No, of course it hasn’t. Government debt is effectively unchanged. What has increased is the central bank reserves in the economy. But they make good the shortfall in cash generation that would have otherwise occurred in the private sector. The Office for National Statistics is, yet again, issuing wholly bogus statistics. We might as well begin to call it the Office for Public Misinformation so frequently is it doing this now.
That’s interesting. I thought – ‘cuz Snippa tells me so – cash was government debt. Therefore an increase in cash is an increase in government debt.
Still, this is the fascinating part:
And the QE will not be unwound – because markets will never be able to or want to absorb £735 billion of extra gilts. And if they did, then new gilts should anyway be issued to fund a Green New Deal.
So, we’ve just increased the base or narrow money supply by however many hundreds of billions. We’re only ever going to use tax to reclaim that money from the economy. So, what do tax rates have to be to reduce the money supply to prevent the inflation if – or when – the velocity of money returns to something more normal?