by Summary:
No one is "lending" to the BOE. The BOE doesn't need to get funds to spend. As the currency issuing agent for the British state, it creates the currency in the act of spending, which is merely crediting accounts on its spreadsheet. It is done simply by keystrokes, no "money printing" needed.Spending and securities issuance are monetary operations. The funds used to spend are created by the central bank as "new money" and securities are issued as a reserve drain after spending. Elementary, my dear chap. The fiscal aspect of the operation is the payment of interest on the securities issued, which increases the fiscal balance and adds to the stock of nongovernment net financial assets in aggregate, along with the amount spent and not taxed (the fiscal deficit). Curiously, the stock of
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No one is "lending" to the BOE. The BOE doesn't need to get funds to spend. As the currency issuing agent for the British state, it creates the currency in the act of spending, which is merely crediting accounts on its spreadsheet. It is done simply by keystrokes, no "money printing" needed.No one is "lending" to the BOE. The BOE doesn't need to get funds to spend. As the currency issuing agent for the British state, it creates the currency in the act of spending, which is merely crediting accounts on its spreadsheet. It is done simply by keystrokes, no "money printing" needed.Spending and securities issuance are monetary operations. The funds used to spend are created by the central bank as "new money" and securities are issued as a reserve drain after spending. Elementary, my dear chap. The fiscal aspect of the operation is the payment of interest on the securities issued, which increases the fiscal balance and adds to the stock of nongovernment net financial assets in aggregate, along with the amount spent and not taxed (the fiscal deficit). Curiously, the stock of
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Mike Norman considers the following as important:
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Spending and securities issuance are monetary operations. The funds used to spend are created by the central bank as "new money" and securities are issued as a reserve drain after spending. Elementary, my dear chap.
The fiscal aspect of the operation is the payment of interest on the securities issued, which increases the fiscal balance and adds to the stock of nongovernment net financial assets in aggregate, along with the amount spent and not taxed (the fiscal deficit). Curiously, the stock of nongovernment net financial assets in aggregate is called the "public debt," whereas it is actually wealth of nongovernment in terms of risk-free government securities and interest payments. Such a deal — and people are complaining?
econoblog 101
Who is lending to the British government?
Dirk Ehnts | Lecturer at Bard College Berlin, research assistant at the Technical University of Chemnitz, and spokesperson of the board of Pufendorf-Gesellschaft eV in Berlin