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Thursday, January 08, 2009
Running Out of Options
So interest rates are down to 1.5%. Honestly, it's a licence to print money... Oh, that's Plan B, isn't it?
Martin Day - I agree with your conclusion. Despite what various pollsters have been saying, I'm quite sure there is presently no " feelgood" factor, only a " feel only marginally worse" one. As you say, there will be a massive sense of relief when this appalling bunch are shredded
Or we could try and fix the underlying problems by rolling back the state and allowing the enterprising sector to flourish. Oh wait, socialists are in charge.
The conservative side of this debate seems oddly one-sided. Printing money may be a very sensible thing to do. The world is presently deleveraging on a large scale -- i.e. people are selling assets to pay down debt. When this happens, money is destroyed. In order to keep inflation positive, you might have to print money.
Not all economists will agree that we therefore should embark on quantitative easing. My point is that the political debate should contain some economics. At present, is doesn't seem to contain a lot more than a GCSE history module on Weimar Germany.
What are you on about Iain? This is presumably saving you money on your no limits no floor tracker mortgage? And you will spend that saving rashly on new cars and gadgets? And this will be good for the economy?
Don't listen to that nasty George Osborne and his Saving cant. Cutting consumer spending during a recession is not actually something anyone with a clear head would advocate.
There are already various loan guarantee schemes and soft loan schemes. Extending this is not a Tory scheme even if setting it up may have been. Or was it Europe that first encouraged it ...?
I think its the heights of stupidity but then again our government isnt really our government, it becomes patently clear now that we are going to become like Zimbabwe
I have one prediction for this
The £100 and £500 pound note will start to be printed this year
Word verif Lostair should be hotair you couldnt make it up
The words Rabbits and Headlights spring to mind- too much tinkering at the edges and its all too late- the sacred cows of Income Tax, Death Duties, Corporation Tax need slaughtering and the proceeds handed back to those it was stolen from. But wait printing money will be a much better option as it means that nobody has to make the 'courageous decision' about reducing the bloated State.
Plan B may already be in operation. Back in early December I blogged that "The latest Banking Bill includes this clause: "232 Weekly return - Section 6 of the Bank Charter Act 1844 (Bank to produce weekly account) shall cease to have effect."
Section 6 of the Bank Charter Act 1844 (Bank to produce weekly accounts) requires "That an Account of the Amount of Bank of England Notes issued by the Issue Department of the Bank of England, and of Gold Coin and of Gold and Silver Bullion respectively, and of Securities in the said Issue Department, and also an Account of the Capital Stock, and the Deposits, and of the Money and Securities belonging to the said Governor and Company in the Banking Department of the Bank of England, on some Day in every Week to be fixed by the Commissioners of Stamps and Taxes, shall be transmitted by the said Governor and Company weekly to the said Commissioners in the Form prescribed in the Schedule hereto annexed marked (A.), and shall be published...."
Now why would the Government want to stop the publishing of weekly accounts of how much money has been printed in any week? Can you imagine the smell of banknote printing presses running red-hot? Can you spell hyper-inflation? ZaNuLabour may be well described."
Chris Paul flag waiving from the prow as the rusty red old steamer sinks...
Printing money dilutes our wages and our savings. As Guthrum says, the "first dibbs" taxes - Income, Inheritance, Capital Gains have to go. Tax people when they spend. If they save, it is invested (whatever that low energy bulb Anasole says). Cut public spending not by a paltry 1% as Dave is suggesting, but more like 20%+.
Funny how the public (outside of the public sector) are making and taking sacrifices yet the spending and taxing by the government goes on unabated. The Client State - or is that "tumour"? - must be fed at all costs, eh.
A cut in VAT? Stupid - all it does is make imports as well as domestic production cheaper. Better to have cut corporation tax and enabled local products to be cheaper here and abroad.
No, all this mismanagement reminds me of Austin Powers on the bed with Liz Hurley "Oh, I've fallen down! Oh, I've done it again..." as the errors build up, a 'case' for entry to the Euro grows.
