BoE loans, debts & terms

Dear Bank of England,

It is my understanding that the Bank of England ‘loaned’ the
government of the UNITED KINDOM a certain sum of GBP, and that
‘money’ is actually created, purely by the governments promise to
pay it back. i.e. the Bank of England created money out of ‘thin
air’.
1. Please tell me what the terms of those loans are – any interest
owed, the length of the agreement and penalties for non-payment.

2. Assuming that at some point representatives of the Bank of
England wrote a ‘business plan’ and that there is interest being
accrued on money loaned by the Bank of England to the United
Kingdom government (which is passed on to the people via taxes) :
where do you expect that additional interest payment to come from
given that the bank of England has not yet created it?

3. Does the Bank of England have any outstanding debt or promises
to pay some goods or services to external organisations such as the
World Bank, the International Monetary fund? What are the terms?

Yours faithfully,

Mr N Straughan

Dear Enquiries,

Thank you for your response and information, I wondered if you can
clarify some details on the points you raise.

This is my understanding, please confirm or correct: The ‘money’
(GBP) that the UK Government obtains using their overdraft facility
with the BoE (and managed by the DMO), is created by the BoE using
the Governments ‘promise to pay it back’ as a ‘negotiable
instrument’? i.e. The BoE creates the something of value out of
‘thin air’ which private organisations and individuals purchase for
‘real money’ (GBP). If not, what is the ultimate source and
mechanism for the creation of the money used by the BoE?

How and why was the £13.4 billion overdraft (‘Ways and means’) paid
back by the government to the DMO in 2008?
Referring to my original question (1) – I asked “Please tell me
what the terms of those loans are – any interest owed, the length
of the agreement and penalties for non-payment.” In the light of
your information, please can I re-phrase the question to 2 parts:

1. a) Please tell me what the terms of the Gilts the BoE bought
from the UK government. From
http://www.dmo.gov.uk/documentview.aspx?...
I understand that the BoE owns £153.7 billion in UK government
Gilts (out of £767.2 Gilts outstanding).

1. b) What are the terms of the overdraft facility the BoE extends
to the UK Government? (i.e. Interest charges, late payments, all
other fee’s, assets collectable for failure to pay etc)

Referring to my original question (2), which you don't appear to
have answered, please tell me where the BoE/DMO expect the
government to get the money to pay back any interest charges or
associated fee’s with the loans/over drafts/gilt sales/ bond sales
etc. Is this by borrowing more money (aka selling more debt from
thin air), by taxing the people, by creating money out of thin air,
or some other way? i.e. what remedy is there to pay back the
‘debts’ and associated fee’s?
With the overdraft now being paid off, it suggests that the
government has no debts to the BoE or DMO. Is this true? However it
is my understanding that the ‘National Debt’ is still around £893.4
billion. I understand that some of this is through the sale of
Gilts (around £767.5 billion according to
http://www.dmo.gov.uk/documentview.aspx?...)
Referring to my original question (3), which it seems you only
partly answered: Who does the government owe the National Debt to?
(Another way of wording this is: Specifically which organisations/
individuals bought the ‘UK National Debt’? i.e. Do the World Bank,
IMF etc own or hold assets of the UK government?

To help you answer my questions I would like to say: In summary I
am trying to understand how money is created out of thin air; who
has the authority to create new money; if all money is loaned in to
existence; if all (or most) newly created money is loaned (or
bought with nothing more than a promise to pay it back) with
interest added; if it is possible to pay back these loans (plus the
interest) without there being close to zero money (or minus amounts
of money) left in circulation, and without the Banks collecting
assets of real value from those who cannot find the money to pay
back the loans plus interest (because it was never created in the
first place); if the current money as debt system can only create
more and more debt, upon more and more debt; if the money system is
a biggest slave system / ‘real wealth collection service’ the world
has ever seen... because that’s what it looks like.

Any help you can give in understanding this, or correcting me is
truly appreciated.

On a side note – I recently learnt that handing over statutory
regulations of England to a foreign power was outlawed forever back
in 1600’s (unless the foreigners beat us in a war) and is regulated
by the Treason Act. The EU is a foreign power, so following the
rules of this foreign power who did not beat us in a war could be
considered treasonous. It is probably worth checking to make sure
you are not involved in Treason by following their rules. Here's a
short video presentation for you interest:
http://video.google.com/videoplay?docid=...

Yours sincerely,

Nick Straughan

Dear Mr Norman,

Your detailed answers are truly appreciated, and I thank you for
the opportunity to communicate with you. I have learnt a lot about
how 'money' works this past year, I thought you may be interested
to see my findings.

It is interesting to note that:

1. Banks (central and private) have the power to create money out
of thin air, based on the debtors promise to pay it back.

2. The power to create GBP, to increase or decrease its value is no
longer held by the people of the United Kingdom or its Government.
The United Kingdom’s membership of the EU (which in itself is
illegal under the British Constitution) makes it illegal for the
BoE to create money and then lend it to the United Kingdom
Government. This forces the Government to sell debt to private
individuals, companies, institutions and, presumably, to other
sovereign nations thus transferring control of the money supply
away from the United Kingdom entirely.

3. The practice of usury / adding interest to loans was considered
morally wrong by many important ethical teachers -- Moses,
Aristotle, Jesus, Mohammed, and Saint Thomas Aquinas, for instance.

4. The BoE continuously devalues the purchasing power by a target
of 2% per year.

5. The BoE incurs virtually no cost in creating money (through the
sale of debt), yet the people of the United Kingdom have a large
percentage of their personal rewards taken from them (in the form
of taxes) in order that to pay the money, plus interest, back.

6. The people of the United Kingdom are effectively forced to
exchange their labour for GBP, a large percentage of which is then
taken as (now increased) taxes in order to pay off the ‘national
debt’ even though the BoE should have been able to create the money
from thin air in the first place (with no cost attached other than
the deflation due to increased money supply). The people of the
United Kingdom are working for several weeks per year to ‘pay’ for
something which was has no intrinsic value and was created from
thin air by the administrators of the system.

7. Given that all money is ‘loaned’ in to creation with interest
added, and the money to pay back the interest was never created; it
means that either the debtor must borrow more money (with yet more
interest added) or default on their loan, giving the bank the
‘legal right’ to collect assets to the value of the outstanding
loan.

8. The real power structure for this country lies within the power
to control the money supply, and not with the puppets in
Parliament.

9. The money system was originally set up to be a servant of the
people, to facilitate the exchange of goods and services. Now money
is the master of the people, and facilitates slavery and transfers
wealth to those who designed and control the system.

10. This system only serves to benefit the owners and shareholders
of the banks and other large private entities and deprives the
people of their liberty, wealth, property, natural surrounding and
freedom.

I sincerely hope that a better, fairer system can be put in place
so we can live in harmony with each other and the Earth. Do you
know of any alternative systems for the exchange of goods and
services we could consider?

Yours sincerely,

Nick Straughan