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Re: Billions?

The lender is anyone foolish enough to buy UK treasuries. The bill will either eventually rest with future taxpayers or he'll print the money, in which case the bill will eventually rest with anyone foolish enough to hold sterling for longer than overnight in the future.

Darling/King/Broon have essentially announced their intention to attempt to inflate their way out of this. I think it will put what happened under Thatcker into perspective. It doesn't really matter how they create money supply, whether by directly taking on government debt or forcing the BoE into its lender of last resort role when the commercial banks get fully nationalised in about 18 months time (which is just what the bunch of incompletely reformed trots currently running the country want), having been forced (starting round about now) by the government into "resuming lending at 2007 levels", at rates of interest that wouldn't cover the risk on a loan of £10 to your best friend, let alone the risk of lending to people and companies during a recession.

Suddenly, all that oh-so-important "sovereignty" that goes with having a national currency controlled by national politicians seems somewhat hollow, doesn't it? My money is now (quite literally) on Euro parity by the middle of next year, not because I think the Euro is particularly strong, but because Sterling is now in one of its terminal declines.