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Hike interest rates, says former Bank of England comedian

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Once the powerful are out of power, turns out that they actually have some decent ideas and a grasp of the situation.  Mervyn King has also said quite a lot of sensible stuff since he left his job at the bank.

Too bad they didn't follow their convictions when they were in the job but then of course, they wouldn't be in the job for long if they did.

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Its laughable, the ground level staff go on strike, the top level staff continue to use percentages to make their propaganda fly.

The true way to fight inflation is to raise the value of the pound. Hence they need to raise the rates.

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I thought there was a real chance we'd see rate rises in the face of all this Brexit-vote-triggered inflation, however now it seems clear that the spineless, VI-driven dickheads of the BOE plan to simply keep dangling the carrot for the forseeable.

What it certainly absolutely laugable is the concept taht the government and BOE have anyone's interests at heart other than their own.

 

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It depends on the number of fools ?

"The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price."

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23 hours ago, Sour Mash said:

Once the powerful are out of power, turns out that they actually have some decent ideas and a grasp of the situation.  Mervyn King has also said quite a lot of sensible stuff since he left his job at the bank.

Too bad they didn't follow their convictions when they were in the job but then of course, they wouldn't be in the job for long if they did

Yup. 

This development has always amazed me also.

I spend years denigrating many of the people in powerful and influential positions as clueless out of touch dolts. 

Then when they leave their positions of power I am genuinely surprised that they actually knew the truth all along.

But obviously had no balls. 

These positions are obviously not filled by those with actual strength of character. 

 

 

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48 minutes ago, Society of fools said:

Yup. 

This development has always amazed me also.

I spend years denigrating many of the people in powerful and influential positions as clueless out of touch dolts. 

Then when they leave their positions of power I am genuinely surprised that they actually knew the truth all along.

But obviously had no balls. 

These positions are obviously not filled by those with actual strength of character. 

 

 

Or the reverse in the case of Vince Cable.

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On 8/4/2017 at 10:57 AM, Sour Mash said:

Once the powerful are out of power, turns out that they actually have some decent ideas and a grasp of the situation.  Mervyn King has also said quite a lot of sensible stuff since he left his job at the bank.

Too bad they didn't follow their convictions when they were in the job but then of course, they wouldn't be in the job for long if they did.

Yes.  He also said something along the lines about how he thought the circumstances surrounding the start of the economic collapse had been engineered "deliberately" as if it was nothing to do with him even though he was BoE governor at the time.

It's like not having responsibility and not having authority but the governors being rewarded as if they had.

Mind you I don't think Carney will ever see sense.

Edited by billybong

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Any employee (and that means most of us to) is paid to compromise morals against shorter term needs of their employer. Carney is just an employee at the end of the day. They pay him to read a script.

Edited by Si1

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35 minutes ago, billybong said:

 

Yes.  He also said something along the lines about how he thought the circumstances surrounding the start of the economic collapse had been engineered "deliberately" as if it was nothing to do with him even though he was BoE governor at the time.

It's like not having responsibility and not having authority but the governors being rewarded as if they had.

Mind you I don't think Carney will ever see sense.

 

Carney is conflicted, does he follow the instructions of the UK government or Goldman Sachs?

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12 hours ago, Bruce Banner said:

Carney is conflicted

Nope I don't buy that, he believes in what he's doing. 

 

12 hours ago, Bruce Banner said:

does he follow the instructions of the UK government or Goldman Sachs?

Those instructions are likely to be close to identical, so there is little conflict to be had. 

 

Truth is that If a bunch of us HPC'ers found Carney in a high class Whitehall bar and  plied him for several hours with cold Labbatts Blue and then asked him why he was doing what he was doing, his truthful answer would be: 

"Its the only thing we can do. If we raised interest rates, stopped printing money, restricted bank lending for residential property to sensible multiples, etc etc, the economic effects would be so devastating, that it doesn't bear contemplation. You House Price Crashers are genuinely ignorant. You don't know what will happen when what you hope and pray for happens. It will be terrible. My policies are saving you from utter economic and social devastation." 

