Saturday, 8 October 2011

An open letter to the Prime Minister

Goal 89: To change laws for the better

I find the only way I can comprehend Quantitative Easing is to compare it to theft. Theft of the value of the pound in my pocket; in my bank account; in my salary.

The only ones who appear to be benefitting from QE are the banks who are getting free money to invest with.

I decided this evening to contact our Prime Minister to express my views. The letter is repeated in full below. Perhaps if you would also like to share in the supposed benefits of QE you could also contact the Prime Minister. You may find his contact details here: http://www.number10.gov.uk/contact-us/

Dear Mr Cameron,

I understand that your government has this week decided to inject a further £75 billion into the British economy: http://www.bankofengland.co.uk/publications/news/2011/092.htm

This concerns me as I still have not received any share of the previous £200 billion injected since 5 March 2009: http://www.bankofengland.co.uk/monetarypolicy/qe/amount.htm

I am married and have three children and, assuming there are 60 million British citizens, calculate now that your government owes me and my family £22,916 ( I have rounded this figure down.)

This will adequately compensate us for the loss of value of our home; our salaries; our savings; and our belongings – all of which have depreciated in value as a direct result of your quantitative easing policy.

It may be that you prefer to pay each of us separately and if so I would be happy to provide names and/or bank accounts details.

Looking forward to helping the country spend and save more money,

Yours sincerely,

Mark Smith

2 comments:

  1. hmmm. the tone is right but. actually qe only affects the value of pound, not the other assets that you suggest such as property. your salary should actually stay the same, or actually go up, in pound terms, but this is for your employer to decide, not mr cameron.

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  2. Hi,

    Since my house and other assets are valued in pounds, the assumption I'm making is that if I was to sell these assets - I would not get any more pounds for them and the value of those pounds is worth less.

    I accept that in the UK this may make little difference. If you and I sell our properties, we would each get the same amount after QE as we did before.

    But, we don't live in isolation. There are many individuals and institutions across the world who have also lost out through QE. For them, the situation is immediately worse. If they sell a UK property I expect they will now get less local currency than before QE.

    Of course it is more complicated than that and our currency is not yet decreasing in vlaue against other currencys to the extent I would expect because many other countries are applying similar policies.

    But, I do not want to assume that because the pound has held its strength so far, that it will continue to do so. If I sell an asset in the UK and want to invest abroad, I suspect QE has long term implications for reducing value.

    In the case of salary - I use this to buy goods and services and some are sourced in the UK, some are sourced abroad. I accept that for anything sourced in the UK there is no immediate loss, but there is a knock on effect from everything sourced abroad.

    As far my salary going up... You are hopeful ;)

    I think for a lot of people, it is going to be a hard struggle to persuade employers to increase salaries. Even though we have underlying inflation which is also eroding the value of what we earn.

    What would you propose instead of QE, or do you think QE is actually a good solution?

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