Cyprus-Forum.com

[Giorgallas]

Hi,
I am doing a research about the economic problems in Cyprus and how it affects you as an idividual or a parent, a student e.t.c.

[Sotos]

Yes. The value of my assets is now reduced.

[CBBB]

You never had any assets in the first place!

[supporttheunderdog]

yes- no pay rise in several years while living costs go up!

[GreekIslandGirl]

On the probability that someone here might know, since this is an "Economy" related topic...

Basically, I can't get my head round how a bank can just decide to print money to put into the system (Quantitative Easing?). For example, the Bank of England has recently printed another £75 Billion. This makes some £300 Billion in just over two years.

Today, George Osborne announced they are giving the IMF some £10 Billion - becasue it will generate interest for Britain. [Presumably from screwing Greece for 'money' they are NOT really giving them for debts they never really had!]

So if the 'Bank of England' can just print more money, to use for gambling - can the Bank of Cyprus also print more Euros?

[B25]

On the probability that someone here might know, since this is an "Economy" related topic...

Basically, I can't get my head round how a bank can just decide to print money to put into the system (Quantitative Easing?). For example, the Bank of England has recently printed another £75 Billion. This makes some £300 Billion in just over two years.

Today, George Osborne announced they are giving the IMF some £10 Billion - becasue it will generate interest for Britain. [Presumably from screwing Greece for 'money' they are NOT really giving them for debts they never really had!]

So if the 'Bank of England' can just print more money, to use for gambling - can the Bank of Cyprus also print more Euros?

My understanding is that money is backed by gold. I suspect that to print more money means that the BoE must have placed more gold in some reserve to cover it.

If it were a case of just printing, no country would have any money problems, would they??

[Sotos]

Money is not backed by gold anymore... that was long long time ago. Here are some videos for some basic education: http://www.khanacademy.org/#banking-and-money Basically if you print more money you devaluate your currency and create inflation... but that is not always a bad thing because it can help increase your exports. In the case of Euro no country can print money on its own because it is a common currency. I think printing euro can only be done by the European Central Bank.

[GreekIslandGirl]

What you say sounds correct in this context. Britain has no Gold reserves, as far as I recall, because there was a general outcry (or whingey moan ) when Gordon Brown sold off all the Gold reserves, some years ago.

And also yes; Inflation has been driven up in the UK.

Who decides when the European central Bank can print more Euros? Could Cyprus decide that during its Presidency?

(Not that I advocate it; as certainly, Cyprus's economy is much healthier than Great Britain's.)

[newgeneration]

The European Central Bank has just printed another 500 billion Euros which has been distributed among banks in Europe. It's called the LTRO or long term repo operation.

This money has been lent by the ECB at 1% for 3 years. This situation has come about because not a lot of banks are lending to each other so the ECB has taken the position of 'central bank'. The end aim of cheap lending by the ECB is to make the banks more stable, have more liquidity and eventually trickle down to small and medium size companies and consumers, to help economies to kick start themselves out of recession.

The problem is, the banks are choosing not to take a risk on consumer lending and instead wash money through each other to make more. Rather than lending to consumers banks are buying sovereign and financial bonds at 4, 5, 6% and basically profiteering to shore up their balance sheets.

[newgeneration]

No GIG, you cannot order more money to be printed during your term of rotating presidency. It's a figurehead role. While you may be able to try and suggest items for the agenda, you will not have a decison making role as presidents. It is not like being the president of, say France, for example.