Comments by "" (@downshift4503) on "Every action has a reaction" video.

  1. To get it out of the current account, your bank spends the equal bank reserves with the BoE to get the cash, so it disappears completely from your commercial bank. It remains a liability of the government though and exists within the national debt total, an asset of the BoE. The BoE / treasury would simply over estimate how much cash was in the economy.
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  2. They just pay benefits to people, nothing to do with your tax.
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  3. QE is sat on the asset side of commercial banks, ie bank reserves. The banks gets paid 5% interest for taking no risks at all, paid by the BoE, who normally returns profits to the treasury. Covid support was spent by the government. Again this ends up on as bank reserves but also in deposit accounts. It gets passed about unless its paid back as tax or used to buy government bonds. Meanwhile those bank reserves earn 5% for the banks. All this vast amounts of risk free interest being poured into the banks is for some odd reason supposed to reduce inflation. Meanwhile there is supposed to be a black hole in government finances.
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