Monday, August 10, 2009

Bank of England Reserve Balance Update: July 2009

The Bank of England released it's monthly reserve balance report today, verifying that a literal explosion in the size of reserve balances has occurred. Back in April of 2009, the BOE reported total reserves at 71.3 Billion Pounds; by July that number had mushroomed to 152 Billion Pounds outstanding. Other selected figures of note from the release:
  • the 12 month reserve balance growth rate stands at 442.3%
  • the reserve balance grew 21.3%, Month to Month
  • the BOE seems to have "moderated" it's expansion of reserve balances, leveling off at a smooth ~27 Billion Pounds per month; this creates a deceptive illusion in that the monthly growth rate of reserves has been in decline despite the absolute level of expansion remaining relatively the same.
  • What UK recovery?
The situation in the UK is literally spiraling out of control. The American press seems to have taken little notice to this fact, choosing to focus instead on the less-worse job numbers, and lulled to sleep by the outrageous-yet-no-longer-explosive Federal Reserve balance sheet. As for the Bank of England, it appears that the decision has been made to avert deflation at any cost.

Alas however, inflation has historically been far more preferable than deflation - for the ruling class that is. We all know that inflation ravages the savers of the world; a category that does not include the governments of Western industrialized nations.

*InfoNgen facilitated this post's research

Bank of England Reserve Balances as of July2009 Sphere: Related Content

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