Jump to content
House Price Crash Forum
Nationalist

Letter To Mervyn King

Recommended Posts

I am composing my letter to the Inflationist-in-Chief. What do you think so far? Will anyone else join me in writing a paper letter regarding today's disgracful inflation numbers?

Mervyn King

Governor

Bank of England

Threadneedle Street

London

EC2R 8AH

<Dear Sir>

I write to you as a member of the public extremely concerned about the rate of inflation in the United Kingdom. I note today’s publication of December’s CPI rate at 3.7%. This is 85% over the target of 2%. The target itself is excessively lax.

You have failed to keep CPI at or under 2% for most of the last four years. Your continual assertions that inflation will fall in the medium term are no consolation, both because you were saying the same two years ago and it has not happened, and because even if inflation did fall in the future the current inflation would be locked in and the fall in my standard of living would be permanent.

To control inflation you must increase the bank rate, probably to around 5% in the first instance. We are already seeing stagflation in the UK economy. Personally I am finding food and petrol especially expensive and my pay is not keeping up with price rises. Raising the bank rate would boost sterling and make food and oil cheaper.

You may have a covert aim of mitigating public and private debt by allowing inflation to erode its true value. This was done successfully in the 1970s but cannot work in the modern globalised world. Wages will not rise in line with price inflation. UK wages cannot rise unless the rest of the world also increases its wages. Jobs will move abroad if we attempt to raise wages unilaterally. A policy of allowing some inflation is therefore futile and will harm the UK economy for no gain. The only option is to control prices.

Other countries control inflation successfully. Inflation in France is 1.6%, in Germany 1.5%, in the USA 1.1%, in Switzerland 0.5% and in Japan 0.1%. These countries put you to shame.

Please read this letter to your colleagues on the Monetary Policy Committee and advise them that I, and increasingly the public generally, are of the opinion that you and they are failing to exercise proper stewardship of the UK economy. Unless you are able rapidly to gain control of this situation you should consider making way for others who can.

Yours faithfully,

<Signed>

Share this post


Link to post
Share on other sites

I am composing my letter to the Inflationist-in-Chief. What do you think so far? Will anyone else join me in writing a paper letter regarding today's disgracful inflation numbers?

But, but you just don't get it do you? If the muppets raise the rates HPI is over and without HPI there is no prospects for recovery and future growth based on ever increasing house prices. How are people going to buy Range Rovers unless they can release equity from their homes? Holidays in Mauritius cannot be bought out of wages you know.

HPI is the god of our nation and must be worshipped and not angered by prodding it with higher IR. If Merv hiked even a smidgen it would panic the housing market, push repossessions through the roof, kill BTL, send FTBs even further back in the queue albeit in the ST, and all sorts of other horrible things.

Bring it on!!! Hike 'em Merv and hike 'em high. :D

Edited by Realistbear

Share this post


Link to post
Share on other sites

I am composing my letter to the Inflationist-in-Chief. What do you think so far? Will anyone else join me in writing a paper letter regarding today's disgracful inflation numbers?

Not bad. I'd probably drop your point about the target being lax in the first place.

It would be good to get something organised in advance of the next 'unexpected' increase. If inflation goes 1% above target, the Governor has to write 'us' a letter. If inflation goes 2% over target, we write him a letter. Get some sort of campaign going on friendface or whatever.

Share this post


Link to post
Share on other sites

Send a copy to Andrew Sentance so he can waive it at Merv when he claims he didn't get the letter.

You could put a line in there about how increase rates will also help the prudent savers spend some money in the economy

Edited by exiges

Share this post


Link to post
Share on other sites

Send a copy to Andrew Sentance so he can waive it at Merv when he claims he didn't get the letter.

You could put a line in there about how increase rates will also help the prudent savers spend some money in the economy

I like this idea. Carrots and stick! I'll get to work on AS's letter. B)

Share this post


Link to post
Share on other sites

But an increase in inflation was bound to happen with the attempt by the global banking cartel at creating a globalised economy. The UK "economic cycle" was repeatedly cited as the reason that it would be disastrous for the UK to enter the euro, given that interest rates and exchange rates both feed in to the cost of goods.

The fact that the UK imports raw materials and food from economies which are Euro based was bound to increase inflation, particularly when considered against a backdrop of central bank manipulation of interest rates to try and harmonise them with the euro-zone. Now that the pound has touched on parity with the euro, the inevitability of price increases is locked in.

The recent hikes in fuel duty and VAT just add insult to injury. Face it, the era of using exchange rates and interest rates as a means of cheating the rest of the world is over. We must all pay higher prices because our labour simply isn't worth more than that of a Chinese, Indian or other worker, unless of course you are saying British workers and graduates are smarter and can add more value than the average Chindian.

