If we had an economy based on something with a steady value rather than confidence, and the BOE couldn't fiddle inflation would we be in trouble? Why did we sell off gold in the first place, was it purely for short term gain?

It seems bubbles form when the good times are prolonged by fiddling, causing a bigger crash.

Could someone please explain to a newbie why the BOE is such a good plan?

Here we go, two three four,
Gordon is a moron, Goooordon is a moron, Gordon is a moron, Gordon is a moron.

I believe they came up with something about balancing the portfolio. We are now so balanced we are the third largest holder of US treasury debt after Japan and China and getting our arses kicked because of it. Giving away my gold at record low prices to fund American consumption was a smart idea.

"Goodhart's law".
This is the theory named after the economist Charles Goodhart, which states that once an economic indicator is made a target of public policy it becomes increasingly devalued and eventually irrelevant or even counter-productive.

The problem is if you set any target it will get undermined and become pointless.

ollie I am afraid you are under the missconception that the government actually cares even a little bit. I used to think they cared a little years ago but my have been wide open for a long time now. When that iron curtain gets lifted you start to understand that everything a politician says is BS and for personal gain only- whether it's protecting themselves, protecting others, false promises or downright lies.