Where has the new money printed by the Bank of England gone?

Question

I mean all the billions of new money they've been printing lately?

Additional Details

I mean, the billions being pumped into the markets at the moment. Thanks for any unnecessarily patronising remarks in advance.

Answer 1

Best Answer - Chosen by Asker

They have used it to buy back Government 'IOU's' (Bonds) ... this has been keeping Bond prices high and allowing a lot of people who don't think much of the current UK spending deficit to off-load their Bonds at a 'good' price before the value collapses .....

Some of the (ex) Bond holders are 'foreign' institutions (US banks etc) who need the money to cover their defaulting borrowers & bad loans .. others (UK Banks) are using the money to pay off their own borrowings ...

Eventually, when the money has worked it's way through the system, the UK exchange rate (value of the £) will drop (it already is) to reflect the fact that UK money is now worth less ..

eg. say you have £100 in circulation .. this represents the entire 'worth' of UK & (say) £1 = $1 (or 1 euro) .. so UK is 'worth' $100 (or 100 euro)

If you print another £100, plainly UK has not suddenly become 'worth' any more .. i.e. it is STILL only 'worth' $100 (or 100 euro)

So plainly if there is £200 in circulation, £200 == $100 (100 euro) and each £1 must now be 'worth' only 50c ...

The average UK citizen will see this re-balancing as inflation (in my example, in order to re-balance the £, plainly 50% inflation will occur)


So, to answer your question, 'no where' == it's 'funny money' == it does not increase the 'worth' of the UK, all it does is steal out of the pockets of anyone who holds their wealth in ££'s ... (i.e it's just another Tax)

Asker's Rating:

Asker's Comment:

Thanks for that. Great to have a comprehensible answer.

Answer 2

well you clearly have no idea how it works.
Or any grasp of economics...

You cant just print countless amounts of money.
It really doesn't work like that.
The economy is a very delicate balance.
Think of it this way.
If we printed more money.
Prices would just go up.
Say everyone made £1000000 a year.
then milk would go up to like £100.

thats the easiest way I can put it.

Answer 3

THE BANKS ARE HOLDING ON TO IT,saving for a rainy day, as they say!

Answer 4

i ate it

Answer 5

Have checked my accounts Not there