Why does quantative easing/printing money necessarily lead to inflation/hyperinflation?
If you double the amount of printed money, other countries will know this and the value of the pound will fall by 50%.
Then you will pay £2.00 for your chinese toothbrush, instead of yesterdays price of £1.00
The pound has already been devalued by around 35%, look at its value now against the Euro, compared to 1 year ago.
If the gobmint has the ability to print money as and when it sees fit, why are we taxed?
As above your £10.00 note is only worth what someone will give you for it.
Paper money only has "value" when it represents its countries worth.
Why is there inflation anyway?
Someone somewhere will raise their price to make more money, thus inflation. You could call it greed.
Why is " a bit of" inflation A Good Thing and deflation bad?
Inflation tends to occur when economies are doing well, you can raise prices and people will still pay the increase, as they are also doing well.
Deflation occurs during a recession/depression, you need to lower prices in order to sell to people who are less well off.
This can cause a vicious circle, People do not buy... firms shed jobs as they are not selling...more people out of work... even less money being spent...more jobs go, less money being spent etc.etc.
What does the stock market bring to the table in terms of economic benefit, seeing as it does not produce anything, but merely moves money around?
In theory, it represents the value of this country.
If we are doing well, money is invested in the stock market, and it rises.
If we are doing poorly shares are sold, especially by foreign investors, and it falls.
The only way to make "real" money, is to attract foreign investment, and export more than we import.
