Heard of monetary policy and fiscal policy. But what’s this? Central Bank prints the funds that the government needs for its spending plans. Think 1920’s Germany (cartoons of wheelbarrows full of paper money). Not to be employed – yet.
Where do we stand due to C19? Bank Rate 0.1 percent. Extra £200 billion of quantitative easing (total now £645 billion being 40% of total gilt market) with prospect of Bank buying gilts directly from the government (banned before). Plus, cheap funding package for commercial banks. Best not talk about corporate bond market or gold or oil. Helicopter ready for take-off.
jgs 20-3-20