Edited by Pindar

Share this post


Link to post
Share on other sites

Just make sure you sign it G.Soros, then he might get the message.

BTW, was it really done successfully in the 1970s? Stagflation? IMF loans?

Seems everyone was getting poorer in the 70s too, until all the tech stuff and consumer boom in the 80s came along.

Share this post


Link to post
Share on other sites

"This is 85% over the target of 2%"

percentages of percentages are meaningless imho

If the target was 0% inflation, you could claim an infinity percent overshoot....

tell that to a borrower already borrowed at "affordability" criteria that the 1% rise in rates means a 50% increase in his tracker payments.

Share this post


Link to post
Share on other sites

Here's a draft of my letter to AS...

Dr Andrew Sentance

Monetary Policy Committee

Bank of England

Threadneedle Street

London

EC2R 8AH

<Dear Sir>

I write to you as a member of the public who is gravely concerned about inflation in the UK economy. Today we have seen publication of December’s CPI rate at 3.7%. This is substantially over the 2% target. And yet this number must have been known to the members of the Monetary Policy Committee when it met last week and decided that continued inaction was appropriate.

You alone on the committee have in the past shown willingness to address the inflation embedding itself in the UK economy by voting to raise the bank rate. I am writing to applaud your resolve on this matter and to encourage you to continue voting to raise the rate until CPI falls to or below target.

For your interest I have attached a letter I have today written to the Governor of the Bank of England in which I urge him in the strongest terms to take action on inflation. His attitude to inflation seems excessively sanguine. In his quarterly letters to the Chancellor of the Exchequer regarding the CPI overshoot he refers to looking through short term factors and disregarding one-off items, but these aggregate into long term persistent inflation.

If you look at inflation forecasts issued two years ago by the Bank today’s 3.7% is off the top of the fan chart.

I think the public is losing confidence in (with the exception of yourself) the MPC’s willingness to address inflation with sufficient robustness actually to drive it down.

Yours faithfully,

<Signed>

Share this post


Link to post
Share on other sites

Ms Danny Blancheflower

Monetary Policy Committee

Bank of England

Threadneedle Street

London

EC2R 8AH

Dear Sir/Madame,

Sorry you left the MPC some time ago.

well. not really.

Yours

BL

Share this post


Link to post
Share on other sites

I am composing my letter to the Inflationist-in-Chief. What do you think so far? Will anyone else join me in writing a paper letter regarding today's disgracful inflation numbers?

Very nice but where's the bit about him understanding his back against a wall?

Share this post


Link to post
Share on other sites

Ms Danny Blancheflower

Monetary Policy Committee

Bank of England

Threadneedle Street

London

EC2R 8AH

Dear Sir/Madame,

Sorry you left the MPC some time ago.

well. not really.

Yours

BL

David Blanchflower

Dartmouth College

6106 Rockerfeller Hall

Hanover NH 03755

USA

Dear Dave

Didn't your wife turn bean flicker and go off with another woman?

Yours sincerely

BN

Share this post


Link to post
Share on other sites

Dear Merv,

I would hate for you to still be around when the vast majority of people in the UK realise you have robbed them of their wealth.

Have you heard of "seppuku"?

It was part of the samurai bushido honor code. It was used voluntarily by samurai to die with honour rather than fall into the hands of their enemies (and likely suffer torture) or as a form of capital punishment for a samurai who had committed serious offenses, or performed for other reasons that had brought shame to them. The ceremonial disembowelment, which is usually part of a more elaborate ritual and performed in front of spectators, consists of plunging a short blade, traditionally a tantō, into the abdomen and moving the blade from left to right in a slicing motion.

I suggest you pick someone with a tracker mortgage to be your kaishakunin as someone with savings may take a lot more than one swing with their sword. Indeed some of them may use slow and repeated chopping motions.

Godspeed.

HPC.

Share this post


Link to post
Share on other sites

Dear Merv,

I would hate for you to still be around when the vast majority of people in the UK realise you have robbed them of their wealth.

Have you heard of "seppuku"?

It was part of the samurai bushido honor code. It was used voluntarily by samurai to die with honour rather than fall into the hands of their enemies (and likely suffer torture) or as a form of capital punishment for a samurai who had committed serious offenses, or performed for other reasons that had brought shame to them. The ceremonial disembowelment, which is usually part of a more elaborate ritual and performed in front of spectators, consists of plunging a short blade, traditionally a tantō, into the abdomen and moving the blade from left to right in a slicing motion.

I suggest you pick someone with a tracker mortgage to be your kaishakunin as someone with savings may take a lot more than one swing with their sword. Indeed some of them may use slow and repeated chopping motions.

Godspeed.

HPC.

Dear HPC,

Thanks for your advice....I tried this before but I found I had no guts....so it didnt work.

Yours

Mervin

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.