Robert Stephens (Letters, July 16) intermixes the effects of quantitative easing (QE) with the effects of low base rates.
QE boosted the stock market, so the benefits went mainly to those with shareholdings who intended to sell before the market recovered in the next economic cycle - anyone recently retired with a defined contribution pension.
His other benefit of lowered borrowing costs is simply a result of the low base rate.
The recent growth in the economy coincides with a halt in austerity measures in the run-up to the next General Election. Suddenly £500 million can be found for Glasgow, and £1.1 billion for defence announced in the last few days. But both Labour and the Conservatives promise matching each others' return to cuts after the election.
Not listed in his letter as a financial asset of the UK is the £375bn of UK debt held by the Bank of England. One quarter of the UK national debt is owed to the UK itself. How is this possible? Where did the Bank of England get the money to lend to the UK?
The Bank of England simply created the money to lend to the Government. One wonders why we are going through austerity, with a 2.5 per cent rise in VAT, a bedroom tax and food banks in every corner of the land. Why did the Government not simply borrow direct from its bank?
The answer is, of course, if the bank creates too much money, it causes inflation. But inflation is below the Bank's target of 2 per cent, and has been for some time. Indeed, the last period of price inflation above the target was when the 20 per cent VAT rate bumped up prices overnight.
Alan Ritchie,
2/2 72 Waverley Street, Glasgow,
The £46 billion bailout to RBS provided by the UK Government will be met by UK taxpayers and not by India, so it is disappointing to say the least that 63 jobs in its Business Banking Support Unit are to be outsourced to the sub-continent ("Anger as RBS moves UK jobs to India", The Herald, July 16).
It would be instructive to know how the projected savings compare to the recent £588 million paid to senior staff in bonuses.
"Business Banking Support Unit" and RBS? That's ironic.
R Russell Smith,
96 Milton Road,
Kilbirnie.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article