The ludicrous thing was that Britain had a AAA rating in the first place.
It is four years since I started pointing out the blindlingly obvious, that quantitive easing would cause inflation and devaluation. Four years ago this blog had far fewer readers than it does now, and I am quite proud of that piece, so do read it.
At the time it was a deeply unfashionable view – in part because it was New Labour doing it, so all the BBC and Guardianista media were backing quantitive easing. Even when I wrote this two years ago:
Inflation as measured by the retail price index remains stubbornly at 5.2%, despite all the obvious deflationary pressures on the economy and continuing weak consumer demand. Strangely, the attempts to explain this being offered by media pundits all miss out quantitive easing, or to use a more old-fashioned term, printing money.
It is deeply unfashionable to hold to the view that simply to create more money reduces the value of the money already in circulation in relation to the supply of available goods; but that is what all history tells us (the benchmark example being the rampant inflation after Spanish opening up of the New World greatly increased the amount of gold coinage in circulation). Common sense tells us that too. Otherwise we could simply solve many of our problems by printing another couple of trillion pounds.
A couple of years ago, I suggested “Enough quantitive easing and we can eventually get back to stagflation”. We are just about there. Why have none of the experts noticed?
nobody much agreed.
Fashion in economics is fascinating. Now every financial pundit on the BBC and Sky has noticed that quantitive easing causes devaluation and inflation. Suddenly they have remembered that if you create a lot of something, it decreases its unit value.
Hey, but the banks have the money that was created, and bank bonuses are back to normal. So all is fine.
Excellent post Craig, and interesting discussion.
Looking at the current average borrowing rates as a gauge of health of each country is a massive oversimplification. What you are missing is that none of the EU countries are buying their own bonds and so artificially depressing interest rates. They are not allowed to do that and are being lambasted by bankers and right wing politicians as a result. In the long term it may actually save the EU once QE is abandoned in US/UK.
This QE action is being hailed as some holy grail when it fact its just making things worse, although I do admit there seemed to be little or no other choice. As long as the Bank of England buy UK Treasury gilts(bonds) then it has a depressing effect on Government interest rates.
Higher demand lowers interest rates that need to be paid . However as we deploy more currency we are essentially weakening the pound. This cannot go on forever. Think about that whole process.
That is why the pound is collapsing against other currencies, if we use the rather primitive analogy that each pound is a share in UK PLC then we’re just issuing more shares, thus diluting those already in circulation’s value. Thus the pound is being silently devalued.
In Scotland the AAA rating is a problem on 2 fronts, firstly that the Unionist’s made a big deal about it affecting Scotland and now seem to have done a volte face in that its no big deal….
@ Yakoub
Try Randall Wray’s “Modern Money Theory” (Palgrave 2012).
This is written in a straightforward way without maths.
He makes it clear that no-one has an income until someone spends.
If you have a good grounding in maths, try Wynne Godley “Monetary Economics” (2007).
The UKIP woman at Eastleigh, Diane James, is not all she seems. She is one of the Waverley Borough Councillors who have just voted themselves a 94% increase in their allowance. She is also racist like the Tory woman who has been parachuted in from Benfleet, Essex.
– She (James) works in healthcare and campaigns against “the creeping privatisation of the NHS orchestrated by the Conservatives without an electoral mandate”.
– She’s not local but has a history of doing well in elections from a standing start. As an independent, she won a council seat previously held by a Tory for 18 years
– On her first day of campaigning, she caused controversy by calling for a temporary halt to immigration to stop Romanians coming to the UK and committing crimes.
– She has a giant shop on Eastleigh high street and billboard van promoting her candidacy for Ukip
http://www.telegraph.co.uk/news/politics/9870260/The-Eastleigh-by-election-candidates.html
‘Works in heathcare’ means that she is a director of this £multi million venture capital outfit, Proven Health Vct Plc.
It is an ‘Active business incorporated in England & Wales on 20th December 2000. Their business activity is recorded as Activities Of Venture And Development Capital Companies. Proven Health Vct Plc is run by 4 current members. and 1 company secretary. It has no share capital. It is not part of a group.
The latest Annual Accounts submitted to Companies House for the year up to 31/01/2012 reported ‘cash at bank’ of £1,772,000, ‘liabilities’ worth £133,000, ‘net worth’ of £8,485,000 ‘assets’ worth £3,667,000.’ (Company Check website) and is also a director of a management consultancy.
