Friday, 7 August 2009

Key Fact to Remember August 2009


Bank of England Quantitative Easing Programme Spend = £175 billion

UK Government debt estimated outrun for 2009/10 = £175 billion.

And lo, as predicted many a time here, it has come to pass. Our government overspend is being covered by printed money; Socialists think this is a good idea.

Feel free to call out anyone who dares to suggest there is no linkage in the above. The QE is keeping our Treasury Bond rates down to prevent State bankruptcy.

There is a very messy end to this story by 2011.

12 comments:

Steven_L said...

One thing I want to know is - does the Treasury pay the coupons on the gilts the BofE buys through it's reverse auctions?

Anyone know the answer?

Barking Spider said...

Dumped deliberately on the Tories by that spiteful moron, Brown!

CityUnslicker said...

Yes SL, they do, shuffling paper around the Government is one reason QE has not been all that effective.

Anonymous said...

It's £175B and counting......

CityUnslicker said...

Anon - it iwll match the government overspend, so you are right. I wonder how many people realise we have 10x the QE of the USA>

measured said...

Couldn't agree more. But, hey, inflation will make the public debt seem less. There appears to be no regard being made to the finances of UK citizens, especially those that pay tax. Not even a heartfelt apology.

It won't be easy to reverse the trend in 2011/12. Perhaps it will be dressed up by joining the euro. C@W, what a sorry State we find ourselves in! Least I am not the Governor.

roym said...

theres a worrying number of people going along with this though. why isnt king resigning? or any of the others for that matter?

in fact why isnt anyone in a position to do so saying anything out loud?

Unsworth said...

Only the story won't end in 2011.


I'd give it a couple more decades.

Blue Eyes said...

QE and a decent inflation seems to me to be one of the least worst options for sorting out the financial mess. I don't condone the effect it will have on people who hold their savings in cash, but surely it is preferable to a protracted zero growth era?

That said, I would prefer that the new money was spent by the private sector not the incompetent state.

CityUnslicker said...

QE did not cause inflation in Japan. If m4 growth remains below 0 there is no inflation.

I think that inflation is the aim, it just may not be achieved.

What IS achieved already is a screwing of our structural deficiet for maybe a decadge.

Blue Eyes said...

Surely printing the deficit means that there is nobody there who has to be repaid?

James Higham said...

Issue debt-free notes and abolish the BofE, raise reserve requirements.