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Well, this is depressing. The Bank of England openly admitting it wants to curb zero inflation. Up is down and black is white again. http://www.theguardian.com/business/2015/feb/12/bank-of-england-warning-over-impending-interest-rate-rise "Britain is sliding towards its first bout of negative inflation in more than half a century, the Bank of England has said, but strong economic growth should stave off the threat of a deflationary spiral. The slump in oil prices and falling food prices is likely to push inflation to zero in the second and third quarters of 2015, probably dipping into negative territory for one or two months this spring, the Bank said in its February inflation report."

Could anyone please comment on "Money creation in the modern economy" report and the information presented by the Bank of England? http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q102.pdf They say that it is popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. In conclusion: ..banks create money whenever they lend to someone in the economy or buy an asset from consumers. And in contrast to descriptions found in some textbooks, the Bank of England does not directly control the quantity of either base or broad money. So is it same process as in fractional banking but with 0% reserve requirements? Is it somewhat different in USA? Report also said "The Bank of England is nevertheless still able to influence the amount of money in the economy. It does so in normal times by setting monetary policy — through the interest rate that it pays on reserves held by commercial banks with the Bank of England. More recently, though, with Bank Rate constrained by the effective lower bound, the Bank of England’s asset purchase program has sought to raise the quantity of broad money in circulation." Here is Steve Keen explaining it: http://youtu.be/W_jc0cYCg14?t=15m2s (at the beginning he seems to be ignorant of Regression theory, but never the less...)