In a response youtube by Mr. Richard Murphy of the Tax Justice(injustice) Network, my friend Mr. Henry Law pointed this out about the silly way people understand how money comes into and is removed from, circulation.
Its kind of forbidden knowledge. Particularly that even if you're permitted to think about it, its still a superficial function within the whole world of the economy.
Its important to point out that Mr Murphy has spent his entire career, knowing what the best tax is, but never telling anyone about it. Judging by the violent response you get when you ask him about this, which I've tried several times, that violence is a strong signal he's had a lifetime of funding from charities who are heavily invested in the mortgage market. He is implicitly forbidden from talking about it.
Not really. Interest rates are ultimately set by the market, and real interest rates have for centuries hovered around 5%. This goes with the old principle that 20 years' harvest buys the field.
The Bank of England sells on the debt in the form of government bonds. These are discounted by the market and that establishes the market interest rate.
Money has lost 98% of its value since about 1950. One of the consequences is that money is cannot effectively perform one of its main functions, which is to act as a store of value. There is also the moral implication that people are robbed of their savings; inflation is theft.
The consequence is that people use real estate as a store of value. In reality, this is a cover for using land as a store of value, since buildings are a depreciating asset. That is the main reason why the UK economy fails to perform. The most reliable investment is land. This applies also to foreign investment. Oil producers and China have accumulated vast sterling balances which are mostly invested in real estate - land, adding nothing to UK productive capacity. It has, however, bought political influence and helps to explain the rotten politics