I published this infographic on government bonds a while ago:
I then wrote a follow-up on bond markets. I can find no evidence I published this, so here it is:
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I wrote this infographic. I used AI to create the final image.
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Looks good.
I think box 7 could be better. First, I prefer “cancel” rather than “destroy” (as another commentator suggested a while ago). Second, bullet one might imply an arbitrary creation/destruction rather than through transactions
Instead of bullets 1 and 2 I would try…..
All transactions by government create or cancel money.
Spending (salaries, pensions, contractors etc.) or purchasing government bonds both create money which increases Reserve Account balances
Taxation or sale of government bonds cancels money which reduces Reserve Account balances.
Or
All transactions by government create or cancel money. This is true for bond transactions, too.
It can issue new bonds, buy existing bonds as it pleases and repay maturing bonds when due. Private borrowers can’t do this.
Comments appreciated, Clive. I will be revising it. I prefer option 2.
That phrase “credit risk free” in box 8 and summary – I had to pull into a metaphorical mental layby and work out what it meant – and I’m still not totally sure I could explain it to someone else. I say that as someone who has found reading your recent stuff on bonds and bond markets, providing me with real light-bulb moments – these are really good. But “credit risk free”???
Credit-risk-free simply means there is no risk of not being repaid. That is it. I could reduce it to risk-free, and I will.
Thank you.
Thank you Richard.
Good Morning,
the only other infographic I can’t find in the library is”£3 trillion of debt-so what”.
i use the infographics as a great source of reference and find them the best learning aid for my limited brain and to show anyone I can .
Thany you so much for them.
Many thanks
That has now been uploaded