Why is it, when I read the news that the Government is considering the hilarious and opaquely named "quantitative easing" (i.e. printing more money) I instinctively look to the sky and scream "are they truly bloody insane"? Don't get me wrong, I understand why they are considering it, it's because instead of fearing inflation they've switched direction and are crapping their pants about the possibility of deflation instead.
Printing more money would of course devalue the pound (can it go any lower?) and in effect, by politicians making the decision the independence of the Bank of England is brought into question and the pound heads towards being some sort of fiat currency. I presume that the idea is to do it in a manner whereby inflation is kick started and the possibility of deflation is, in theory at least, reversed.
There is however a wider political implication of this, which is that the pound always seems to be trashed to pieces when Labour get their hands on the wheels of power. That is to say that the pound devalues rapidly and then a Labour Chancellor is forced to take action that results in greater devaluation.
I am left wondering though how long it will be, should they really start printing money, that either Darling or Brown find themselves defending the decision and come up with their own version of Wilson's infamous gambit that "it does not mean that the pound here in Britain, in your pocket or purse or in your bank, has been devalued."