Quantative Easing.

Good morning everyone, I am just wondering how safe are our savings. The Bank of England and media financial experts are telling us that in the next few months the Government are likely to start on a period of year long Quantative Easing. If this is true as seems likely we need to make some decisions to try to protect our life savings. With this in mind I have a few questions which I would like your opinions on.
1/ Is Quantative Easing the same as good old fashioned Devalation.
2/ Does Quantative Easing cause inflation.
3/ Can the pund be devalued without causing inflation.
Brian 8451.

Re: Quantative Easing.

Quantative easing as I understand it is where a central bank buys assets from various sources with the aim of injecting money into the economy.The intention is to stimulate the economy
It is also a way of keeping inflation at a steady level but can mis-fire and cause inflation to rise.

Re: Quantative Easing.

Hi Antibrown, Thanks for the reply I assume those assets are the ones the market place are not interested in and I wonder where the money comes from printed or borrowed?

Re: Quantative Easing.

Brian, it is neither, it is electronically created money, virtual money in other words, it is only what they 'value' something as.

In other words, they tell someone that their asset is worth X amount and the company borrow money to that limit, if the company defaults then the central bank own their assets.

Re: Quantative Easing.

Thanks for that Antibrown I have also found a very useful video on the Bank of England site taking you through Quantitative Easing step by step. It seems safe to assume my savings are O.K where they are for the time being.

Re: Quantative Easing.

Hi Brian here is a good explanation of QE from the BBC

http://www.bbc.co.uk/news/business-15198789

Re: Quantative Easing.

Excellent Meg, even easier to understand than the Bank of England offering. It is somewhat comforting to know that the created money can be taken out of the system when appropriate. I had visions of Germany of yesteryear and wheel barrows full of money to buy a loaf of bread.