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Merv In Front Of Select Committee

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Warren Buffet once said "Only when the tide goes out do you discover who's been swimming naked."

Altogther now:

"The King is in the altogether

But altogether the altogether

He's altogether as naked as the day that he was born.

The King is in the altogether

But altogether the altogether

It's altogether the very least the King has ever worn."

Danny Kaye, 1952.

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http://www.automated...ndue-volatility

Contingency Planning For Greek Default

In the early part of his evidence to the Treasury Select Committee, King was

grilled about the likelihood of a Greek default. He refused to be drawn on the

probability of a default, but said it was high enough for the BOE to have put in

place contingency plans.

"I personally don't ascribe a risk to Greek default. It is not for me to do,"

he said. He noted that the BOE's Financial Stability Review assessment showed

the market "ascribes a probability of 80% to some aspect of default.""The more

important thing (than guessing how likely a Greek default is) is to try and

tackle the underlying problems," King said. With the market placing a high

probability on default that is enough "for us to think carefully about

contingency plans and the consequences of a default."

The BOE head said the current problem "goes much wider than just the euro

area."

He said the crisis stemmed from unsustainable national borrowing patterns

before the financial crisis and "What the crisis revealed .... was this was

unsustainable and couldn't carry on.""If you have a very large net external debt

and you want to continue to service that debt, the only way to do it is to run

trade surpluses," King said.

This lesson of economics "applies to us. But it particularly applies to the

euro area and it is up to them to find a way through it."

King said one of the message he was delivering when he presented the

Financial Stability Review last Friday was that liquidity support, to Greece and

elsewhere, was just a way of buying time.

"Providing liquidity support may buy time to put in place a long-term

strategy, under which this competitiveness can be regained. So far the time that

has been bought by the provision of liquidity has not really been used to put in

place programmes that can guarantee significant improvement and

competitiveness," he said.

"Buying time is not sufficient, that time has to be used," he added. "I don't

think that buying time appears attractive very often because the immediate

crisis appears to go away. Youl get to bed earlier, you'll relax more. But in

fact the underlying problems have not changed, the crisis comes back in more

severe forms and that has been the case going through the past 18 months in

trying to deal with Greece, Portugal and Ireland and indeed the problems for the

euro area as a whole," he said.

So, he's not going to comment on whether or not Greece is should, or will default.

Instead we should get ourselves ready for when they do, and he thinks this should be soon.

Heh.

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King is today in front of the committee, on most days, he stands firmly behind them, thrusting and dribbling.

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I don't think that buying time appears attractive very often because the immediate

crisis appears to go away.

Not like when he predicts 2% inflation in 2 years time then.

Edited by billybong

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"What the crisis revealed .... was this was unsustainable and couldn't carry on."

The mentality of staggering from one crisis to another.

"If you have a very large net external debt and you want to continue to service that debt, the only way to do it is to run

trade surpluses," King said.

Of course that astonishing fact was only revealed after the crisis.

Actually it all reads bettter and starts to makes more sense in Fonejacker's voice.

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"I don't think that buying time appears attractive very often because the immediate crisis appears to go away. Youl get to bed earlier, you'll relax more. But in fact the underlying problems have not changed, the crisis comes back in more severe forms

That would be why the UK is printing money and has a base rate of 0.5% to try support a house price bubble?

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Guest sillybear2

The King is in front of the select committee. There is a plan for a Greek default though no details

crayola-xpress1.jpg

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Did the MPs ask him questions like:

Aren't house prices too high? Isn't prolonging the property bubble with ZIRP just delaying (and possibly worsening) the inevitable pain?

How is Britain meant to compete with the rest of the world with a cost of living that is already high, and rising?

More likely they just expressed their concerns regarding inflation, to which Merv replied he is also concerned so will remain vigilant over the medium term while supporting the fragile recovery, and then the meeting was concluded and they all went home knowing that they had executed a brilliant bit of governance and earned every penny of their taxpayer-funded salary and pension today.

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Keiser wants the #### waterboarded.

http://rt.com/programs/keiser-report/keiser-report-episode-159/

About 8-9 minutes in.

£336 billion the British banks have in Greek debt, according to Keiser

It's some thing that I have been questioning for a long time. Can you really create wealth out of thin air like our city guy's are suppose to?

To my mind all wealth that is created from move zero's and one's around a hard drive is Ponzi wealth and is bound to collapse at some point. Shame Britain makes most of it's money out of financial services.

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<br />His Wimbledon tickets must not have come through then.......<br />

serment du jeu de paume

"The Tennis Court Oath was a pivotal event during the first days of the French Revolution."

Note the date and when French/UK tennis championships take place!

On the morning of 20 June, the deputies were shocked to discover that the chamber door was locked and guarded by soldiers. Immediately fearing the worst and anxious that a royal attack by King Louis XVI was imminent, the deputies congregated in a nearby indoor real tennis court where they took a solemn collective oath "not to separate, and to reassemble wherever circumstances require, until the constitution of the kingdom is established"

It later transpired that the most probable reason why the hall was closed was that the royal household was still in mourning the death of the Dauphin (the king's oldest son) two weeks earlier; ordinarily, political matters could not be conducted until the King had emerged from mourning.

The oath is therefore a contentious point in French political history, since pro-monarchists then and now characterize it as a duplicitous and hysterical over-reaction which deliberately made capital out of a private tragedy in the royal family.

The Oath signified the first time that French citizens formally stood in opposition to Louis XVI, and the National Assembly's refusal to back down forced the king to make concessions. The Oath also inspired a wide variety of revolutionary activity in the months afterwards, ranging from rioting across the French countryside to renewed calls for a written French constitution. Likewise, it reinforced the Assembly's strength and forced the King to formally request that voting occur based on head, not order.

https://secure.wikimedia.org/wikipedia/en/wiki/Tennis_Court_Oath

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Shame Britain makes most of it's money out of financial services.

