Thursday, May 8, 2008
Why Leave Rates on Hold ?
Why did the Bank sit on its hands?
The Bank of England's decision to leave rates on hold was hardly a shock. Borrowing costs have already been cut three times since December yet inflationary pressures are mounting. Oil prices are not far shy of $125 a barrel and while the economy has been slowing, it is still some way short of stalling altogether. Even so, it is clear that Threadneedle Street's no-change decision merely delays the next cut in rates and probably only until next month.
Posted by plato @ 07:15 PM (1120 views)
9 thoughts on “Why Leave Rates on Hold ?”
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malct says:
perhap we should broaden our perspective on the boe – try this for a cucumber sandwhich
designed to self-disintegrate
In the meantime, the Bank of England found a suitable Governor possessing the
ability to direct the forthcoming German bailout from London with American cash. A
most strange, and intriguing character by the name of Montagu Norman was the chosen
custodian: Norman would be Governor for the extraordinary duration of 24 years (1920-
1944); a case unique in the entire history of the Bank. During the last stages of the
German inflation, Norman initiated the process that would re-anchor Britain and most
industrialized countries to the so-called gold-exchange standard. This operation –grossly
misunderstood by contemporary scholarship—was by no means a sorry attempt bungled
by a few nostalgic gentlemen of leisure to resuscitate the monetary system of yore (pre-WWI).
Rather, it was the peculiar creation of the British Governor, whereby he
enveloped, so to speak, for the length of six years (1925-1931) the banking networks of
the West into a single, highly leveraged and palpably unstable web of payments, which
was in fact designed to self-disintegrate. This too was a game, in which all participating
central banks ‘chipped in’ a given quota in gold. To amass and protect the gold base of
his Bank, Montagu Norman tested in 1920 two fundamental techniques, which he would
employ a decade later to achieve the Empire’s objectives: 1) the pauperization of India by
restricting her money supply (i.e., deliberate deflation) with a view to attracting Indian
gold hoards to London, and 2) the encouragement of massive monetary expansion (i.e.,
inflation) in America as a means to lure gold away from New York,
http://druckversion.studien-von-zeitfragen.net/Conjuring%20Hitler%20Chapter%204.pdf
and
When German troops crashed into Czechoslovakia in September 1938 Germany claimed Czech assets. They applied through the Bank for International Settlements, of which Norman was a Director, for the release of Czech gold held in the Bank of England.
The financial tomfoolery that followed would leave anyone confused, but the outcome was that £6,000,000 worth of Czech gold was transferred to Hitler’s Government, released by Norman.
http://www.toolan.com/hitler/phoenix.html
malct says:
plato – uncle tom has some comments on boe at jack c’s post
he’s defending MN
It’s good to talk
and extend one’s vocabulary – even though they’re closing police stations – constabulary
I smell ponerology – political ponerology even
plato says:
Well all I can do is quote my great ancestor Aristotle :
“The most hated sort of wealth getting and with the greatest reason, is usury, which makes a gain out of money itself and not from the natural object of it. For money was intended to be used in exchange but not to increase at interest. And this term interest, which means the birth of money from money is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth, this is the most unnatural”
Aristotle placed the usurer in the same category as others who “ply sordid trades,” such as pimps.
malct says:
plato – his story is unfolding
crash bandicoot says:
“the UK risks following the US path into recession unless the Bank is more aggressive in cutting rates now.”
I thought that the US path into recession included aggressive rate cutting.
malct says:
what is the relationship between rate cutting and ursury?
shipbuilder says:
Plato – sums up the whole financial industry, really. Although I did get a barrage of abuse for questioning the usefulness of the financial world a while back…..
cornishman says:
@ crash
“I thought that the US path into recession included aggressive rate cutting.”
Well spotted!
inbreda says:
Nice post. Anyway – I’m off out now to make the most of this public holiday and celebrate liberation from the germans.