Quote Originally Posted by Muddy Retriever View Post
But Mike, I'm confused. You said this yesterday:

"No need to borrow, just print it - this is how we buy houses - the money is created by the bank/building society - it does not come from the savings of the bank's customers - as long as inflation does not "ramp up' - I hate that expression - it is not an issue."

So if the bank has just created this money out of thin air to lend in the first place, why is it a big problem if they don't get paid back? Why do we ever need to bail the banks out, they can just create more money, right?
The money printing trick only works with strict controls/conditions. If you don't have to pay the bank back it does not matter what you paid for the house - property prices would be infinite in no time.
After a war there is usually a very limited supply of goods and workers - if you print money prices shoot up - big mistake. If interest rates are low and a country needs basic infrastructure, printing money can improve the economy generally without significant inflation. We have wasted 10 years.