To: John Barrdear and Michael Kumhof
cc: HM Treasurer
Dear Authors,
In Your Staff Working Paper No. 605 July 2016 at page 12, note 23, You write:
"In this context, it bears re-emphasising that central bank money,
while found on the liability side of the central bank’s balance sheet,
is neither defaultable nor redeemable, and is therefore different from
the common conception of debt."
http://www.bankofengland.co.
I dissent from this view because money issued by the banks carry a
seigniorage debt in favour of the Treasury. I.e. the HM Treasury must
account for an asset equivalent to the liability "currency in
circulation" exposed by the Bank of England and this asset can be
called "seigniorage received from the central bank," providing the
Treasury with much needed funds.
Else, the seigniorage from currency creation will be lost and forever
confined to a "fake" unresolved liability in the Bank's balance
sheet.
I don't pretend a reply because the scope of this email is to post a
copy over the INTERNET so that the sovereigns in the UK can think
about it for themselves.
Thank You for Your attention,
Marco Saba
IASSEM
P.S. Here my previous essay for the case of the Fed:
Federal Reserve: the $1.4 trillion seigniorage debt to the US Treasury
http://leconomistamascherato.
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