~~~
Furthermore, UKIP are a shambles. Marta Andreasen the UKIP MEP who attempted to expose the fraud in the EU has defected to the Tory grouping.
She said of Farage, “Unfortunately, their party leader treats any views other than his own with contempt. Ukip is his plaything to mould and shape in any way he sees fit, regardless of the views of others, myself included. His actions, surrounding himself with an old boys club of like-minded sycophants, are dictatorial in sharp contrast to those of David Cameron, who has shown he can listen, adapt and do what is right for the country, not just for personal gain.”
http://www.independent.co.uk/news/uk/politics/ukip-mep-marta-andreasen-defects-to-the-tories-and-launches-attack-on-nigel-farage-8507960.html
Andreasen’s new choice of party and her view of Agent Cameron made me smile.
It’s also ludicrous that anyone pays attention to these ‘raters’. But, people do pay attention. And by ‘people’ I mean ‘people who should, and do, know far far better. So, that’s journalists and politicians.
Credit-rating agencies are a scam. Perhaps once they had a function, but now they are just tools of neoliberalism. And, what’s especially depressing is how obvious it all is. We aren’t talking about faked moon-landings here. The total ineptitude of credit-rating agencies is a matter of public record, and it’s being going on for at least a decade. I say ‘ineptitude’, because I’m being kind. I suspect blatant corruption, blackmail and fraud – but that’s not on public record. What is on public record, though, is bad enough. The agencies have, for a decade, been wrong about almost everything. One may ask why …
“Thanks – that cheered me up (about the Labour activists). i hope people in Sctland will get the message when UKIP wipe the floor with New Labour in Eastleigh too.”
Actually I don’t think it’s wiping the floor they’ve got planned for them.
https://twitter.com/andrewjdtaylor/status/304593081649479683/photo/1
Good post Brendan.
Thanks for that little video of Melenchon, Mark, very interesting to see how much mainstream socialism on the Continent has taken up the green localisation and energy agendas.
It is quiet momentous for me, having left the young socialists in 1973, when the blueprint for survival made me join ‘die Gruenen’ in Germany, having realised that any socially responsible movement can only advocate subsidiarity, decentralisation of power, as well as circular economic patterns based on what is sustainable, recycling economics to a very large extend.
But the political realities have panned out rather different as decentralising power and living responsible within such a model is an alien concept to all those who have grown up in a consumer society and you will find that many Greens drive to their annual Conference because its cheaper than the train.
But what was said in the video can be enacted by any political party, any Government should introduce goals and targets, even this minority party coalition of establishment/status quo merchants.
Together with industry,talks on how to change production processes and allow for recycled materials to be re-used, percentage targets, to radically change the linear model/throw away model. For that we should introduce MSR reactor technology, ideally with France and others, safely cooperate, urgently, and start burning our nuclear stockpiles for energy, the only responsible thing to do for future generations, Clark has convinced me.
Add to this some precautionary/ job and expertise positive measures, working on the assumption/preparing for sea level rises in the east of England, to safeguard/buy time, for our estuaries, the Fen-lands, were some 5% of our fresh food supplies originate, but also the Thames estuary, the Blackwater and Orwell estuaries, there’s some serious public investment needed, jobs to be created and Dutch expertise thought.
A Wash barrier and lock system would generate enough tidal power to scrap two nuclear power stations, that is regular power.
I’m sure the insurance companies paying out billions for flood damage would agree.
But I digress.
BTW. Non of these ideas have copyrights and can be picked up by any Government flunky in need of brownie points, please do. And any further questions as top how to carry out the work in an ecologically sound, least impacting way, don’t hesitate to ask.
@ Charles Melville,
” A far better policy would be for the Government to spend directly into the economy? Would you regard that policy also as inflationary? Sigh, it’s as if Keynes had never lived. The progressive views of this blog need to correlated with an enlightened view of macroeconomic policy.”
I thought that when Obama was elected he would have done precisely that – heavily increased domestic spending on public projects – much as FDR did before him. Instead he continued with military over-expenditure and wars.
The problem is neither printing money nor inflated executive pay it is theft of money by the bankers to purchase Zionist foreign policy with the money Thatcher and Brown gave them control over and freedom to move around the world. The power to steal was granted freely to the bankers by these politicians even though it was perfectly obvious what they were doing.
