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HM Treasury sets the price, not The Market — NeilW

Summary:
The Market is servant, not master because Sterling is a public monopoly and monopoly rules apply. Whether the government pays interest is entirely a policy choice. There is no reason at all for government to continue to issue Gilts or Treasury Bills, nor pay interest on them. Stopping interest payments will eliminate the interest income and forward pricing channels, causing inflation to decline faster. Moreover, it would make the implementation of a Central Bank Digital Currency that much easier. After all, there are no interest payments on physical cash. So why should there be any with digital cash?New WaylandHM Treasury sets the price, not The MarketNeilW

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The Market is servant, not master because Sterling is a public monopoly and monopoly rules apply. Whether the government pays interest is entirely a policy choice. There is no reason at all for government to continue to issue Gilts or Treasury Bills, nor pay interest on them. Stopping interest payments will eliminate the interest income and forward pricing channels, causing inflation to decline faster. Moreover, it would make the implementation of a Central Bank Digital Currency that much easier. After all, there are no interest payments on physical cash. So why should there be any with digital cash?
New Wayland
HM Treasury sets the price, not The Market
NeilW
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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