4) Bank of England: Creating Money Gives you “Value for Nothing”
Here’s a quote from Paul Fisher (Executive Director of the BoE and member of the MPC) broadcast on Sunday (in a programme called “What is Money?” in the Radio 4 series “Analysis”):
Presenter: Would you mind if I printed my own money – it wouldn’t look anything like yours from the Bank of England.
Paul Fisher (Bank of England): Yes we would mind. When you start printing money, you create value for yourself. If you could issue one thousand pounds worth of IOUs, you’ve got a thousand pounds for nothing. And so we do restrict people’s ability to create their own notes in that way.
Presenter: You’re protecting us against ourselves.
Fisher: We’re protecting you from charlatans.
So if someone can create money out of nothing, they get value for nothing? And are charlatans? Does this only apply if you’re printing paper money, or does it also apply to the banks that have created over £2trillion of money out of nothing electronically? Did they get £2trillion of value for nothing? Something for us all (and especially the Bank of England) to ponder!
Listen to the original here (29 min; right towards the end)