And then if you prodded him a bit further he'd probably say something like:

" And by the way, don't think that a British property price crash would be restricted to Britain. In this interconnected world, over-leveraged economies in much of the world would start to pop. And that would mean my name would go down in history as the man who started this landslide. And I'm not going to let that happen. I want to be the Prime Minister of Canada, after all. " 

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4 hours ago, Society of fools said:

Nope I don't buy that, he believes in what he's doing. 

 

Those instructions are likely to be close to identical, so there is little conflict to be had. 

 

Truth is that If a bunch of us HPC'ers found Carney in a high class Whitehall bar and  plied him for several hours with cold Labbatts Blue and then asked him why he was doing what he was doing, his truthful answer would be: 

"Its the only thing we can do. If we raised interest rates, stopped printing money, restricted bank lending for residential property to sensible multiples, etc etc, the economic effects would be so devastating, that it doesn't bear contemplation. You House Price Crashers are genuinely ignorant. You don't know what will happen when what you hope and pray for happens. It will be terrible. My policies are saving you from utter economic and social devastation." 

And then if you prodded him a bit further he'd probably say something like:

" And by the way, don't think that a British property price crash would be restricted to Britain. In this interconnected world, over-leveraged economies in much of the world would start to pop. And that would mean my name would go down in history as the man who started this landslide. And I'm not going to let that happen. I want to be the Prime Minister of Canada, after all. " 

I'm sure that's broadly true, but he does seem to favour short term crisis avoidance over long term implications of that. His personal approach seems at odds to the more sympathetic demeanour of Yellen.

Edited by Si1

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4 hours ago, Society of fools said:

Nope I don't buy that, he believes in what he's doing. 

 

Those instructions are likely to be close to identical, so there is little conflict to be had. 

 

Truth is that If a bunch of us HPC'ers found Carney in a high class Whitehall bar and  plied him for several hours with cold Labbatts Blue and then asked him why he was doing what he was doing, his truthful answer would be: 

"Its the only thing we can do. If we raised interest rates, stopped printing money, restricted bank lending for residential property to sensible multiples, etc etc, the economic effects would be so devastating, that it doesn't bear contemplation. You House Price Crashers are genuinely ignorant. You don't know what will happen when what you hope and pray for happens. It will be terrible. My policies are saving you from utter economic and social devastation." 

And then if you prodded him a bit further he'd probably say something like:

" And by the way, don't think that a British property price crash would be restricted to Britain. In this interconnected world, over-leveraged economies in much of the world would start to pop. And that would mean my name would go down in history as the man who started this landslide. And I'm not going to let that happen. I want to be the Prime Minister of Canada, after all. " 

I very much doubt a moderate rise to 2-3% would cripple the world.

 HTB has done far more damage 

 

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20 hours ago, Bruce Banner said:

Carney is conflicted, does he follow the instructions of the UK government or Goldman Sachs?

FTFY
Carney and the UK government follow the instructions of Goldman Sachs

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10 hours ago, Society of fools said:

Nope I don't buy that, he believes in what he's doing. 

 

Those instructions are likely to be close to identical, so there is little conflict to be had. 

 

Truth is that If a bunch of us HPC'ers found Carney in a high class Whitehall bar and  plied him for several hours with cold Labbatts Blue and then asked him why he was doing what he was doing, his truthful answer would be: 

"Its the only thing we can do. If we raised interest rates, stopped printing money, restricted bank lending for residential property to sensible multiples, etc etc, the economic effects would be so devastating, that it doesn't bear contemplation. You House Price Crashers are genuinely ignorant. You don't know what will happen when what you hope and pray for happens. It will be terrible. My policies are saving you from utter economic and social devastation." 

And then if you prodded him a bit further he'd probably say something like:

" And by the way, don't think that a British property price crash would be restricted to Britain. In this interconnected world, over-leveraged economies in much of the world would start to pop. And that would mean my name would go down in history as the man who started this landslide. And I'm not going to let that happen. I want to be the Prime Minister of Canada, after all. " 

I'm sure under those circumstances he would say something along those lines - but it wouldn't be the truth it would be the story, the excuse and the cover story partly to protect his future ambitions.  Everyone is having to pay the price for that. 

