Even the Financial Times publishes this nonsense

From today's FT:

The Bank of England’s monetary policy committee is widely expected to cut its main rate to a new record low of 0.5 per cent, a move that will mark the beginning of a series of unorthodox measures. Termed “quantitative easing”, these steps are intended to pump money into the banking system without first borrowing it elsewhere – a process more commonly known as “printing money”.

*sigh*

We've done this before. All a government (The Treasury, The Bank of England and every single government department) can do is hand out bits of paper with numbers on them and collect bits of paper with numbers on them. Those bit of paper they hand out might be bank notes (non-interest bearing securities), they might be twenty-year index linked gilts (interest bearing securities) or they might be purely electronic balances with the Bank of England. The bits of paper they collect are also largely electronic, but this is ultimately cash that people have paid in at banks and the number on the bit of paper called 'your bank statement' just gets smaller (e.g. when you pay your tax), or indeed bigger if you were already overdrawn.

So if we agree that the government handing out twenty year index linked gilts is 'borrowing', then so is printing bank notes or indeed 'buying corporate bonds' (also known as 'lending money to businesses') in return for creating an electronic balance in favour of whomever it was who sold or issued that corporate bond.

To sum up, governments can only pump money into the banking system IF they borrow it elsewhere. In the extreme, if they do a Robert Mugabe or a Weimar, the rate of inflation will ensure that the total value of coins and notes in circulation remains roughly constant, so yes, the government can inflate away debts at the expense of savers, but the government is still borrowing by printing and issuing coins and notes.

*/sigh*