I am convinced Gordon wants that. He is on a promise. Head of the ECB, perhaps? Cosy sinecure at the IMF?
What was last month's scare story? Something about exchange rates?
Well, yesterday, before the rate cut, Reuters' commentary included gems like: Some market participants said sterling was also supported by demand related to speculation for increased foreign investment, on the view that a weak currency, cheap shares and tumbling real estate prices were raising the appeal of corporate investments in the UK from overseas.
Analysts said sterling was supported after recovering from heavy losses, partly on the view that UK interest rate cuts and government stimulus plans will help the economy recover from a recession faster than in the euro zone.
Today, Reuters' summary continues in the same vein: Sterling rose to three-week highs against the dollar and euro on Thursday after the Bank of England cut key interest rates as widely anticipated, but at the low end of expectations.
Meanwhile, I'm still trying to discover what the Tory economic policy is. As far as I see, it involves general urination (see above, for hither Guido's "window-lickers" seem to have migrated) and a wish to exhume the late, and generally-unlamented Montague Norman. Oh, and dictating the BoE's interest-rate policy (so, no "free market" nonsense there, then).
1/2% cut. whoo hoo I shall be checking my postbox eagerly every morning for the confirmation that AMEX have lowered their outstanding balance rate to 31.5% APR.
Probably be well after the banks have cut their savings rates though.
This isn't plan B. Rather it is a continuation of Brown's easy money economics by other means. Cheap money piped into the economy via the state rather than the banks. But instead of taking the pain all we are doing is building in a further feedback loop. The legacy of this policy will be to return us to little more a rural economy, as our friends in Iceland are just finding out.
Not a Sheep is quite correct. The amount of money etc in circulation and govt debt must be published as a matter of transparency. Hiding this info will allow the government to manipulate the economy. Why has the Conservative party not picked this up? Clause 232 of the Banking Bill should be removed.
18 comments:
Martin Day - I agree with your conclusion. Despite what various pollsters have been saying, I'm quite sure there is presently no " feelgood" factor, only a " feel only marginally worse" one.
As you say, there will be a massive sense of relief when this appalling bunch are shredded
Or we could try and fix the underlying problems by rolling back the state and allowing the enterprising sector to flourish. Oh wait, socialists are in charge.
The plan is to make those with Savings spend them and then get into debt like everyone else.
Then everyone will be enslaved by the banks and owned by the state.
Socialism will, at long last, have been achieved. The eternity of misery and oppression can begin.
PS How long before savings are called cash hoarding by ZanuLabour ?
I believe this is what is known colloquially as 'squeaky bum time'.
The conservative side of this debate seems oddly one-sided. Printing money may be a very sensible thing to do. The world is presently deleveraging on a large scale -- i.e. people are selling assets to pay down debt. When this happens, money is destroyed. In order to keep inflation positive, you might have to print money.
Not all economists will agree that we therefore should embark on quantitative easing. My point is that the political debate should contain some economics. At present, is doesn't seem to contain a lot more than a GCSE history module on Weimar Germany.
What are you on about Iain? This is presumably saving you money on your no limits no floor tracker mortgage? And you will spend that saving rashly on new cars and gadgets? And this will be good for the economy?
Don't listen to that nasty George Osborne and his Saving cant. Cutting consumer spending during a recession is not actually something anyone with a clear head would advocate.
There are already various loan guarantee schemes and soft loan schemes. Extending this is not a Tory scheme even if setting it up may have been. Or was it Europe that first encouraged it ...?
Quantitative easing didnt work in Japan
I think its the heights of stupidity but then again our government isnt really our government, it becomes patently clear now that we are going to become like Zimbabwe
I have one prediction for this
The £100 and £500 pound note will start to be printed this year
Word verif Lostair should be hotair you couldnt make it up
The words Rabbits and Headlights spring to mind- too much tinkering at the edges and its all too late- the sacred cows of Income Tax, Death Duties, Corporation Tax need slaughtering and the proceeds handed back to those it was stolen from. But wait printing money will be a much better option as it means that nobody has to make the 'courageous decision' about reducing the bloated State.
