by Colin Grainger » Wed Jun 03, 2009 9:17 pm
HR,
I must admit that your post fairly electrified me. I thought I had misunderstood it. After a few hours mulling it over, I think you are spot on.
It just seems too simple. Imagine: write out a B of E for, say, £5 million, send it off to (who, exactly?), HM Treasury?*, and then have them deposit the money in your bank account.
They have everything they need: a formal Bill of Exchange, a payee, a payor, an account to deposit the sum demanded, and the all important signature.
As V says, this is money creation in its original, pure form. This way you avoid having to actually purchase something, and of course, there is no need to pay it back with interest.
The only problem I see is that you become the first and the third party. (Unless you have them make the payment to your legal fiction).
How close am I to understanding? Do I win a cigar?
* I know it's uncool to have a ? in the middle of a sentence. Sorry.