tag:blogger.com,1999:blog-4411161795798360588.post325936160120328770..comments2024-03-26T09:38:39.888+00:00Comments on Borthlas: Time to stop believing the liesJohn Dixonhttp://www.blogger.com/profile/07447224248021209852noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4411161795798360588.post-20910853892429628352020-07-19T06:49:43.730+01:002020-07-19T06:49:43.730+01:00Spirit,
It is in the interests of both the BoE an...Spirit,<br /><br />It is in the interests of both the BoE and the government to pretend that the Bank is independent and can act to rein in the government if it so decides. But no matter how hard they try, it is still a pretence. The Bank is 100% owned by HMG and ultimately has no choice but to do as it is told. Your statement that the new Governor <i>"... was not the Prime Minister`s choice for the job and was hoisted in by Javid"</i> is true at the level of personalities, but it also acknowledges that it is the government which appointed him. The fact that hiring (and if necessary, firing) the head honcho is a matter for the government serves to confirm where the power ultimately lies.<br /><br />The constraint on government spending arises not from the supply of money (the government can create money at will) nor from 'the markets' (especially when people are queuing up to lend money to the government) but from any inflation which results from competition for resources when there is more money available than resources to spend it on. On the other hand, when an economy has more resources than money available to purchase them (and I accept that there's a slight oversimplification involved in that statement, because there could be differences between sectors) then enabling the purchase of those resources by the creation of extra money boosts the economy without causing inflation. <br /><br />All money is debt, nothing more, nothing less. That's what 'promise to pay' means. And if all money is debt, then reducing the amount of debt inevitably means reducing the supply of money; the obsession that some have with avoiding public debt and reducing the deficit is based on ideology, not economics.John Dixonhttps://www.blogger.com/profile/07447224248021209852noreply@blogger.comtag:blogger.com,1999:blog-4411161795798360588.post-2426784516666671312020-07-18T22:44:20.081+01:002020-07-18T22:44:20.081+01:00You claim that the BoE was ‘under instruction from...You claim that the BoE was ‘under instruction from the Treasury’, I think that might be a conclusion too far.<br />The BoE like the Federal Reserve, Bank of Japan and the European Central Bank have switched on the printing press and so QE is not a problem – as everybody is doing it. <br />However, the new Governor of the BoE -Andy(Bill) Bailey gave an interview on a podcast some weeks ago when he stated that the Bank`s job was to stabilise the UK economy ,but not to pay the bills of the UK government. Interesting to note he was not the Prime Minister`s choice for the job and was hoisted in by Javid, - good decision. What people are drawing from this statement, is that the Bank can switch off the printing press to ‘stabilise’ the economy if HMG does not come with a realistic plan to address the debt.<br />The magic money tree is madness and QE is more damaging than the finest Columbian marching powder, coming off it will not be pleasant and we should recognise what the QE-stock market-bond market is -it`s a Ponzi scheme and they produce much pain, as the coming months will show. <br />Spirit of BMEnoreply@blogger.com