The Bank of England has started to purchase assets worth up to £100bn (comprised mostly of government gilts); to be followed by a probable later purchase of private sector assets of £50bn (corporate bonds and commercial paper).
This amount represents almost exactly £2,500 thieved from every single person in the UK. On 3 March the chancellor instructed this Asset Purchase Facility to be funded by money that obviously did not previously exist.
As Mervyn King had asked from Alastair Darling in February, the government has resorted to “unconventional unconventional measures” as opposed to the common-or-garden variety of “conventional unconventional measures”. This just goes to show the ‘experts’ have no plan, and how terrifyingly badly Gordon, Alastair and Mervyn have screwed it all up. I don’t think I would be so scared if Nick Leeson, Bernie Madoff and Sir Allen Stanford were running the economy.
For some strange reason, otherwise sane people are suggesting what we need now is a colossal expansion of the monetary base. The truth is that the economy needs an exploded M0 like I need an exploded aorta.
I know the Old Lady who has counterfeited some money; She counterfeited some money to stimulate demand; “Demand had fallen because the banks didn’t lend”; The banks “didn’t lend” because the property boom bust; The property boom bust because it was unsustainable; It was unsustainable because it was driven by cheap credit and artificially low interest rates; Which is where we are again now but even worse than before; I don’t know why the Old Lady keeps doing the same thing; Perhaps she has dementia; I hope she dies
It is long past time to abolish the Bank of England: This Old Lady needs euthanising quickly before she croaks leaving a will bequeathing nothing but hyper-stagflation.