A Letter to a Leading Economist in the UK

ICBUK

Dear Sir

I have a manufacturing company in China. This is due to the fact that Manufacturing in the UK has been systematically destroyed by successive UK Governments.

A few days ago you said that Quantitative Easing would not, and has not worked. In the current form you are correct.

Currently QE money is given to the banks. Banks are only seeking to make money. Lending money to Industry and Manufacturing is high risk and gives poor returns.

Industry, Manufacturing and Construction are the only parts of the economy that create balance sheet wealth and ultimately drive the economy.

If the UK wants to improve its Balance Sheet it needs to be MAKING STUFF again.

Therefore I propose that the Bank of England sets up a subsidiary bank called the Industrial and Construction Bank of the United Kingdom (ICBUK).

If the Bank of England or the Government believe that new money is put into the economy then it should be lent out through the ICBUK only to Manufacturing, Industrial, and Construction companies.

The money that is lent out must be put into UK banks, but the lenders get to choose which bank.

So, the Bank of England and the Government get to print the money; the wealth creating businesses get all the money they need; and the money ends up in the UK banking sector.

Also, if any of the lenders default on the ICBUK loans, the Bank of England simply writes off the money which it had ‘printed’ in the first place. The money still remains in the system. Historically the Bank of England has not withdrawn substantial amounts from the economy therefore this is not a problem.

Imagine if the GBP 830,000,000,000 QE that was distributed to the Banks in 2008/2009 had gone into Manufacturing, Industry, and Construction through the ICBUK?

Recession Over.

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