Given the volume of money currently in the UK system (actual funds excluding available facilities and disregarding any government money now being deployed), when the Coronavirus music effectively stops where will that money actually be, being different to where it currently is?

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Posted by Charles Russam
Asked on March 17, 2020 11:45 am
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The question I feel is now redundant and is based on a classical economists view. We are in "helicopter money" land now. Debt jubiliee and direct payments to citizens is the only answer to the current issue. Businesses and individuals are already hightly leveraged. No amount of credit creation will generate consumption and get the economy going.

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Posted by DHN User
Answered on March 20, 2020 5:21 pm
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With regard to your question I suspect carefully formulated it might seem a bit technical – there are after all various definitions of money supply, M1, M2, M3 etc., and I am not sure that where the money is held (it should be in circulation to count as money supply) is necessarily the only relevant question. How much money supply there should be will also be critical (after all we have had quantitative easing for a number of years now), and the terms on which credit is available and to whom will be of considerable importance. I wonder whether it might be re-framed along the lines of ‘How should the government ensure an adequate supply of cash and credit to enable individuals and companies large and small to survive an unprecedented impact on their cashflow due to the Corona virus?’

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Posted by Charles Russam
Answered on March 17, 2020 12:50 pm
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