On Monday the Bank of England dished out £38bn to the holders of 4.75 per cent UK Treasury 2015 stock as it matured. It paid almost half of that to itself, before plunging into the market to buy more government debt with the cash. Welcome to the Alice-through-the-looking-glass world of Quantatitive Easing.

The cash is recycled because the Bank has set its own rules for managing this monster programme, and with QE set at £375bn, it has pledged to keep buying to replace maturing issues. There’s been much speculation about what this forced buyer will go for – the experts at Bond Vigilantes plump for the 5 per cent 2025 and 6 per cent 2028.

They also describe the net result of the redemption and reinvestment as an increase in monetary easing. Who knows? The Bank is reinvesting because that’s what it said it would do, but it’s impossible to say whether the move merely maintains the status quo or does, indeed, make monetary conditions easier just when central bankers are muttering about raising interest rates.

This recycling probably has less impact on the economy than the £26bn (and counting) in compensation payments for mis-sold payment protection insurance. Unlike the Bank’s purchases, this cash goes directly to people who are likely to spend it, in a sort of QE for the masses. Many of the payments are at the taxpayer’s expense, thanks to our shareholdings in Lloyds and Royal Bank of Scotland.

The question of exactly who pays for QE is harder to answer. Buying on this scale must distort the market – indeed, it’s designed to – and there’s the question of the status of government debt bought in by the Bank, which itself is owned by the state. It’s a circular transaction. One day the scrip with £375bn written on it will end up, metaphorically, firing the Bank’s central heating boiler, and in our financial wonderland, a chancellor will claim to have reduced the national debt by a third at a stroke.

ASOS: great business, silly price

Much fluttering in the retail dovecotes last week as Nick Robertson, the founder of ASOS, stepped back, if not down. It’s 15 years since he had the inspired idea of copying the clothes the stars wore and selling them on the internet – hence As Seen On Screen.

Any dismay at his move was tempered by the promotion of his deputy, Nick Beighton. ASOS has been a fairytale stock, from its initial listing on Aim at 20p in 2001 to a peak of over £60 at the start of last year.That may make the current price of £30 look cheap, but it’s still over 50 times this year’s likely earnings.

Internet shopping is a crowded space nowadays, international expansion has defeated some of the best UK retailers in the past, and the departure of a long-serving CEO is nearly always a sell signal. ASOS may be a great business, but it’s surely not a great investment at this price.

Bribed with our own money

We just can’t resist a bargain. The pensioner bonds which National Savings & Investments offered as a pre-election bribe to the over-65s attracted 1.1m of us, lured by the promise of 2.8 per cent for one year or 4 per cent for three. These rates were so obviously out of line with the market that buyers were restricted to a maximum of £10,000 of each issue, but even so, 13bn silver pounds poured in.

It’s also why the bonds were excluded from the “value indicator” which tries to measure how well or badly NS&I is doing. Rather like selling pound coins for 95p each, shifting a lot of them hardly counts as adding value.

The rates on pensioner bonds are pre-tax, so buyers liable for higher rate income tax – as many buyers of the maximum amount surely are – would earn just £168 for one year, or £240 annually for locking up £10,000 for four years.

The higher £50,000 limit on premium bonds also helped NS&I to draw in a net £5.4bn in the quarter to June, saving £22m measured against other ways to finance government spending. These bonds pay 1.35 per cent annually – in prizes – so it seems we like a gamble almost as much as a bargain.

This is my FT column from last Saturday (with apologies for late publication)