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Scrap Boe Says Adam Smith Institute -- Merged

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Scrap the BoE says Adam Smith Institute

http://www.telegraph.co.uk/finance/bank-of-england/12092171/Scrap-Bank-of-Englands-powers-after-century-of-boom-and-bust-says-think-tank.html

After a century of boom and bust, and 'free banking' system before was far more stable.

Well Haldane said he can't wait to be replaced by a bot.

Let the algo's rule!

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Lets try to write the new algorithm for them.

x = total wealth

y = top 1% and the bankers

z = the 'little people'.

start loop

z - 1,

y + 1

repeat loop until

x = y and z = 0

Edited by sikejsudjek

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I like the BBC Business news feed's take on this story

"Top story in the Telegraph's business section is a report from the Adam Smith Institute saying it's time to abolish the Bank of England's interest rate-setting Monetary Policy Committee, because it's based on a regime that has been responsible for a century of boom and bust.

The institute suggests other ways of conducting monetary policy such as doing it automatically based on strict rules, or letting private banks control the money supply.

Because private banks never get anything wrong..."

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The shadow banking system and the international network of tax avoidance jurisdictions (established largely by representatives of the BoE) are already beyond the reach of any regulatory authority.

Adam Smith's Invisible Hand is a putative mechanism for restoring market prices to 'fair value' . It can work only where price equilibrium a. exists b. is stable. Such conditions are never found in real markets.

Edited by zugzwang

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I like the BBC Business news feed's take on this story

"Top story in the Telegraph's business section is a report from the Adam Smith Institute saying it's time to abolish the Bank of England's interest rate-setting Monetary Policy Committee, because it's based on a regime that has been responsible for a century of boom and bust.

The institute suggests other ways of conducting monetary policy such as doing it automatically based on strict rules, or letting private banks control the money supply.

Because private banks never get anything wrong..."

MPC has only had rate-setting powers since the late 20thC.

As I recall bank failures pre-Thatcher were relatively rare, ie before Brown gave the FSA responsibility.

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Andy Haldane, the Bank’s chief economist, has said that he "dreams of the day when I am made redundant by a robot",

referring to the possibility that the MPC could be replaced by a simple rule for monetary policy.

However, he argued that “at times of real change, rules tend to underperform… [and] give the wrong steer at the most critical moments”. He concluded that, for now, “humans still have a big role”.

The point is that there wouldn't be so many "critical moments" created by the banking system - if necessary the rules could be altered as and when.

It would also deter the effect of central banks implementing policies that central banks had already admitted didn't work and had failed (ZIRP/QE) - didn't work and had failed except to line their own pockets.

Edited by billybong

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Are they proposing the reintroduction of slavery, the abolition of universal suffrage and sending children up chiminees too?

Doffs cap, tugs forelock

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I like the BBC Business news feed's take on this story

"Top story in the Telegraph's business section is a report from the Adam Smith Institute saying it's time to abolish the Bank of England's interest rate-setting Monetary Policy Committee, because it's based on a regime that has been responsible for a century of boom and bust.

The institute suggests other ways of conducting monetary policy such as doing it automatically based on strict rules, or letting private banks control the money supply.

Because private banks never get anything wrong..."

It would be sensational if the mkt could set rates. It already does for everything bar the overnight rate to short term.

#letmktsetrates as I've been saying on Twitter for a few years

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MPC has only had rate-setting powers since the late 20thC.

As I recall bank failures pre-Thatcher were relatively rare, ie before Brown gave the FSA responsibility.

ie while we had Glass -Steagall's UK equivalent. Thatcher deregulated but would NEVER have allowed the banks to run riot as Brown/Blair did

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ie while we had Glass -Steagall's UK equivalent. Thatcher deregulated but would NEVER have allowed the banks to run riot as Brown/Blair did

Perhaps, but it's worth recalling that prior to 2008 the only criticism her successors made of Brown/Blair was that they were over regulating the banks.

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Are they proposing the reintroduction of slavery, the abolition of universal suffrage and sending children up chiminees too?

Doffs cap, tugs forelock

I don't quite see the connection between the two.

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Perhaps, but it's worth recalling that prior to 2008 the only criticism her successors made of Brown/Blair was that they were over regulating the banks.

They also said the banks were badly regulated

http://www.ft.com/cms/s/0/e0fbc142-388c-11db-ae2c-0000779e2340.html#axzz3wwdmMWNM

Mr Redwood argued the financial services industry was "over-regulated and badly regulated, particularly the former"

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Perhaps, but it's worth recalling that prior to 2008 the only criticism her successors made of Brown/Blair was that they were over regulating the banks.

Those successors were Thatcher's enemies. Tell you anything?

Edited:

OK I did not know it was Redwood aswel.

Did he mean over regulated or the fact that the banks knew that they'd be bailed out when the f'd up?

They needn't be regulated. Just not bailed out or legally protected for every corrupt thing they do.

Edited by Killer Bunny

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He can't do join the dots so don't expect too much of him

Good insult. I guess you think the BOE are wonderful and only people who want slavery back have problems with it. Are you posting from some parallel universe where the BOE didn't let the RBS etc go heavily in debt etc or on drugs? Or are you Gordon Brown? (I apologize for such rudeness)

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Bank of England made independent with Labour's 1998 Bank Act.

Cue the start of the housing bubble, to trap more people, in more debt, over longer mortgage terms for the long term benefit of bankers. The clue is in their name.

An unelected secret organisation with more power than our elected politicians.

"Permit me to issue and control the money of a nation, and I care not who makes its laws!"

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Indeed, having a single BoE rate is anti-competitive, and using it as a basis for rates in the market would be condemned as a cartel in any other walk of life. Let the market set rates, and just control money supply. Then if credit rises, that pushes interest rates up, thus avoiding a bubble (which is exactly what was missing in the years of Big HPI after Brown abandoned Prudence). Vice versa if credit contracts.

I'm sure I've said that before, including probably on HPC. Good to see someone catching up.

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