Authored by Simon White, Bloomberg macro strategist,

The Bank of England’s new lender-of-first-resort approach to monetary policy highlights how the dollar, the pound and other western fiat currencies are on a path of secular and permanent debasement.

Seldom are the arcana of central banking of great interest to a general audience. But now and again there are developments in this niche and monastic discipline that merit sitting up. The BOE is in the process of implementing a new system for reserves that will likely lead to greater balance-sheet deterioration and therefore further debasement of the currency. In the US the system is different, but the ultimate destination is poised to be the same, with the dollar’s real value continuing to be degraded.