The Bank of England is pumping another 25billion quid into the UK economy - up to a total of 200billion quid (Source).

Fantastic if you're a large corporation/bank in the UK - they 'ease' by buying corporate bonds. You get the cash first, spend at normal prices, by the time it feeds down to the poor/middle class prices have risen (the ‘Cantillon effect’). It's great way to further erode the already shrinking middle class and transfer wealth (after all, as printing more money devalues existing fiat, it’s also a form of wealth redistribution) to your buddies…then blame the free market for it and increase government intervention!

Quantitative easing may work in the short term by propping up prices and creating the illusion of prosperity but in the longer-term it means none of the necessary restructuring – liquidating of bad business (malinvestment) – will occur. The result is another more severe bust in the future.

Money 101

It all stems from a misunderstanding of what money actually is. Money is a medium of exchange; it represents a claim to an existing – already produced – good. But money itself is also an economic good like any other commodity in the economy and is therefore subject to diminishing marginal utility – in other words, if you create more of it, its exchange value declines. The methodology behind ‘quantitative easing’ – that people ‘horde’ money due to ‘animal spirits’ or something similar, thereby creating a ‘deficiency’ in aggregate demand, is false. Think about it: if people ‘horde’ money in a time of crisis, the price of all other commodities will continue to fall relative to money, therefore ‘deficiencies’ in aggregate demand won't occur. Allowing prices and wages to adjust is all that is necessary for recovery.

As stated, if you have an over-supply of all commodities it will mean a temporary fall in their value relative to money. As John Stuart Mill said in 1830, to suppose that the markets for all commodities could, in any other sense than this, be over-supplied, involves the absurdity that commodities may fall in value relative to themselves.

…and that right there is the Keynesian (and unfortunately, government/academic) position. It was the argument the Mercantilists used and was disproved many times over – Keynes simply restated the same fallacy.

Quantitative easing is nothing more than wealth redistribution that will create further distortions in the capital structure of the economy that will need to be addressed in the future. We can’t get rich (in the aggregate – some individuals obviously benefit immensely!) by printing. You can’t increase wealth by dividing it!