#quantitativetightening — Public Fediverse posts

Best and clearest explanation of Govt #Bonds that I have ever read, it’s from Prof Richard Murphy’s blog (at taxresearch.org,uk ).

” Governments do not borrow because they need money. The government spends first. In doing so, it creates deposits and reserves within the banking system. Taxation then removes some of that money from circulation in the economy. What is left, the deficit, is simply the money that the government has spent but has not yet taxed back.”
“{…} anyone buying a newly issued gilt or government bond does not provide the government with spending power that it previously lacked. Instead, the purchaser exchanges one government liability for another.”

#Economics101 #MMT #GovtBonds #BondMarkets #QuantitativeTightening and #QuantitativeEasing #ReserveBank #CahsRate #BondInterest

My understanding of the above:

A Bond is like the govt giving me an IOU against some of its own currency I exchange for it with a guaranteed repayment in 10 yrs time at set interest. In effect the govt has just removed cash from the economy (fiscal policy) by sequestering it in the IOU (it does this to cool an overheating economy).

I am not allowed to ‘spend’ that IOU, but I can #Trade it for a quick profit (if I can find a buyer). Or, I can use the IOU to secure a loan which I can then spend or invest. Economic activity is thus generated without the govt injecting money (spending) into the economy (it would normally spend to stimulate a flagging economy).

In Australia, Govt bonds are issued by the Reserve Bank (responsible for monetary policy to keep inflation in check and a determined level of unemployment). It can vary the interest rates of these bonds and set the official cash rate to steer the economy where it thinks it ought to be (neo-classical economics here).

So the selling of Govt bonds is not ‘borrowing’ at all just a means to control the amount of cash currency in the economy to keep it bubbling along some predetermined parameters. There is a lot more to this ‘control’ and Murphy addreses it in the article and in the process gives us one of the primary features of the Modern Money Theory (MMT).

I think I have that right. Happy to get corrected.

Read more:
https://www.taxresearch.org.uk/Blog/2026/06/30/what-gary-stevenson-got-wrong-on-bonds/

Best and clearest explanation of Govt #Bonds that I have ever read, it’s from Prof Richard Murphy’s blog (at taxresearch.org,uk ).

” Governments do not borrow because they need money. The government spends first. In doing so, it creates deposits and reserves within the banking system. Taxation then removes some of that money from circulation in the economy. What is left, the deficit, is simply the money that the government has spent but has not yet taxed back.”
“{…} anyone buying a newly issued gilt or government bond does not provide the government with spending power that it previously lacked. Instead, the purchaser exchanges one government liability for another.”

#Economics101 #MMT #GovtBonds #BondMarkets #QuantitativeTightening and #QuantitativeEasing #ReserveBank #CahsRate #BondInterest

My understanding of the above:

A Bond is like the govt giving me an IOU against some of its own currency I exchange for it with a guaranteed repayment in 10 yrs time at set interest. In effect the govt has just removed cash from the economy (fiscal policy) by sequestering it in the IOU (it does this to cool an overheating economy).

I am not allowed to ‘spend’ that IOU, but I can #Trade it for a quick profit (if I can find a buyer). Or, I can use the IOU to secure a loan which I can then spend or invest. Economic activity is thus generated without the govt injecting money (spending) into the economy (it would normally spend to stimulate a flagging economy).

In Australia, Govt bonds are issued by the Reserve Bank (responsible for monetary policy to keep inflation in check and a determined level of unemployment). It can vary the interest rates of these bonds and set the official cash rate to steer the economy where it thinks it ought to be (neo-classical economics here).

So the selling of Govt bonds is not ‘borrowing’ at all just a means to control the amount of cash currency in the economy to keep it bubbling along some predetermined parameters. There is a lot more to this ‘control’ and Murphy addreses it in the article and in the process gives us one of the primary features of the Modern Money Theory (MMT).

I think I have that right. Happy to get corrected.

Read more:
https://www.taxresearch.org.uk/Blog/2026/06/30/what-gary-stevenson-got-wrong-on-bonds/

Best and clearest explanation of Govt #Bonds that I have ever read, it’s from Prof Richard Murphy’s blog (at taxresearch.org,uk ).

