Why Mervyn King is the printer's friend

As it turned out, I didn't need a Thesauraus to decode what Bank of England Governor Mervyn King was saying to business leaders in Nottingham last night.
It was there in the nearest an economist gets to plain English: the bank may need to use "unconventional measures" to put more money into the economy.
"They would take the form of purchases by the Bank of England of a range of financial assets in order to expand the amount of reserves held by commercial banks and to increase the availability of credit to companies."
Put simply, the Bank is thinking about printing more money to give to banks to give to businesses.
If it happens – "and I stress that we're not there yet" said Mr King – it would be a momentous decision.
While it won't solve our credit crunch overnight, it will have a decisive impact over time.
Businesses weren't sure what to make of it. They'd sat through a speech that laid bare the historic scale of the financial shock we've been hit by, said we were in the midst of a major adjustment in the very nature of our economy, and offered as succour the not terribly reassuring phrase "time is a great healer". Gulp...
Some were also concerned about the implications of printing more money. Handing over a load of dosh to an impoverished economy is all well and good, but when you increase the supply of anything it automatically becomes worth less.
Increase the supply of money and the risk is it will buy less – pushing up inflation because its costs us more to buy imported goods and raw materials.
With inflation currently plummeting, David Greenaway, the learned economist who now leads the University of Nottingham, took a sanguine view of such a drastic measure: "If you are going to do it, this is probably a good time to do it."
There are all sorts of other technical measures the Bank will take very shortly to help banks get complex credit markets moving again. I'm not going to bore you with the detail, but these measures – described in Rumsfeldian tones as "unconventionally unconventional" – boil down to buying bonds issued by big businesses to raise money.
Mr King also delivered what must be the most devastating put-down for our poor old banks. On Monday, Alistair Darling announced a raft of measures designed to boost lending that got pigeon-holed as another rescue for the banks.
Rubbish, said Mr King.
"The package of measures announced yesterday by the Chancellor are not designed to protect the banks as such.
"They are designed to protect the economy from the banks."
In a telling - and unscripted - addition to his speech, he said: "I fully understand the sense of injustice that many businesses up and down the country must feel about being held hostage by the banks.
"I share it."