Quantitative Easing- There are other less risk options

Quantitative Easing (QE) the creation of more money in the money supply appears to be on the way. LA believes there are other less dangerous options to use first. QE is and should be seen as a very risky last resort.
Many politicians, bankers and business people are pedaling the idea at present.

LA will, like a stuck record, come back to an alternative, it creates cash but from real assets not from the printing presses.

Most of the big companies in the companies in the UK pay their suppliers on somwhere between 40 and 60 days, in some cases more, this is real money not available to the majority of the businesses. This is £billions.

If the top 100 companies in this country were told they over the next 60 days they had to sort out all of their credit payments to on UK invoices to be settled on 30 days, and from then on all payments would be 30 days. £billions would be pushed into the system.

All 100 would have to meet their financiers and work out how to do this, where there are difficulties, government could step in to guarantee some of this amount.

This is not new made up money. This is money that by rights should have gone down the supply chain already, this is money due and owed.

Instead of guaranteeing hundreds of thousands of little loans, government will be looking at less than 100.

When this money hits suppliers it will for many of them be the first time ever they have had no overdraft, for others they will be well within their limit. This will lead to confidence and hence investment. This will kick start the economy.

Unlike plans to grow the small loans guarantee scheme, business will not have to go cap in hand to the banks, it will be able to make its own decisions.

This method is less risky than quantitative easing which, if overcooked, will lead to hyper-inflation, if undercooked, will be pointless. It is less bureaucratic and faster to deliver than small loan guarantees.

If it works it should be rolled out to the top 250 companies and then the to 500. That would be its maximum due to the cost of administering the scheme. If it fails, the taxpayer cost will have been minimal, the risk to the economy is all but nil.

LA begs that this is considered.