” Governments do not borrow because they need money. The government spends first. In doing so, it creates deposits and reserves within the banking system. Taxation then removes some of that money from circulation in the economy. What is left, the deficit, is simply the money that the government has spent but has not yet taxed back.”
“{…} anyone buying a newly issued gilt or government bond does not provide the government with spending power that it previously lacked. Instead, the purchaser exchanges one government liability for another.”

#Economics101 #MMT #GovtBonds #BondMarkets #QuantitativeTightening and #QuantitativeEasing #ReserveBank #CahsRate #BondInterest

My understanding of the above:

A Bond is like the govt giving me an IOU against some of its own currency I exchange for it with a guaranteed repayment in 10 yrs time at set interest. In effect the govt has just removed cash from the economy (fiscal policy) by sequestering it in the IOU (it does this to cool an overheating economy).

I am not allowed to ‘spend’ that IOU, but I can #Trade it for a quick profit (if I can find a buyer). Or, I can use the IOU to secure a loan which I can then spend or invest. Economic activity is thus generated without the govt injecting money (spending) into the economy (it would normally spend to stimulate a flagging economy).

In Australia, Govt bonds are issued by the Reserve Bank (responsible for monetary policy to keep inflation in check and a determined level of unemployment). It can vary the interest rates of these bonds and set the official cash rate to steer the economy where it thinks it ought to be (neo-classical economics here).

So the selling of Govt bonds is not ‘borrowing’ at all just a means to control the amount of cash currency in the economy to keep it bubbling along some predetermined parameters. There is a lot more to this ‘control’ and Murphy addreses it in the article and in the process gives us one of the primary features of the Modern Money Theory (MMT).

I think I have that right. Happy to get corrected.

Read more:
https://www.taxresearch.org.uk/Blog/2026/06/30/what-gary-stevenson-got-wrong-on-bonds/

Best and clearest explanation of Govt #Bonds that I have ever read, it’s from Prof Richard Murphy’s blog (at taxresearch.org,uk ).

” Governments do not borrow because they need money. The government spends first. In doing so, it creates deposits and reserves within the banking system. Taxation then removes some of that money from circulation in the economy. What is left, the deficit, is simply the money that the government has spent but has not yet taxed back.”
“{…} anyone buying a newly issued gilt or government bond does not provide the government with spending power that it previously lacked. Instead, the purchaser exchanges one government liability for another.”

#Economics101 #MMT #GovtBonds #BondMarkets #QuantitativeTightening and #QuantitativeEasing #ReserveBank #CahsRate #BondInterest

My understanding of the above:

A Bond is like the govt giving me an IOU against some of its own currency I exchange for it with a guaranteed repayment in 10 yrs time at set interest. In effect the govt has just removed cash from the economy (fiscal policy) by sequestering it in the IOU (it does this to cool an overheating economy).

I am not allowed to ‘spend’ that IOU, but I can #Trade it for a quick profit (if I can find a buyer). Or, I can use the IOU to secure a loan which I can then spend or invest. Economic activity is thus generated without the govt injecting money (spending) into the economy (it would normally spend to stimulate a flagging economy).

In Australia, Govt bonds are issued by the Reserve Bank (responsible for monetary policy to keep inflation in check and a determined level of unemployment). It can vary the interest rates of these bonds and set the official cash rate to steer the economy where it thinks it ought to be (neo-classical economics here).

So the selling of Govt bonds is not ‘borrowing’ at all just a means to control the amount of cash currency in the economy to keep it bubbling along some predetermined parameters. There is a lot more to this ‘control’ and Murphy addreses it in the article and in the process gives us one of the primary features of the Modern Money Theory (MMT).

I think I have that right. Happy to get corrected.

Read more:
https://www.taxresearch.org.uk/Blog/2026/06/30/what-gary-stevenson-got-wrong-on-bonds/

Gilt rout sparks calls for Bank of England to slow bond sales

#Economy #AndrewBailey #BankofEngland #Borrowingcosts #business #centralbank #CentralBanks #CentralBanksoftheEuropeanSystem #DeutscheBundesbank #ECB #ESCB #Europe #European #EuropeanCentralBank #EuropeanCentralBanks #FederalReserve #giltyields #henrycook #IPPR #MUFG #News #panmureliberum #qt #Quantitativeeasing #quantitativetightening #simonfrench #THEBANKOFENGLAND #TheBankofFrance #TheBankofItaly
https://www.europesays.com/2973044/

The #Britisheconomy (#UKEconomy) has been #underperforming for almost two decades, with #economicgrowth having declined significantly since the 2008 #financialcrisis". The #BankofEngland's #quantitativetightening is further making the situation worse, and #RachelReeves, as some have said, fears the banks and won't to tell the Bank to stop selling #bonds.

