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Mark Carney- in 9 years as a central banker, has he ever raised an interest rate ??

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Hi there, am new to this forum, but as this is an internationally recognized website perhaps we have some Canadians as well as Brits who could confirm the situation for me: Mark Carney became head of the Bank of Canada in February of 2008, and became head of the Bank of England in July of 2013.

Here's my question: My understanding is that during that entire professional tenure as a Central Banker, he has never, not on one single occasion, raised an interest rate, in either country.

He has either held rates, or cut, cut and cut. Has there ever been a previous example of a Central banker hanging out his shingle to any prospective government so strongly ???

 I'm amazed that Malcolm Turnbull, presiding over a massive Australian property bubble, did not recently appoint Carney in place of the present guy, Lowe. Carney's unspoken value proposition would seem to be: No matter the capital misallocation, no matter the resulting inefficiency or growing inequality, no matter the fundamental structural risks my policies entail, I WILL keep your property bubble inflated.  Hire me !! Who agrees ?

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3 hours ago, Society of fools said:

Hi there, am new to this forum, but as this is an internationally recognized website perhaps we have some Canadians as well as Brits who could confirm the situation for me: Mark Carney became head of the Bank of Canada in February of 2008, and became head of the Bank of England in July of 2013.

Here's my question: My understanding is that during that entire professional tenure as a Central Banker, he has never, not on one single occasion, raised an interest rate, in either country.

He has either held rates, or cut, cut and cut. Has there ever been a previous example of a Central banker hanging out his shingle to any prospective government so strongly ???

 I'm amazed that Malcolm Turnbull, presiding over a massive Australian property bubble, did not recently appoint Carney in place of the present guy, Lowe. Carney's unspoken value proposition would seem to be: No matter the capital misallocation, no matter the resulting inefficiency or growing inequality, no matter the fundamental structural risks my policies entail, I WILL keep your property bubble inflated.  Hire me !! Who agrees ?

Why else do you Osborne employed him. If the Fed raise in December he'll start forward guidance again to reassure.

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Thanks for that excellent article S1.

 

The damage caused through excessively loose monetary policy was clearly on the wall for Canada years ago, and Carney was as blindly oblivious to the damage he was inflicting then as he is now in the UK.

I thought this article on Bloomberg today was instructive.

It might be 3 years after Carney left Canada, but this fragile and potential disastrous economic situation is overwhelmingly his legacy.

http://www.bloomberg.com/news/articles/2016-10-24/canada-s-swelling-debt-pile-raises-questions-over-future-growth

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1 hour ago, canbuywontbuy said:

Are we assuming here that Carney is doing his best to look after the man on the street? <insert uncontrollable laughter>

Once GS employee always a GS man. No ex GS staff should ever be allowed roles like this. Their only focus is enriching the financial sector and that at the detriment of everyone else if needs be. The fact that low rates do cause issues for that sector shows me that higher rates would cause them even more issues because of their massive NPL book.

He'll stay in place for as long as he can and when and if inflation rises to levels see in 2011 he'll warn that it's causing damage to the economy which raising rates would exacerbate. Any reason to use low rates to hide the sectors dirty secrets.

 

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7 hours ago, Blod said:

 

He'll stay in place for as long as he can and when and if inflation rises to levels see in 2011 he'll warn that it's causing damage to the economy which raising rates would exacerbate. Any reason to use low rates to hide the sectors dirty secrets.

 

If there's one thing about Central Banker speak speak that makes me howl with derisory laughter its this phrase " Look through" such things as high inflation that is ripping along nicely, on the grounds that such high inflation is just a temporary phenomenon that would disappear with time. ( Well certainly in 12 months time anyway when old statistics drop off the records).

Can't blame Carney alone for this one though, Mervyn King was the same back when inflation was flying at 5+% for months on end.

We'll just "look through it" King said. As if by the use of creative banker phraseology the high inflation- and the complete sidelining the Bank of England's statutory remit to keep inflation at the 2% to 3 % range- could simply disappear from view. Or not actually be felt by the public.

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I believe Carney has overseen a very significant change in the corporate structure of the boe, which for all i know may be necessary and prescient, and the reason he's there.

 

That prompts me to wonder. Is his preference for super low rates merely a means to keep the background economy sufficiently stable to allow him to press ahead with his boe restructurings without distractions?

