So the next question is how much of that made its way to the general economy? No-one knows.
Uncovered: The magical money tree.
Andrew Walker

I do. None of it.

It’s the wrong sort of money. QE money can only be held by banks. Those estimates are based upon an incorrect understanding of how banks work.

What QE actually does is reduce the amount of interest people receive on their savings. (They can’t buy a Gilt and end up with a lower rate bank deposit instead).

The idea is that they will then chase up the price of other assets (houses, shares, etc) which will make other people holding those assets feel more wealthy. They will then rush down the bank and borrow more money against their collateral to spend on fripparies.

That’s the system we have. It serves those with assets and those who own banks nicely.

Or we can go with the truth — no sovereign government is financially constrained. We don’t need to worry about numbers. We need to worry about whether we have enough stuff.

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