Link: https://theconversation.com/calls-for-rachel-reeves-to-quit-as-chancellor-are-overblown-but-they-highlight-what-her-real-problems-are-247704

#ukpolitics #economy #banks #bank #finances #chancelloroftheexchequer #ukgovernment #labourparty

JPMorgan CEO Jamie Dimon Calls 2023’s Banking Fiasco a ‘Mini Crisis’, Foresees Consumer Savings Depleted by Year’s End - Four days ago, JPMorgan Chase CEO Jamie Dimon was interviewed by The Economist and... - https://news.bitcoin.com/jpmorgan-ceo-jamie-dimon-calls-2023s-banking-fiasco-a-mini-crisis-foresees-consumer-savings-depleted-by-years-end/ #quantitativetightening #2008financialcrisis #2009financialcrisis #potentialrecession #u.s.bankingcrisis #uninsureddeposits #federalfundsrate

JPMorgan CEO Jamie Dimon Calls 2023’s Banking Fiasco a ‘Mini Crisis’, Foresees Consumer Savings Depleted by Year’s End - Four days ago, JPMorgan Chase CEO Jamie Dimon was interviewed by The Economist and... - https://news.bitcoin.com/jpmorgan-ceo-jamie-dimon-calls-2023s-banking-fiasco-a-mini-crisis-foresees-consumer-savings-depleted-by-years-end/ #quantitativetightening #2008financialcrisis #2009financialcrisis #potentialrecession #u.s.bankingcrisis #uninsureddeposits #federalfundsrate

JPMorgan CEO Jamie Dimon Calls 2023’s Banking Fiasco a ‘Mini Crisis’, Foresees Consumer Savings Depleted by Year’s End - Four days ago, JPMorgan Chase CEO Jamie Dimon was interviewed by The Economist and... - https://news.bitcoin.com/jpmorgan-ceo-jamie-dimon-calls-2023s-banking-fiasco-a-mini-crisis-foresees-consumer-savings-depleted-by-years-end/ #quantitativetightening #2008financialcrisis #2009financialcrisis #potentialrecession #u.s.bankingcrisis #uninsureddeposits #federalfundsrate

JPMorgan CEO Jamie Dimon Calls 2023’s Banking Fiasco a ‘Mini Crisis’, Foresees Consumer Savings Depleted by Year’s End - Four days ago, JPMorgan Chase CEO Jamie Dimon was interviewed by The Economist and... - https://news.bitcoin.com/jpmorgan-ceo-jamie-dimon-calls-2023s-banking-fiasco-a-mini-crisis-foresees-consumer-savings-depleted-by-years-end/ #quantitativetightening #2008financialcrisis #2009financialcrisis #potentialrecession #u.s.bankingcrisis #uninsureddeposits #federalfundsrate

ETH hits 7-month high ahead of Shanghai and Capella upgrades - Ether has broken the $1,900 resistance level for the first time i... - https://cointelegraph.com/news/eth-hits-7-month-high-ahead-of-shanghai-and-capella-upgrades #quantitativetightening #stakingwithdrawals #executionlayer #consensuslayer #tradingpairs #shapellla #eth/btc #capella #merge #btc #eth

ETH hits 7-month high ahead of Shanghai and Capella upgrades - Ether has broken the $1,900 resistance level for the first time i... - https://cointelegraph.com/news/eth-hits-7-month-high-ahead-of-shanghai-and-capella-upgrades #quantitativetightening #stakingwithdrawals #executionlayer #consensuslayer #tradingpairs #shapellla #eth/btc #capella #merge #btc #eth

Silicon Valley Bank Faces Financial Woes as Stock Is Halted, Sells $21 Billion Bond Portfolio at a $1.8 Billion Loss

https://news.bitcoin.com/silicon-valley-bank-faces-financial-woes-as-stock-is-halted-sells-21-billion-bond-portfolio-at-a-1-8-billion-loss/

#fundraisingenvironment #Quantitativetightening #marketparticipants #governmentbailout #SiliconValleyBank #USTreasurybills #FederalReserve #Lehmandisaster #privatecapital #SilvergateBank #VentureCapital #Bankingsystem #bondportfolio