There is a lot of media attention about the UK Government now "printing money". Various articles say this does not mean physically, but involves buying up various assets and even though I knew this didn't mean I'd have a new wad of fifties in my wallet tomorrow, I hadn't found a satisfactory explanation of the process until I found the following:

For those who wonder how a central bank creates money, the process is shockingly simple. If they decide they want to increase the money supply they simply buy something (normally some kind of government securities), and do this by simply doing the equivalent of writing a cheque for it. This means that a credit appears in an account of whoever accepted the cheque and money has appeared. The trouble is that central bank has not actually used anything to pay for the securities - it just creates the credit, and the money supply has increased by the amount of that credit. Money from thin air....if a central bank wants to decrease the money supply, it simply sells the asset, and the money simply disappears...

back to main index | more articles in this category | add to/query this article?
use this link to subscribe ONLY to this category, otherwise use the other "subscribe" links

More about the  living category

Our living section contains views, opinions and advice about day-to-day living, lifestyle and wellbeing. Some of our material is syndicated and does not necessarily represent the view of easypeasy.com

More about the author

nik is webmaster and site administrator

All Products Books Pop Music Classical Video DVD Toys/Games Baby Videogames Electronics Software Tools Outdoor Kitchen/House Camera/Photo Wireless

Pick up an obscenely cheap IPOD now from easypeasy.
It's the law!

Easy Guides
in web & email...
[effective email]