that “bad money drives out good..”

    The Bank of England decided today not to throw more QE at the lending to business problem. Maybe they realised that all the previous QE amounts had been hoarded by banks who then went on to increase their reserves and increase their bonuses whilst generating huge losses.

    In the meantime the ECB is struggling to understand how to manage the Italian, Spanish and Greek economies in the wake of political upheaval which again is causing ‘good money’ to stay in more stable economies.

    The fiscal cliff in the US has been ‘postponed’ although the ‘bad money’ namely the huge debts on the county’s balance sheet is unlikely to be funded by any institution and taxes, ‘good money’, is not going to come from joe public.