I don't think Britain makes any money out of financial services overall.

Bill Bonner tells a good story about shoe factories in the dying days of the USSR which were so terrible that they took rubber and leather and then processed them into shoes which were less valuable than the rubber and leather which went into them. These factories were not just producing a low yield, they were actually destroying value.

Now take Britain's financial services "industry". It uses its political influence to encourage minimal regulatory oversight and lax monetary policy, and then it takes whatever money it can lay its hands on and invests it in Greek government bonds (which will never be repaid) or the construction of huge estates in the middle of the Irish countryside, or lends it to people in Britain who cannot afford to pay it back (LIAR LOANS and credit card junkies), and then it pays the financiers making these investments better than almost anybody else in the country.

These are not just silly games, they are probably destroying wealth by putting real resources like steel and fuel and labour into activities which will never even return the original investment, let alone turn a profit.

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It's quite incredible that King is so far removed from reality that he can criticize Greece for financial mismanagement while he carries on pushing the UK towards the abyss.

He doesn't believe in buying time?? No question then of emergency low interest rates, QE and banking bailouts in UK? And obviously he takes no responsibility for the loose lending, UK sub-prime boom and the falsification of inflation figures. Can he be made to face any criminal charges?

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http://www.dailymail.co.uk/news/article-2009374/No-rate-rises-unemployment-drops-economy-grows-says-Mervyn-King.html

Rate rise would need a 'stronger' economy, says Bank of England chief

Disagreements at bank on how to bolster the economy

The Governor of the Bank of England Sir Mervyn King has suggested that interest rates would not rise until it was certain the economy was growing and there had been a drop in unemployment.

He was giving evidence to MPs at the Treasury Select Committee along with other members of the bank.

So interest rates aren't going to go up until unemployment gets better, but inflation destroys jobs...

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Did the MPs ask him questions like:

Aren't house prices too high? Isn't prolonging the property bubble with ZIRP just delaying (and possibly worsening) the inevitable pain?

How is Britain meant to compete with the rest of the world with a cost of living that is already high, and rising?

(...)

Exactly. King himself said: "But in fact the underlying problems have not changed, the crisis comes back in more severe forms and that has been the case going through the past 18 months in trying to deal with Greece, Portugal and Ireland and indeed the problems for the euro area as a whole," he said."

Well... our "underlying problems have not changed" too! You bleeding moron!

I guess King wants ours to change very very slowly... :rolleyes:

I don't think Britain makes any money out of financial services overall.

Bill Bonner tells a good story about shoe factories in the dying days of the USSR which were so terrible that they took rubber and leather and then processed them into shoes which were less valuable than the rubber and leather which went into them. These factories were not just producing a low yield, they were actually destroying value.

Now take Britain's financial services "industry". It uses its political influence to encourage minimal regulatory oversight and lax monetary policy, and then it takes whatever money it can lay its hands on and invests it in Greek government bonds (which will never be repaid) or the construction of huge estates in the middle of the Irish countryside, or lends it to people in Britain who cannot afford to pay it back (LIAR LOANS and credit card junkies), and then it pays the financiers making these investments better than almost anybody else in the country.

These are not just silly games, they are probably destroying wealth by putting real resources like steel and fuel and labour into activities which will never even return the original investment, let alone turn a profit.

Good post.

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It's quite incredible that King is so far removed from reality that he can criticize Greece for financial mismanagement while he carries on pushing the UK towards the abyss.

He doesn't believe in buying time?? No question then of emergency low interest rates, QE and banking bailouts in UK? And obviously he takes no responsibility for the loose lending, UK sub-prime boom and the falsification of inflation figures. Can he be made to face any criminal charges?

He's a very bright man, so I'd imagine he's well aware of the hypocrisy. Either he doesn't care or he considers himself to be doing the best he can in a difficult situation.

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He's a very bright man, so I'd imagine he's well aware of the hypocrisy. Either he doesn't care or he considers himself to be doing the best he can in a difficult situation.

True. King has sent some quite direct and public messages to Union bosses, like: "If wages start to rise I'll be forced to raise the base rate / mortgages will go up". And it seems to be working.

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He's a very bright man, so I'd imagine he's well aware of the hypocrisy. Either he doesn't care or he considers himself to be doing the best he can in a difficult situation.

Or it's not what he said. Here's what he said:

"Providing liquidity support may buy time to put in place a long-term

strategy, under which this competitiveness can be regained. So far the time that

has been bought by the provision of liquidity has not really been used to put in

place programmes that can guarantee significant improvement and

competitiveness," he said.

"Buying time is not sufficient, that time has to be used," he added

Tricky for the Greeks when most of their primary deficit is paying debt interest and no matter what assets they sell they're still in a fixed exchange rates system and have their monetary policy, and now fiscal policy (effectively) handed to them by Germany/Frankfurt.

UK has devalued (rapidly), QE'd (probably not yet enough), is recapping banks and has at least some sort of deficit reduction plan (though it might be better if Osborne focussed more on those who had benefitted from the transfers via the increased public debt - i.e. private sector troughers, and landowners).

You'd have to be pretty thick to think we're in the same situation as Greece (or a denied in the wool 'free market' bonkers economystic - of which there is excess supply)

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snip

You'd have to be pretty thick to think we're in the same situation as Greece (or a denied in the wool 'free market' bonkers economystic - of which there is excess supply)

does the translation of "i am overspending" make a difference to the fact?

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does the translation of "i am overspending" make a difference to the fact?

If you mean that public sector borrowing must mean excess money flows to the private sector then I agree with you. Where else could it be going?

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  • 284 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%



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