Plan B may already be in operation. Back in early December I blogged that "The latest Banking Bill includes this clause: "232 Weekly return - Section 6 of the Bank Charter Act 1844 (Bank to produce weekly account) shall cease to have effect."
Section 6 of the Bank Charter Act 1844 (Bank to produce weekly accounts) requires "That an Account of the Amount of Bank of England Notes issued by the Issue Department of the Bank of England, and of Gold Coin and of Gold and Silver Bullion respectively, and of Securities in the said Issue Department, and also an Account of the Capital Stock, and the Deposits, and of the Money and Securities belonging to the said Governor and Company in the Banking Department of the Bank of England, on some Day in every Week to be fixed by the Commissioners of Stamps and Taxes, shall be transmitted by the said Governor and Company weekly to the said Commissioners in the Form prescribed in the Schedule hereto annexed marked (A.), and shall be published...."
Now why would the Government want to stop the publishing of weekly accounts of how much money has been printed in any week? Can you imagine the smell of banknote printing presses running red-hot? Can you spell hyper-inflation? ZaNuLabour may be well described."
I believe Guido had this on his blog as well.
I have it on mine that it is Zanulabour
Chris Paul flag waiving from the prow as the rusty red old steamer sinks...
Printing money dilutes our wages and our savings. As Guthrum says, the "first dibbs" taxes - Income, Inheritance, Capital Gains have to go. Tax people when they spend. If they save, it is invested (whatever that low energy bulb Anasole says). Cut public spending not by a paltry 1% as Dave is suggesting, but more like 20%+.
Funny how the public (outside of the public sector) are making and taking sacrifices yet the spending and taxing by the government goes on unabated. The Client State - or is that "tumour"? - must be
fed at all costs, eh.
A cut in VAT? Stupid - all it does is make imports as well as domestic production cheaper. Better to have cut corporation tax and enabled local products to be cheaper here and abroad.
No, all this mismanagement reminds me of Austin Powers on the bed with Liz Hurley "Oh, I've fallen down! Oh, I've done it again..." as the errors build up, a 'case' for entry to the Euro grows.
I am convinced Gordon wants that. He is on a promise. Head of the ECB, perhaps? Cosy sinecure at the IMF?
What was last month's scare story? Something about exchange rates?
Well, yesterday, before the rate cut, Reuters' commentary included gems like:
Some market participants said sterling was also supported by demand related to speculation for increased foreign investment, on the view that a weak currency, cheap shares and tumbling real estate prices were raising the appeal of corporate investments in the UK from overseas.
Analysts said sterling was supported after recovering from heavy losses, partly on the view that UK interest rate cuts and government stimulus plans will help the economy recover from a recession faster than in the euro zone.
Today, Reuters' summary continues in the same vein:
Sterling rose to three-week highs against the dollar and euro on Thursday after the Bank of England cut key interest rates as widely anticipated, but at the low end of expectations.
Meanwhile, I'm still trying to discover what the Tory economic policy is. As far as I see, it involves general urination (see above, for hither Guido's "window-lickers" seem to have migrated) and a wish to exhume the late, and generally-unlamented Montague Norman. Oh, and dictating the BoE's interest-rate policy (so, no "free market" nonsense there, then).
1/2% cut. whoo hoo I shall be checking my postbox eagerly every morning for the confirmation that AMEX have lowered their outstanding balance rate to 31.5% APR.
Probably be well after the banks have cut their savings rates though.
This isn't plan B. Rather it is a continuation of Brown's easy money economics by other means. Cheap money piped into the economy via the state rather than the banks. But instead of taking the pain all we are doing is building in a further feedback loop. The legacy of this policy will be to return us to little more a rural economy, as our friends in Iceland are just finding out.
Not a Sheep is quite correct. The amount of money etc in circulation and govt debt must be published as a matter of transparency. Hiding this info will allow the government to manipulate the economy. Why has the Conservative party not picked this up? Clause 232 of the Banking Bill should be removed.
Take a look at the latest accounts:
http://www.gazettes-online.co.uk/issues/58937/pages/20438
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