"Insolvent central banks are lending money to insolvent banks who buy government debt from insolvent governments who lend money to the IMF which then lends it to insolvent governments to pay back insolvent banks."A beautiful summation given by 'Escritor' today as the British Telegraph reports on the Bank of England (BOE) boosting the supply of pounds by 50 billion in its latest round of quantitative easing (QE). The BOE "owns 40% of [British] Government debt". One irony is that QE is expected to impact on pension and annuity rates by lowering them, and this in turn could cancel out at least part (if not all) of the stimulus effect on the British economy.
Hundreds of billions of pounds are printed that appear to be staying completely within the financial sector of the economy rather than being translated into forms of real wealth and production.
5 comments:
yeah, except that central banks can never become insolvent. by definition
Good point JCE. The solution to everyone else's debt problem is to democratise the money creation ability. Spread it around. Some of the multitude of new currencies could even be backed with real wealth.
JCE:
Since central banks cannot become insolvent, does that mean the U.S.A. can never be insolvent?
Wowwee!
You have turned my life around!
I used to be miserable and depressed.
Now I am depressed and miserable.
Don Levit
Thankyou Don Levit. I had a good laugh.
Brenda:
That brings a smile to my face.
Don Levit
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