"If you think you know what 'debt' is, read on""Nowhere is the ludicrous circularity of debt more starkly exposed than when looking at the domestic holding of UK gilts. The biggest single holder of UK government debt is the Bank of England, mainly through the programme of quantitative easing – which is essentially issuing gilts and buying them back from yourself with interest using imaginary money. Banks and other financial institutions are also in on the act. At its peak in the second quarter of 2012 their holding of UK gilts was worth £215bn. Simply put, this means that we borrowed money from the sector which needed bailing out and gave it back to them as a bailout. Not only have banks, including RBS and Lloyds, been buying gilts with the money we gave them, we specifically demanded that they do it, in order to detoxify their investment portfolio.At this point, no doubt, some sage is already furiously typing in the comments section that we didn't just give them the money; we purchased shares in the companies. But as the sale price of Northern Rock and attempts to revalue and hurry the sale of Lloyds and RBS demonstrate, we will never make anywhere near the money we put in. So, at least some of it was a generous gift from all of us, including future "us", to the incompetent bank directors' bonus fund".