Originally posted on uneconomical:
By “Spain”, I mean Spanish government bonds.
Will the ECB will stand by and let Spain go under? Spain is a nice country with a fairly large economy. It’d be a… shame, right? So if the ECB won’t do anything, I think the UK should act instead.
David Cameron should immediately instruct the Bank of England to print Sterling, exchange it for Euros, and start buying up Spanish government debt. Spain apparently has about €570bn of debt outstanding, so the Bank could buy, say, all of it.
We all know that the Bank of England balance sheet has no possible effect on the UK economy except when it is used to back changes in Bank Rate. Right? So these actions by the Bank can make no difference to, say, the Sterling/Euro exchange rate, and hence no impact on the demand for domestically produced goods and services in the UK. …
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