Edited by Si1

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26 minutes ago, Si1 said:

I believe Carney has overseen a very significant change in the corporate structure of the boe, which for all i know may be necessary and prescient, and the reason he's there.

 

That prompts me to wonder. Is his preference for super low rates merely a means to keep the background economy sufficiently stable to allow him to press ahead with his boe restructurings without distractions?

is this a joke? ...so fact near zero interest rates inflate asset values and makes the rich richer has nothing to do with it? Hhmmm?

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2 minutes ago, Wayward said:

is this a joke? ...so fact near zero interest rates inflate asset values and makes the rich richer has nothing to do with it? Hhmmm?

Indeed, could be that too. Could suit Carney in several ways.

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On 26/10/2016 at 4:01 PM, Society of fools said:

If there's one thing about Central Banker speak speak that makes me howl with derisory laughter its this phrase " Look through" such things as high inflation that is ripping along nicely, on the grounds that such high inflation is just a temporary phenomenon that would disappear with time. ( Well certainly in 12 months time anyway when old statistics drop off the records).

Can't blame Carney alone for this one though, Mervyn King was the same back when inflation was flying at 5+% for months on end.

We'll just "look through it" King said. As if by the use of creative banker phraseology the high inflation- and the complete sidelining the Bank of England's statutory remit to keep inflation at the 2% to 3 % range- could simply disappear from view. Or not actually be felt by the public.

The 'paradox' of stagflation. Keynesian economists and central bankers have no explanation for it since neither energy costs or debt are included as variables in their economic models. The period of looking through the cpi numbers of 3+% occurred between 2011 and 2014 when the price of brent crude was north of £60bbl.

 

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On 26/10/2016 at 4:01 PM, Society of fools said:

If there's one thing about Central Banker speak speak that makes me howl with derisory laughter its this phrase " Look through" such things as high inflation that is ripping along nicely, on the grounds that such high inflation is just a temporary phenomenon that would disappear with time. ( Well certainly in 12 months time anyway when old statistics drop off the records).

Yeah it makes me laugh as well. The only time this joker is going to raise rates is when we, the plebs get a pay rise. Thanks you f****** great c*** m****f****** gob ***** w*****!

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8 hours ago, satch said:

I suspect Carney has in his mind something like the old IBM adage; you can't get sacked if you buy IBM. But here you can't get sacked if you make the 1% rich and that can be achieved by lower and lower interest rates coupled with lots of QE. And it would appear once ensnared by lower rates you can never escape as the subsequent debt is too high so Canada now has rates down from even Carney's levels, same as here and soon to be negative if Carney has his way.

Great post.

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11 hours ago, satch said:

I suspect Carney has in his mind something like the old IBM adage; you can't get sacked if you buy IBM. But here you can't get sacked if you make the 1% rich and that can be achieved by lower and lower interest rates coupled with lots of QE. And it would appear once ensnared by lower rates you can never escape as the subsequent debt is too high so Canada now has rates down from even Carney's levels, same as here and soon to be negative if Carney has his way.

Excellent post satch, but its not just the 1%. There is now a very significant political constituency of people who in the 80's and 90's would have been on what might be classified as    " solid/steady lower middle class": people such as school teachers, welders, lower level IT technicians, even data entry clerks, who, by virtue of their lower income constraints, would never have had the chance to borrow vast sums of money to build up a property portfolio and even have one extra investment property besides of the house that they lived in.

Now, thanks to Carney, and his ilk, they can.

And the loyalty such people have to the central bankers who created such an opportunity- and there are thousands of them - is palpable. I remember meeting such a Canadian- a school teacher- in Cyrus on holiday last year. She was a teacher, and, since she told me she taught high school economics in Vancouver, I asked her very derisorily the very same question I ask here: " Has Mark Carney ever raised an interest rate in his professional life ? "

She didn't appreciate the sentiment at all. Besides of the house that she lived in, she also had two condos in downtown Vancouver, and her response was basically to cast central bankers like Carney as modern day alchemists, utter geniuses, who gave people like her opportunities that they never could have dreamed of in a former era. Carney, she said, along with Chinese property investors encouraged by the Canadian government, had made her rich. Genuinely wealthy. And she would not hear a word against him.

