And if, during a boom, the demand for loans expands beyond the capacity of the economy – in other words, clients apply for and bankers create too much credit, which is then used to chase too few goods, services and speculative assets – the money supply expands. In this case, excessive borrowing and credit creation is likely to have an inflationary impact. If money is lent or borrowed at high real rates of interest, then it does indeed quickly become unpayable debt.

Equally, its scarcity means that, unlike the endless and myriad social and economic relationships created by credit, the capacity of bitcoin to generate economic activity is limited (to 21 million coins). The currency’s architects deliberately limited the amount of bitcoins in order ostensibly to prevent inflation. In reality, the purpose is to ratchet up the value of bitcoins, most of which are owned by originators of the scheme.

In this sense, bitcoin miners are no different from goldbugs talking up the value of of a finite quantity of gold, from tulip growers talking up the price of rare tulips in the seventeenth century, or from Bernard Madoff talking up his fraudulent Ponzi scheme.

When the Fed offered to buy a large number of securities held by banks, both mortgage-backed securities and government bonds, bankers exchanged these bonds – some of which were likely to be non-performing and therefore loss-making – for the equivalent of a bigger ‘overdraft’. This ought to have cleared up bankers’ balance sheets, and encouraged them to lend more into the real economy. But QE did not have that effect. In the UK bank lending actually fell. Instead the Fed and Bank of England (BoE) effectively provided the private finance sector with additional purchasing power with which financiers could go shopping for speculative assets in the FIRE sector: finance, insurance, and real estate. Lending into a weakened real economy, weakened further by austerity, was regarded by financiers as far less profitable and far more risky.

The key to tackling the problem identified by Adair Turner – the weakness of global nominal demand – is therefore expenditure, specifically, public expenditure that can be undertaken quickly: on the upkeep of roads and railways, on flood defences, on water conservation, on horticulture, and so on.

Of course, public expenditure has to be financed. The most prudent form of financing is loan issuance, not ‘deficit spending’ which implies permanent government overdrafts. Loan issuance, arranged by the government’s debt management office in concert with the central bank and fixed at low rates supported by central bank action, can finance ongoing government expenditure. Thanks to the multiplier, that expenditure on employment will quickly generate returns to the public treasury in the form of tax revenues for repayment of loans.