Debunking Economics - the podcast

Selling bonds to punters shrinks the economy

Mar 6, 2024

Exploring the UK government's decision to sell bonds to retail investors, potentially shrinking the money supply. Critiques on neoclassical economics and implications on market dynamics. Analysis on bonds managing inflation, retail investor engagement, and controversial moves like selling Nat West shares.

40:46

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Quick takeaways

Opening government bonds to retail investors may shrink money circulation, impacting the economy negatively.

Selling off government shares to retail investors can alter the money supply, affecting liquidity and market stability.

Deep dives

Government Bond Issuance to Retail Investors

The podcast delves into the UK government's decision to allow retail investors to purchase government bonds on the primary market. By opening up this option, the government aims to attract more funds for its deficit financing. This move reflects a belief that retail investors could play a significant role in meeting the country's overall financing needs. Concerns arise from potential impacts on yields and bond values as a flood of retail investors might lead to higher bond prices, potentially affecting future payouts.

Introduction

3min

Government Bond Issuance and Neoclassical Economics

16min

Analyzing the Role of Bonds in Managing Inflation and Retail Investor Engagement

3min

Bonds Issued Directly to Retail Investors and Musk's Controversy

7min

Navigating the Complexities of Bond Investments

11min

Government's Plan to Sell Nat West Shares and its Potential Impact on Money Supply

4min

The UK Debt Office has started selling bonds to retail investors through the primary market Previously the only way you could buy government bonds was through financial institutions, through ETFs, for example. The reason giving for opening it up to consumers is that it will allow them to “contribute more significantly to meeting the overall financing requirement”. Hat makes it sound like they are concerned that there won’t be sufficient demand from institutional investors, including the banks. Steve Keen says what they probably don’t understand is this move will actually shrink the amount of money in circulation. That’s probably a bad move in a stagnant economy. To make matters worse, they ar ehell bent on selling off the government’s shareholding of the Nat West group, which will have a similar impact. Listen in to find out how and why.

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Debunking Economics - the podcast

Selling bonds to punters shrinks the economy

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Government Bond Issuance to Retail Investors

Central Bank Capacity and Bond Financing

Risks of Retail Investors in Bond Market

Government Bonds and Money Supply Dynamics

Remember Everything You Learn from Podcasts