When is Debt not Debt?

 Rachel is busy looking to change the fiscal rules.  Currently the Bank of England's vast debt pile is part of the government's problem but Rachel is busy exploring divorcing from the Old Lady of Threadneedle Str so she isn't carrying the debt pile on her books.

Who does the Bank of England lent to?  Either banks or the government. So the Government has borrowed TRILLIONS  from the BoE but isnt going to show this vast debt pool on it's books. 

Let's start with the Banks.

The Bank of England has lend vast sums to the banks following the financial crash of 2008.  What year is it now?  2024?  Hell!! -  that's nearly 20 years ago.

Following the financial crash, the banks were required to retain a certain amount of money for liquidity. Where did they get this money?  The Bank of England.

The banks weren't happy that they had to hold billions of cash on deposit so the Bank of England (ie tax payers) agreed to pay the Banks interest on the money held on deposit.

Fine when interest rates were basically zero - not so fine when the interest rate is 5%.

So tax payers are paying interest to high street banks for money they have borrowed from the bank of england.

The European Central bank back in 2023 decided not to pay interest to the banks but the UK continued to pay interest.

The numbers havent changed much since 2023. Tax payers are paying £16Bn in interest to the banks each year. Using Rachel's Unit of Measure - that's 75% of a BLACKHOLE according to Rachel. [In slang, a Monkey is £500 so maybe £22Bn should be a Rachel?]

The other problem is that the Bank of England has created a private limited company with Companies House to  squirrel  all these debts away.  That company  is losing money.  Roughly £100Billion per year.  Hang on - that's 5x Rachels !!!

Lord Mervyn King, former governer of the Bank of England, has decided to comment about her  potential tinkering to hide the debt.

If Rachel ignores this does that mean that taxpayers no longer have to fund these Rachel sized Blackholes?  If yes then fine.  If no then Rachel really can't just ignore them .....In the real world that would be fraudulent accounting.  

All companies need to comply with Accounting Standards eg IFRS.  Isn't it about time Governments had to follow the same rules? For example declaring liabilities for things like State Pensions which people have paid into (ie bought),  provisions for generous final salary public sector pensions (rather than funding these out of the current account), various other Ponzi schemes that governments run,  the list goes on....

Welcome to the Two Tier world of government. Rules are for the little people - not for us.



Comments

Post a Comment

Popular posts from this blog

Trust - country first, party second - Labour's lies and dishonesty

 I would say trust is probably the number one thing in a successful marriage/relationship. This year we ended up in a new relationship with the Labour government - OK it felt like an arranged marriage but nevertheless it was a fixed term union of the people and Labour. Killjoy Starmer started off on the 5th July 2024 saying positive things about this marriage.  Here's some extract from  Killjoy's wedding vows:      "Country first, party second"      "When the gap between the sacrifices made by people and the service they receive from politicians grows this big, it leads to a weariness in the heart of a nation, a draining away of the hope, the spirit, the belief in a better future" [this was aimed at the outgoing Conservatives - not the weariness that Killjoy is inflicting upon us.]           "Now this wound, this lack of trust, can only be healed by actions, not words."      "I know that, but we ca...
Read more

Landlord EPC's part 2

Following on from the previous blog about the stupidity of  Labours EPC #C plans , I thought I would do a little more digging into EPCs. To start with I thought about doing an EPC assessor course. Prices are about £1,000+VAT for an on-line (not taught) course.  Pretty steep. I also looked into whether there's an on-line points calculator - the problem is you have to take the EPC report  as gospel and can't challenge it. If you do a quick search on-line you find horror stories where a property was C.  Then the EPC expired requiring a new EPC and the new assessor scored the property "D" - WORSE !!! The problem is EPC scoring is not transparent - you are in the hands of someone that did an on-line course for 3 days.  Has not got a degree in building science and will guess or assume the worst. The EPC assessors must think we are stupid and won't ask questions.... So in short who knows what the real EPCs of my buildings are. You can't discuss things with an EPC ass...
Read more

Les miserables - Labour's misery

 If I cast my mind back to 1997, Tony Blair entered government to  fanfare of positivity.  His adopted anthem of D:Ream Things Can Only Get Better echoing through the corridors of power. Tony was always positive, smiling.  I can't say I remember him fondly.  I'm still spitting feathers over Tony's then Chancellor Gordon Brown stealing £60k from my pension claiming I was the subject to pensions windfall tax for holding BT shares - annoying as BT was our biggest customer hence the company pension fund bought into BT.  Still at least Tony was smiling when he stole it from me.  Not once did he call me greedy. Anyway - the general population was upbeat despite Robin Hood Blair stealing from the not so rich and giving it to his Labour buddies (cronies nowadays). We genuinely believed things could get better. Then Miserable Brown came to power from Grinning Blair. He was always miserable.  Then things got worse as he trashed the economy.  We all bec...
Read more