Lots of interesting points. Trouble is you miss the big picture. The Banks and the Government are playing the system as it exists, they have very few options, one is QE delivered at the top end which hasn't worked, the reason it hasn't worked is that top end QE is usually spent by Government on public projects. The Government has thankfully resisted the urge to do that.
If they had, then the beneficiaries are always the large contract holders ( think G4s ). Once the money is spent it enters the money pot and causes inflation to ripple down from top to bottom. It's this ripple down and the associated havoc it causes that is destructive, people at the bottom of the ladder see prices climbing while their wages stay static. Then starts the Union strikes, reduced spend into small businesses, more redundancies and small business failures until everything eases up. However, as yet we don't know the long term affects up top down QE, because it's gone into the banks, it's like a magma chamber in a volcano ( the BoE must be very aware of that) it can sit there a long time until the moment is right and then it will feed into the economy like adrenalin and that is incalculable.
Now the BoE has realised that there is no funds going back into the economy through this route ( don't think the bank are getting rich on it either it's just a big store of unused debt, like fuel in the tank of a car, it's useless until the engine begins burning it. ). So the option is to inject cash ( increase debt ) at high street level. That's not a bad plan but it's horribly flawed. When the Government use the Keynesian approach of public spend at the top level, it is the Government who spends the money on our behalf. It's then recovered from tax receipts. Inflation increases overall and covers over some of the debt. In other words the debt gets paid down. All things equal there are no defaulters.
In lending to high street customers the banks take on risk. In effect what the Government is trying to do is to search out those who are still credit worthy and put them into debt directly. The hope is that customers spend, businesses flourish and therefore tax receipts increase. It reduces the trickle down effect of inflation as it swaps pGovernment borrowing for direct public borrowing and spending. The big fly in the ointment is that this entails risk in lending, both from borrowers and banks. It means banks have to be scrupulous in lending out money, they will have to lend it as secured loans against property. The idea is it would be used to buy consumer goods and for low level capital expenditure. Now, let's look at that. Do they really think the public and small businesses have huge confidence in the economy and housing market ? Do they really imagine that small and medium businesses want to increase debt at a time when it's clear everyone is actually in reverse and trying to reduce debt.
So, now we have a magma chamber of money waiting to be released at commercial bank level and another huge wedge of cash at high street level. It only takes one spark to ignite that powder Keg and inflation is likely to go through the roof. However I think it's highly unlikely in the short term.
So, what's the bigger picture? It's simple, the current banking and Government system has failed, the public has lost confidence, the days of huge debt and happy spending are over, everyone has a big debt hangover and isn't going to another party for a long time. All the time this goes on the economy is in a frightening position, it's stuck in reverse.
The enormous debt expansion had to roll on and on for things to work. When it stalls then debts get repaid, defaults on loans destroy asset prices, people feel poorer and so spending gets less and less, consequently more businesses fail, more people end up on benefits, tax receipts fall and so Government borrowing keeps increasing.
It's that borrowing that benefits the bankers. Despite the rationing of money, the bankers continue to make profit and continue to become richer, the only problem is very high inflation and Government default, but those Greedy bankers don't worry about that, there are always currencies that can be swapped, as long as an economy is running somewhere they are sitting pretty. They are equally happy when we are all borrowing so it's a win win for the bankers.
The BoE is both part of the Government and privately owned through a complex ownership paper chase. The public don't own the actual bank, the owners are kept secret under the official secrets act but are rumoured to include the Rothschild's and the Queen.
