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    In recent weeks there has been a lot of talk about 'quantative easing', so what is it and what does it mean?

    At the beginning of this economic crisis I warned of the dangers of losing control of the money supply and pumping too much cash into the system along with excessive borrowing. I warned of the potential for a 'double dip' recession.

    Quantative easing is the last throw of the dice you take when you cant borrow any more. Its the modern version of printing money. These days money is not mainly notes and coins, it is represented by no more than electronic pulses. In the 1970's we learned about the dangers of printing cash and, it seems, we are now making exactly the same mistake as we did then and risk making the recession even worse and yes, causing a 'double dip'.

    We are told that it is necessary to reflate the economy and is needed because the many other Government initiatives of late have not worked.

    Just because this frantic activity by the Govenrment has not shown results does not mean that you need to do more. Sometimes it is best simply to do nothing and allow nature to run its course.

    The problem really though is not the amount of money in the system but the fact that it is not circulating in the way it ideally should. Just pumping in more money will not solve that one.

    The risks are massive. It can undermine trust and confidence in the bond markets and create massive inflationary pressures.

    The current level of government debt is now over £2 trillion. That is a massive sum. Lets put it into perspective. In 5 years the UK has increased the national debt by more than all the debt that we had previouslty borrowed in the last 300 years.

    Printing money is the route to fiscal and monetary destruction.

    The consequences are dreadful, taxes will have to rise when we should be trying to reduce them, unemployment could reach heights that are unprecedented and inflation could reach double figures within 2 years.

    The next Government will inherit an economic wasteland compared to the 'golden economic legacy' the present Government inherited. Putting this right will be a monumental task.

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