So when a government wants to ***** the property bubble by raising interest rates, its not just the super rich they have to contend with, its thousands of extremely highly indebted middle class citizens along with them.

 

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From this Bloomberg article citing Carney's apparent desire to take his bat and ball and leave the pitch in a raging huff, it seems that Malcolm Turnbull definitely missed a gold-plated chance a couple of months back when Stevens retired from the Reserve Bank of Australia and to have replaced with this ********* clown.

I mean, just think about it, the Australian housing situation is tailor-made for Carney: average house prices in Sydney are more than twelve times average earnings, but interest rates are still, what ? 1.75 % or so ? Way way too high compared to the United Kingdom and Canada.

Carney could have spent the next few years cutting and holding, until the whole thing blew up in a fashion that makes the 2008/2009 situation look like a mild dress-rehearsal. And serious journalists in Bloomberg think that many in the UK would regret his departure.

I'd tell him not to let the bloody door hit him on the way out.....

https://www.bloomberg.com/view/articles/2016-10-28/bank-of-england-s-mark-carney-prepares-his-own-brexit

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National Post: The ‘only adult in the room’: Mark Carney prepares his own Brexit after referendum debacle. http://google.com/newsstand/s/CBIwuIzTmDA

 

Danny blanchflower has defended Carney, whilst a Canadian financier has described him as the Ringo Starr of central banking, guffaw

 

Events seem to be moving quickly, that article also shows strong suggestions that Carney may resign soon. And some are suggesting Rees-Mogg as successor.

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53 minutes ago, Si1 said:

National Post: The ‘only adult in the room’: Mark Carney prepares his own Brexit after referendum debacle. http://google.com/newsstand/s/CBIwuIzTmDA

 

Danny blanchflower has defended Carney, whilst a Canadian financier has described him as the Ringo Starr of central banking, guffaw

 

Events seem to be moving quickly, that article also shows strong suggestions that Carney may resign soon. And some are suggesting Rees-Mogg as successor.

My bold.

A terrible racket?

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1 hour ago, Si1 said:

National Post: The ‘only adult in the room’: Mark Carney prepares his own Brexit after referendum debacle. http://google.com/newsstand/s/CBIwuIzTmDA

 

Danny blanchflower has defended Carney, whilst a Canadian financier has described him as the Ringo Starr of central banking, guffaw

 

Events seem to be moving quickly, that article also shows strong suggestions that Carney may resign soon. And some are suggesting Rees-Mogg as successor.

If this were to happen, I would say the UK is really serious about sorting itself out for the future. That would be a real turning point for the world, which is why I doubt it will happen :(

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20 hours ago, Society of fools said:

Carney, she said, along with Chinese property investors encouraged by the Canadian government, had made her rich. Genuinely wealthy. And she would not hear a word against him.

It's enough to turn your stomach. I'm increasingly of the opinion that I want to see this current economic system burn, and people like this with it. We'll all be equally fecked, of course, but it'll be worth it to think that something more equitable might just evolve to replace this casino world we're living in where the amoral chancers and gangsters seemingly always come out on top. 

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Interest rates since Carney took over:

0.5, 0.5, 0.5, 0.5, 0.5, 0.5, 0.5, 0.5, 0.5, 0.5, 0.5, 0;5 .................0.5, 0.5, and uh oh, 0.25

Somebody once told me that Ring Starr knew how to play more than one note. ( Sorry, make that two notes).

The quote is not appropriate. :wacko:

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2 minutes ago, LC1 said:

It's enough to turn your stomach. I'm increasingly of the opinion that I want to see this current economic system burn, and people like this with it. We'll all be equally fecked, of course, but it'll be worth it to think that something more equitable might just evolve to replace this casino world we're living in where the amoral chancers and gangsters seemingly always come out on top. 

You know where I got my user name from LC1 ?

Somebody once gave me the quote- not sure of its provenance- but it went more or less like this:

" To save people from the consequences of their folly is to create a society of fools"

I liked that one, because that is precisely what successive governments in the United States, Canada, Australia and the United Kingdom are doing. A large group of people are making decisions that are utter folly. Instead of letting them burn, we instead rip the financial guts out of people who saw the exact same folly and avoided it.

An entire society becomes dumbed down as a result, to the point where people you'd normally regard as intelligent regard a incompetent ***** like Carney as some kind of financial rock star.

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