The United Kingdom has began a second round of money printing as northern Europe enters a second round of locked down.
The Bank of England has announced they are to continue printing £20 billion for corporate debt and an extra £150 billion for government debt.
“The Committee voted unanimously for the Bank of England to continue with the existing programme of £100 billion of UK government bond purchases, financed by the issuance of central bank reserves, and also for the Bank of England to increase the target stock of purchased UK government bonds by an additional £150 billion, financed by the issuance of central bank reserves, to take the total stock of government bond purchases to £875 billion,” they say.
That’s close to 50% of GDP with government debt levels already surpassing 100% of GDP in the biggest money printing certainly in living memory.
This is debt owed to the central bank which finances it through their reserves, that being financed by their power to declare whatever number they enter into their computer systems is actual money.
This debt has to be paid back with interest to the central bank which is owed by the British government and by the British commercial banks.
This debt reaches the government through the commercial banks, rather than directly by the central bank.
The British government has to go to commercial banks which then say yes or no to the British government wanting to borrow whatever amount.
The commercial banks then sell it onto the market where you and anyone else can buy these bonds. Alongside you, the central bank is buying these bonds too and so far to the tune of $1 trillion.
Any profits you make from these bonds you bought from the government are taxed at variable rates depending on your income. That’s unless you’re rich enough to know the loopholes like the commercial banks.
This tax you pay is used more and more to pay back this debt, instead of to pave...