And to make the disconnect from reality complete, the Bank of England has unhitched their balance sheets from the money supply. See this Reuters story Bank of England expects balance sheet to halve when QE reversed:
Previously, the BoE said it expected its balance sheet to shrink when it ultimately reverses quantitative easing, but not to return to pre-crisis levels due to a long-term increase in commercial lenders’ demand to hold reserves at the central bank.
On Wednesday Andrew Hauser, the BoE’s executive director for markets, gave a specific estimate, and explained how the BoE intends to reduce any side-effects of gilt sales on banks’ day-to-day cash management.
“The ... framework that we are proposing ...will allow the size of the balance sheet to be determined independently from the quantity and composition of quantitative easing and quantitative tightening,” he said.
See also UK Pound Heading for US$ Parity and British Government Looking Like The Bunch of Demented Idiots They Are.
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