In message , Jonathan Bryce writes
They may be able to do something wit it, but they haven?t. The whole credit market has contracted dramatically.
I'm not sure that M4 has increased. The latest BoE figures are only up to end of September and they show no perceptible increase in the rate of increase in M4, but lets see what October's figures say.
Cut your losses. Buy a chunk of gold.
Is your mattress still where you left it?
With limited liability, no ?
They haven't given LOLR facilities to anyone for so long that they may have forgotten to add it into M4!
It's not a perfect accurate number anyway - relies on all the banks reporting everything to the BoE.
In message , Tom Robinson writes
I agree but the errors are pretty constant and so the absolute value isnt important, its the change that mattes.
Doesn't necessarily mean you're going to see the NRK LOLR loan show up in the figures though. Even if you thought you saw it, it could easily be something else. Either way the money has still been added to the monetary base, whatever the BoE tells you!
In message , Tom Robinson writes
I challenge your use of the word 'added', I would suggest 'included' is more appropriate.
I was originally challenging the previous assertion that the NR loan 'increased' M4. I am quite comfortable with the bail out being included in the figures, but I dont think it has increased M4 at all.
It may be worth at this point looking at the definition of M4:
M4 = M0 (notes and coins) + UK residents' bank deposits + deposits made by the private sector
Consider what the BoE did in making the loan to NRK. They created money out of thin air and paid it to NRK. NRK then used this money to repay their ABCP borrowings, which ended up ultimately in private sector deposits. So this new money has been added to M4 and hence M4 has increased.
Which pretty much explains the credit bubble. The credit bust is much the same thing in reverse.
Someone described the 1930's Depression as "trying to shoehorn 30 million Dollars of credit into 5 million Dollars of cash". This time it's closer to 50 trillion Dollars of credit into 5 trillion of cash.
Lots of folks are going to lose a lot of money. What's still to be decided is who it will be.
FoFP
AAAARRGGHHH!
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