As a Director of the BIS (he has been Chairman in the past) he will know that that organisation accepted several years ago that their policies had failed and are ultimately making things far far worse except to line their own pockets and those of their pals.  That's been published in official BIS research papers and has also been mentioned in the mainstream press over recent years but nothing changes and that's because the troughing is so rewarding to themselves.

They openly admit it but not in those exact same words of course.  Yes he believes in what he's doing but it's not for the medium or long term benefit of the UK - it's for the benefit of himself and his pals and that includes non banking corporate buddies and most if not all politicians etc etc.

The BIS Board of Directors

Chairman: Jens Weidmann, Frankfurt am Main

Mark Carney, London <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Agustín Carstens, Mexico City
Andreas Dombret, Frankfurt am Main
Mario Draghi, Frankfurt am Main
William C Dudley, New York
Ilan Goldfajn, Brasília
Stefan Ingves, Stockholm
Thomas Jordan, Zurich
Klaas Knot, Amsterdam
Haruhiko Kuroda, Tokyo
Anne Le Lorier, Paris
Fabio Panetta, Rome
Urjit R Patel, Mumbai
Stephen S Poloz, Ottawa
Jan Smets, Brussels
François Villeroy de Galhau, Paris
Ignazio Visco, Rome
Pierre Wunsch, Brussels
Janet L Yellen, Washington
Zhou Xiaochuan, Beijing

 

Edited by billybong

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1 hour ago, billybong said:

I'm sure under those circumstances he would say something along those lines - but it wouldn't be the truth it would be the story, the excuse and the cover story partly to protect his future ambitions.  Everyone is having to pay the price for that. 

As a Director of the BIS (he has been Chairman in the past) he will know that that organisation accepted several years ago that their policies had failed and are ultimately making things far far worse except to line their own pockets and those of their pals.  That's been published in official BIS research papers and has also been mentioned in the mainstream press over recent years but nothing changes and that's because the troughing is so rewarding to themselves.

They openly admit it but not in those exact same words of course.  Yes he believes in what he's doing but it's not for the medium or long term benefit of the UK - it's for the benefit of himself and his pals and that includes non banking corporate buddies and most if not all politicians etc etc.

The BIS Board of Directors

Chairman: Jens Weidmann, Frankfurt am Main

Mark Carney, London <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Agustín Carstens, Mexico City
Andreas Dombret, Frankfurt am Main
Mario Draghi, Frankfurt am Main
William C Dudley, New York
Ilan Goldfajn, Brasília
Stefan Ingves, Stockholm
Thomas Jordan, Zurich
Klaas Knot, Amsterdam
Haruhiko Kuroda, Tokyo
Anne Le Lorier, Paris
Fabio Panetta, Rome
Urjit R Patel, Mumbai
Stephen S Poloz, Ottawa
Jan Smets, Brussels
François Villeroy de Galhau, Paris
Ignazio Visco, Rome
Pierre Wunsch, Brussels
Janet L Yellen, Washington
Zhou Xiaochuan, Beijing

 

I'm not sure he's a total hipocrite in these respects.

1) Carney as BoE chair has said if you want to get out of the current economic funk then it's a political/fiscal problem, low interest rates are a necessary monetary response to somewhat mitigate the economic weakness, but not the long term solution

2) BIS have said low interest rates are bad in the long run

These two stances do not contradict each other.

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21 minutes ago, Si1 said:

I'm not sure he's a total hipocrite in these respects.

1) Carney as BoE chair has said if you want to get out of the current economic funk then it's a political/fiscal problem, low interest rates are a necessary monetary response to somewhat mitigate the economic weakness, but not the long term solution

2) BIS have said low interest rates are bad in the long run

These two stances do not contradict each other.

And the politicians have said it's a BoE problem which implies interest rates and associated things - as the UK is pretty much a single lever economy.  It's an intentional double bind and the UK people saw that also with HtB when Carney blamed the government and the government blamed Carney.  So far as the UK's general interests are concerned rather than his own interests and his pals I think the hypocrisy is large but of course he's not the only one.

