QE3 is a whole new beast

America's first two rounds of money printing were all about fixing the broken financial system. But this time it's different, says Merryn Somerset Webb.

Years ago, back when all this first started, Bill Bonner and I talked about how it would play out. He said central banks would print money. Then they'd print more money. Then they'd get addicted to printing money. And then there would be inflation. You can make the crisis and its ongoing semi-resolution sound a whole lot more complicated than that if you like, but in the end that's more or less what is happening.

America, as ever, is rather ahead of the rest of us. Its first two rounds of QE made some sense. The money supply was on the verge of serious contraction as the banks pulled back from lending. So to prevent deflation and depression the Federal Reserve stepped into the breach and printed just enough money to stop the overall supply of money falling. QE1 and QE2 were all about trying to mend the broken financial system.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.