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Thanks to Facts4eu picking up the important story about unacceptably large bond losses, with the bill sent to the UK taxpayer.
November 28, 2024
Indeed and who is mainly to blame but the Con-Socialists but the dire Sunak and Javid/Boris who appointed him (despite his appalling record) and now the ever more appalling Starmer/Reeves.
November 28, 2024
Just regarding the note the other day about your subscription offer John, I would be very keen to subscribe if it goes ahead. Thanks
November 28, 2024
No wonder the Governor was so quick to blame Truss and Kwarteng when his Ponzi scheme looked set to collapse in 2022.
November 28, 2024
BoE is ‘retiring’ it’s share of Gilts, – Good, but Gilts in issue are still rising, being bought by the market.
https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/timeseries/bkpm/pusf
Money Supply M4 here, looks little changed:
https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/auyn/qna
The retired BoE Gilts, are being replaced by higher yielding new issued Gilts, so money is more expensive but available – for now, so long as the market believes UK government will keep paying its debts. Watch the Gilt yields.
November 28, 2024
It’s one big ponzi scheme
Sell bonds at a loss then issue more at a higher yield costing taxpayer more to service. Soon all our taxes will be needed to cover losses/interest charges.
November 28, 2024
From Sir JR
Facts4eu highlight huge Bank of England bond losses
Latest figures from the OBR dwarf the Chancellorās āĀ£22bn black holeā ā why is she so quiet?
The Bank of England is well on its way to losing the country close to a quarter of a trillion pounds, according to the latest official data from the Office of National Statistics and the Office for Budget Responsibility.
The results of this analysis show that the Bank is now predicted to make a thumping loss of c. Ā£240bn. This is getting on for a quarter of a TRILLION pounds.
As with all financial Tradeās when someone losses someone else gains by that same amount, it is not a vanishing resource when it just moves home. The real question is who is profiting? Or who is the Government giving my money to again?
November 29, 2024
Picking up on
@javelin
November 28, 2024
UK GDP is Ā£2.5 trillion and there are 33 million working.
This means average person produces Ā£75,000.
Average take home pay is Ā£27,000
Ā£48,000 per person goes on tax, profits and depreciation of assets.
– The results of this analysis show that the Bank is now predicted to make a thumping loss of c. Ā£240bn. This is getting on for a quarter of a TRILLION pounds. The Taxpayer Share of the loss? Those that run the BoE and the Treasury’s share? Or the Taxpayer individually is in for 10% directly added to their tax bill and they have no say, no recourse against gross incompetence – rephrasing that is the equivalent of a 10% reduction in tax over the same period. Whose ‘Blackhole’ who is in Charge, Rachael in Accounts?
November 29, 2024
“The real question is who is profiting”
The answer is complicated, because there have been various winners and losers at various times.
We are now coming up to 16 years since Alistair Darling agreed that the Bank should start buying up assets, notionally to increase liquidity in the financial system and so help avoid a 1930’s style economic depression.
His letter to Governor Mervyn King, headed “ASSET PURCHASE FACILITY” and dated January 29 2009, is here:
https://webarchive.nationalarchives.gov.uk/ukgwa/+/http://www.hm-treasury.gov.uk/d/ck_letter_boe290109.pdf
Insofar as it worked to avoid a depression the nation in general were all winners at that point, but the owners of the assets bought up by the Bank at elevated prices were particular winners. Note that originally these were to be “high quality private sector assets”. It was only later that the Bank started to buy up gilts. Note also that the Treasury indemnified the Bank against losses right from the start.
Later when it was agreed that the Bank should start buying up previously issued gilts we were all winners in the sense that with the Bank rigging the gilts market the government could continue to sell new gilts to finance its budget deficit and avoid bankruptcy. As it was the profligate Labour party which had taken us to the point where the government was having to borrow one pound in every four that it was spending clearly the Labour party was a particular winner from this scheme, and extraordinarily it was allowed that political benefit by George Osborne who never exposed what was going on to the public.
That must have contributed to the failure of the Tories to win an overall majority at the 2010 general election, and I would say that they were particular losers but in general we were all losers from having the LibDems as partt of the coalition government. However there must have been particular winners from the operation of the “money go round” whereby the government’s Debt Management Office was selling new gilts while the Bank’s Asser Purchase Facility was buying up previously issued gilts, often at similar rates.
Then when gilts prices started to rise the Tory government was a particular winner because it syphoned off the profits from the Bank selling back parts of its stock of gilts at higher prices than it had paid, and taxpayers in general were winners, but some gilts investors were particular losers. Now that has gone into reverse.