Carney has said a lot of things and some of them won't contradict each other but a lot has contradicted and does contradict and for instance with examples in Forward Guidance. 

The BIS made those remarks some time ago and the long run just seems to get longer and longer.  In the meantime the troughing continues.

 

 

 

Edited by billybong

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5 minutes ago, billybong said:

And the politicians have said it's a BoE problem which implies interest rates and associated things - as the UK is pretty much a single lever economy.  It's an intentional double bind and the UK people saw that also with HtB when Carney blamed the government and the government blamed Carney.  So far as the UK's general interests are concerned rather than his own interests and his pals I think the hypocrisy is large but of course he's not the only one.

Carney has said a lot of things and some of them won't contradict each other but a lot has contradicted and does contradict and for instance with examples in Forward Guidance. 

The BIS made those remarks some time ago and the long run just seems to get longer and longer.  In the meantime the troughing continues.

Agreed re: forward guidance.

With respect to govt and boe passing the buck to one another, I think the govt is the more guilty. I don't like Carney, but the govt CHOOSE to employ him in his capacity.

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1 minute ago, Si1 said:

Agreed re: forward guidance.

With respect to govt and boe passing the buck to one another, I think the govt is the more guilty. I don't like Carney, but the govt CHOOSE to employ him in his capacity.

 

The Bank Rate chart below pretty much sums them all up.

OBR+hockey+sticks+2.jpg

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24 minutes ago, mathschoc said:

I think I agree with a lot of this.

 

"

Britain remains on a life-support drip of easy money at a time it cannot stand on its own two feet. Increasing rates would kill the patient, not shake it out of a lazy torpor.

It was politically expedient for George Osborne to use the Bank to support the economy while he slashed at welfare, public services and infrastructure spending. It’s time the Bank and thinktanks like NIESR said so. So it’s over to you chancellor Hammond. Only a big-spending, redistributive budget can prevent another 10 years of low rates.

"

 

one problem I have with the current govt is not that they're neutral on redistribution, as they're not - they practice ANTI-redistribution, active transferral of wealth from the have nots to the haves. I think it is too late to forgive them.

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46 minutes ago, Si1 said:

Britain remains on a life-support drip of easy money at a time it cannot stand on its own two feet. Increasing rates would kill the patient, not shake it out of a lazy torpor

Which is what I believe Carney's alcohol-fumed response would be -more or less-  in the circumstances I outline above. 

But he's just killing the patient more slowly with the aforementioned drip. It will still die, and perhaps much more painfully and violently than otherwise. 

 

4 hours ago, billybong said:

Yes he believes in what he's doing but it's not for the medium or long term benefit of the UK - it's for the benefit of himself and his pals and that includes non banking corporate buddies and most if not all politicians etc etc

I don't deny that may also be absolutely true and very influential in his motivations.

He would not be where he is unless he is completely loyal to the landed/banking establishment. He married into it after all, and then worked for it. 

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33 minutes ago, Society of fools said:

 

I don't deny that may also be absolutely true and very influential in his motivations.

He would not be where he is unless he is completely loyal to the landed/banking establishment. He married into it after all, and then worked for it. 

Which is why there is an undercurrent (most vocally championed by William Hague I think) of opinion that says monetary decisions, being so political now, should be reabsorbed into the remit of elected politicians.

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9 hours ago, Si1 said:

Which is why there is an undercurrent (most vocally championed by William Hague I think) of opinion that says monetary decisions, being so political now, should be reabsorbed into the remit of elected politicians

And William Hague would be right. 

This undercurrent is not actually new.

I remember at least 5 years ago reading an opinion article in the FT that an elected government would be able to be far stronger in dictating where interest rates should go than a bunch of bureaucrats who desperately want to keep their overpaid jobs, and would thereby keep the rates at the level that was considered expedient for their socio-economic class and for the least chance of a blow-up happening on their watch. 

But, as others have pointed out, the government still has levers, and the very fact that they chose Carney ( knowing exactly what kind of massive property bubble he engineered in Canada), indicates that were they in charge of BOE policy themselves, they may very well have done nothing different. 

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