D’ye recall a bit back when Smurf³ was insisting that the accounting for index linked gilts was wrong. No mark to market?
Third, if Record knew anything about accounting he’d know that someone must have made a profit from this fall in value, because after all debits are always matched by credits. And who made that profit? HM Treasury did. In accounting, if the value of your debt falls you record a profit. It’s that straightforward. HM Treasury has gained exactly the amount supposedly lost by the APF. The net impact for accounting is precisely zero right now.
Quite so. But wat this means is that Treasury needs to recapitalise the Bank of England to make up for this. And that’s where the real accounting starts. Sure. BoE was making great profits on the interest rate spread for more than a decade. Which is sent to Treaury. Which then spent it – it’s not on the balance sheet any more. Now the situation is reversed. Treaury must send the money to BoE. Ooops, it hasn’t got it, it’s spent it.
Wonder what spin he’ll use to try and get out of that one.
But Record either did not know this, or chose to ignore it, or he does not understand accounting, or macroeconomics, or how the Bank of England works, or how the APF works. So he wrote a pile of garbage. And the Telegraph printed it.
But that’s the way the right wing media works now.