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View the video online at http://citywire.co.uk/money/video/a520421

Witan: why printing even more money can save the world

The US Federal Reserve is likely to embark on more 'quantitative easing' to bolster the global economy, according to Andrew Bell, chief executive of the Witan investment trust.

Witan: why printing even more money can save the world

The US Federal Reserve and other central banks are likely to take more measures such as massive bond purchases to bolster the global recovery, according to Andrew Bell, chief executive of Witan investment trust .

Speaking in a video interview with Citywire, Bell says steps such as a third instalment of quantitative easing – essentially printing money to boost asset prices – by the Fed and other ‘enabling mechanisms’ would be aimed at ensuring liquidity already injected into the US economy had a greater effect.

His comments come as global stock markets climbed on Wednesday, amid hopes that Fed policymakers would take this course of action at their next meeting in September.

Bell explains how officials could prevent more monetary stimulus from stoking speculation in commodities markets, and why it was probably more necessary now than a year ago.

The chief executive also says jointly guaranteed ‘eurobonds’ could be a solution to the eurozone’s debt crisis, although it would probably be some time before European leaders agreed on issuing them.

In addition, he says an Arctic exploration deal between US oil giant ExxonMobil and Russia’s Rosneft is a reminder of BP’s (BP.L) failure to secure a similar such agreement, but will not intensify calls for a breakup of the UK group.

In the past three years, the £1.1 billion investment trust’s net asset value (NAV) has grown 13%, while its share price has risen 12%. The shares trade at a 12.2% discount to the trust’s NAV, slightly higher than its average discount of 11.8%.

15 comments so far. Why not have your say?

Michael Locke

Aug 31, 2011 at 17:43

For an intelligent man he does talk nonsense, QE is printing money and a distaster.

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Angry pensioner

Aug 31, 2011 at 18:02

Well ask yourself this, you have got a £50 note in your wallet, you lucky bugger !

If you want another £50 you need to work or sell something that earns you that magic £50.

Some clown is printing £50 notes and they are entering the money market and distribution process. Banks have millions of them, in fact they have got to find some way of lending them to us, well secured against risk, dont forget. So they compete against each other with more easy repayment deals to encourage the public to borrow, does this sound familiar ?

Net result is devaluation of your £50, inflation runs on and the money you thought you had is worth even less.

Oh yes this is going to work ! A bit like like our own dear old Gordon Brown , lets borrow more till the economy recovers.

wot a load of rubbish ! lets print money so everybody has got some, anyone want to buy a super size wheel barrow so you can carry enough money with you to buy a paper ?

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George Irvin

Aug 31, 2011 at 18:02

@michael: just why is printing money a disaster? Sounds like you are wedded to the Quantity Theory of Money. But high inflation is very unlikely to follow since there is no evidence that monetisation is leading to a wage push. Indeed, in the absence of monetisation one would get falling prices (inter alia, deflation raise the real value of nominal debt). By contrast, if your argument is that monetisation will merely lead to more speculation (incl commodities), the I agree---but money could be used for infrastructure investment which the US badly need and which, crucially, would create jobs.

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Michael Locke

Aug 31, 2011 at 18:13

Suggest Mr Bell reads " When money dies" which has just been reprinted. If you print money you devalue it and eventually cause inflation. The Fed does not count Food and Energy in core inflation that is why inflation is low in the US. This is dangerous nonsense.

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snoekie

Aug 31, 2011 at 18:32

Michael I agree.

If they print, then let them reduce the high paid functionaries and politicians pay by an equal amount pro rata, and that should include their pensions.

Clearly no common sense or understanding of economics or budgetary provision which should always have a plus figure at the end, even if it is only 1p!

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William Phillips

Aug 31, 2011 at 18:46

"high inflation is very unlikely to follow"

We already have the highest inflation for 20 years. Five per cent pa soon destroys the worth of savings, which is what the credit junkies of government want to do so that independent and thrifty people can be brought to heel.

Pensioners can starve so that home buyers and other sacred cows can be cosseted.

QE3, aka Dishonest Money, would be one more fix for the junkies, and sooner or later the system will collapse under the pressure of toxic overstimulation. Basically the USA is bust already, yet the dollar is still treated as the world's reserve currency. The gold price, the one thing they can't fake, is flashing the warning. The next 'dip' could be the equivalent of a heart attack for the western usury racket.

Deflation on the other hand would reward the provident. Can't have that, can we? After all, there are only six or seven savers for every borrower. What do we count for?

Let's maintain interest rates at their lowest for 300 years and keep the banksters happy-- paying themselves bonuses and charging APRs of 14% on credit cards.

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Hotrod

Aug 31, 2011 at 19:11

America and UK have played their QE cards. Europe has merely shuffled its hand but still can't make its mind up which card to play. The key player in all of this is China. It cannot expect its export led prosperity to continue if it bankrupts all of the western ecomomies it does business with. The simple answer would be to release the Dollar peg and let the Renmimbi revalue. A hard choice to make, but in the end its the most responsible one.

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Michael Peters Fenwicks

Aug 31, 2011 at 20:25

Print more is a disaster and a Ponzi Scheme harvesting more future problems - simple as that!!!!

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John Osborne

Aug 31, 2011 at 20:32

Very average fund, Andrew Bell should spend his time explaining his plans for improving its pedestrian performance rather than giving us his pointless views about the economy. One has to ask if a Trust like this needs a chief executive anyway, most just do with a good manager.

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snoekie

Aug 31, 2011 at 20:59

Hotrod, in bridge terms we should be calling the director because they are taking too long (as are the US) to impose a penalty.

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Anonymous 1 needed this 'off the record'

Aug 31, 2011 at 21:01

as my gran use to say - "you can play with the cat till it scratches"

Wise woman my gran and died totally solvent and much to pass on to her future generation.

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Mark Flinn

Aug 31, 2011 at 23:45

Michael Locke is correct. Read "When money dies" .

Do we know more today than our forebears? Were all the people in Germany and Austria fools? Of course not. But it can be so easy to be taken in when life gets a tad difficult.

Economists and politcians give us their opinion, but only history tells us the truth.

And unless we take heed, it will repeat itself. with a vengeance.

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alan franklin

Sep 02, 2011 at 18:10

Avoid Witan Trust, then, if that is the quality of their advice.

I think enough money should be printed so that we could all become multi millionaires.

Then we could all spend it and be happy ever after. Just like in Germany in the 1930s.

This man is so wrong headed I am surprised he is not running a country somewhere. Or perhaps he's already advised Zimbabwe.

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Lets Face It

Sep 04, 2011 at 10:49

Hey, come on guys, I have a 'wants' list

1. A money printing machine for my home.

2. Digitise myself so I can live in my digital mansion

3. I want a McDonalds drive thru on my drive

4. A time machine that goes backwards and forwards

5. I want to live forever in great health

6. A moustache for my cat.

Surely its not asking too much?

Printing money is the best idea since the mini skirt

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Alan Tonks

Sep 04, 2011 at 13:41

Mmmm Witan, I would say rather witless would be nearer the mark.

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