Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "Understanding QE" video.

  1. Absolutely. And selling these bonds into the financial market means that the Dealer Banks will be buying as much as they can at this discount, and will either sell or lend them out at a profit, or redeposit them in their reserve accounts at the Bank of England which ensures they meet their capital Reserve requirements quite cheaply, and get paid interest as well. It's another form of subsidy to banks that should be able to stand on their own feet. As Mark Blyth, the political Economist argues: "First, it (the Labour government) could massively increase its fiscal space by telling the country’s central bank, the Bank of England, to stop paying interest on the commercial bank reserves that it holds to influence short-term interest rates. With the United Kingdom’s high interest rates, banks prefer to hold on to money and not invest in the real economy. As a consequence, they are expected to make around $286 billion in interest by 2033 by simply parking reserves at the central bank.” That's nearly £218 billion a year to the banks in interest. And who benefits from that? Only the shareholders of the banks, because banks are not investing in the real economy, because that is more risky than selling debt and speculating. That's why Sunak was going after the UK pension funds to start taking more risk by investing in capital projects. So, ou pensions are going to be exposed to investments that banks aren't interested in. What could go wrong?
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