Quantitave Easing/Fiscal Stimulus

[bobda]

Noticed the other day that this is going to occur...
http://www.independent.co.uk/news/business/news/ba...

Can someone explain it to me in laymans terms?
Surely the printing of more money only serves to devalue the currency even more.

[bobda]

Everyone is as bewildered as me, then....

[off_again]

I think its fair to say that none of the monkeys in charge have the faintest idea of what to do. We haven't been here before and its all uncharted. What is the best way? Unfortunately there are as many ideas as there are economists....

[paul.deitch]

^^^ agreed. No one has a clue what to do really, but they can't sit still and do nothing - political suicide. Economic forecasting is as difficult as the weather forecasting, about 3 days max if you are lucky. It similar to King Canute telling the tide to go back. The forces are so large as to be irresistable. But the basics are always the same - supply, demand and competitiveness. UK has to make itself cheaper in the context of world economies to be competitive. Ergo your salaries, in world terms, have to go down. Easiest way to do that is to let the £ slide by printing more money - it becomes worth less in some nominal currency. But this has the side effect of making imports more expensive too. Difficult equation to get right though. If the UK has some thing to sell that the world wants and is competitively priced, then exports will pick up and so will the economy. Problem is at the moment that every country is thinking the same thing. That seriously affects the fundamentals though. For an economist its a fascinating time.