THE BANK of England (BoE) yesterday unleashed another round of Quantitative Easing (QE), adding another £100 billion to the amount of ‘free’ money they have handed out to the speculators and banks in an increasingly desperate attempt to kick-start British capitalism.
Since the coronavirus pandemic hit the UK back in March, the BoE has increased QE by £200 billion – bringing the total amount of QE to £645 billion, and now it will reach a massive £745 billion with the promise of more to come.
QE was first introduced after the world banking crash in 2008 in order to save the banks from their crisis.
Workers were promised that all this free money would be used by the speculators to invest in financial assets such as shares.
According to the BoE website this would mean making ‘businesses and householders holding shares wealthier – making them more likely to spend more, boosting economic activity’.
The idea that the country is crammed to the roof with shareholding households is beyond belief. It is nothing more than a pathetic cover for the reality that all this free money went straight into the pockets of the bankers and speculators who used it to enrich themselves while the working class were driven into the ground paying for it.
When QE started in Britain in 2009 it stood at £200 billion and since then has grown astronomically as the BoE attempts not just to bail out the banks but save British capitalism from complete collapse.
The working class paid for this with over a decade of savage austerity cuts to services and pay inflicted by the Tories. The price to pay for this latest explosion of worthless paper money will be massive if the capitalist class have their way.
In fact, the money markets immediately made it clear yesterday that an extra £100 billion was chicken feed. Instead of the normal surge in stock markets at the promise of more free money the FTSE share index actually declined. They had been demanding £200 billion.
Earlier in the week, Paul Dale, chief UK economist at Capital Economics, warned that the crisis was much worse than the BoE was saying and that the government’s furlough scheme is ‘masking the true fallout’ from the crisis which will see millions thrown out of work.
Dale forecast that the BoE would need to deploy another £350 billion in QE if it was to have any hope of warding off economic collapse.
In fact pumping billions into the money markets will do nothing to save a bankrupt British capitalist system. It will not put money in the pockets of workers who have been hammered by the crisis and are facing mass unemployment and poverty.
Nor will QE lead to investment in productive industry which is crashing down across all sectors and producing no profits for the shareholders and bosses.
All it has done in the past is to massively inflate share prices of companies that are nothing more than ‘zombies’ existing entirely on debt and that are now collapsing under the weight of this debt mountain, and this latest round will only accelerate the crash.
QE and all the old monetary weapons in the BoE’s arsenal cannot halt this collapse, it will be fought out in the class struggle as the ruling class attempts to impose the crisis on the working class through mass unemployment, wage cuts for those lucky enough to have a job and the complete destruction of public services.
Workers will not peacefully submit to seeing their lives destroyed to keep this rotten bankrupt capitalist system from collapse.
Confronting this weak bankrupt capitalist system is a powerful working class. The issue of the hour is to build the leadership of the WRP and Young Socialists to organise the working class in a general strike to bring down the Tories and go forward to a workers’ government that will expropriate the bosses and bankers, put an end to this bankrupt capitalist system and advance to a socialist planned economy.
This is the only way forward for the working class today.