The bankers were given these powers, supposedly on trust ha ha! on the ridiculous argument that high responsibility deserves high pay. We should hang these two PMs if we hang anybody. But the bankers had already blackmailed them so even if it was you or me in the same position we would have done the same as them if they had blackmailed us the same.
The reason why we are strugging as an economy is that there has been no quantitive easing. Real cash has been stolen and replaced by QE cash. If the real money and the printed junk were both present and available the economy would be on fast zoom forward as technology accelerates at high speed.
Unfortunately, Craig and the management class of this country are in problems if they talk about Zionist theft/blackmail and alternative foreign policy. ‘I can do more from within the system than outside it’ is the usual cheerful refrain. Those inside the gate who don’t want to be there are called gatekeepers. If they blow the whistle on Zionist fraud, they do not even get to live to see another day. Craig’s collar was felt and released again.
One has to ask oneself why our foreign policy is different in the cases of Saddam, Gaddafi and Assad. The BBC was repeating yesterday in our own correspondent the lie that the Alawi sect is part of Islam. It only pretends. Its followers are numerous in Turkey. It is part of the source of the rift in Islam between Sunni and Shi’a, because none of the ideas of Shi’ism have any foundation in the Qur’an.
The Alawis are the (not necessarily ethnic) remnant of polytheistic Jews who had absorbed the polytheism of East and West by trade, that were destroyed in Jerusalem by the Romans by Allah’s decree in the first century AD. The Alawi are not a sect of Islam nor even of Judaism. They are a sect of Classical pre-Christian polytheism, and still existing Eastern polytheism.
Alawis and Shi’ism are part of the ancient religion which preceded the reforms brought by Jesus pbuh to the Children of Israel. I am not saying this in order to repeat the claim the BBC repeats again and again that there will be a genocide of the Alawis and the Iranians in the months to come. The real struggle is between A/ Deviance : Alawis, Turkey, Shi’a, the West, India, China, Russia, Sunni Political Islam on the one side and B/Integrity : Those who struggle for justice or believe in God’s Laws and who believe that politics is all lying. The genocide that is looming is the Masonic New World Order destroying the freedom of the world’s population’s hearts and minds.
The point I am making is that the philosophical allegiances of all Syria’s neighbours, the Classical West ( ancient Rome ), Israel, the current regime in Turkey from southern Turkey, Iran, Shi’a Iraq, the atheist post-Soviet bloc and the atheist Chinese bloc are all with Assad and the Alawis.
The oil-economic powerhouses of Sunni Islam have paid for material assistance and mercenaries from the above list, for their Sunnis to fight a jihad against Assad who is one of the above list himself. When this war started I thought Assad was just one of the dodgy Muslim rulers which is how he portrays himself and how the BBC still portrays him. In fact, Syria is a battleground of ideas between GNWO and spiritual Reformation. Assad is a very small pawn.
There always has been a conflict inside the Jewish faith between those who want to redeem themselves by greater adherence to their religion and those who want to achieve success through Macciavellian means, ( bank robbery ). There is a similar rift in Islam. Saudi Islam is also divided between those on the dodgy side of the equation because they want to achieve power through politics and those who want change by the Qur’anic method of self-reform.
In this practising Judaism is closer to the philosophy of Global Sunni Islam. What we are seeing in Syria is a war between the political minds of the world and the spiritual minds, which includes those who fight for justice and human rights. It is a battle for control of the world between a global alliance of deviance and a global alliance of integrity
You non-believers who are fighting for justice and truth are paradoxically on God’s side while the Muslim political collaborators/ ahzab are against Him. The important issue is not the genocide of a small ethnic group, the Alawis, but the heart and mindocide of all free honest human beings.
The content of the last sentence of this Guardian article filled me with disgust and disbelief. How callous of this young blood.
‘Not all students have immersed themselves in this debate. The Oxford Student newspaper reported that a member of the Bullingdon Club was fined for setting off a firework at a nightclub earlier this month. According to the paper, the student was accepted into the club after an initiation ceremony which included burning a £50 note in front of a tramp.’
The article is about the furore following Galloway’s walk out from a debate and on whether Oxford will vote to join the BDS campaign against Israel. I think we can guess what the result of that vote at Oxford will be.
Oxford in uproar over union motion to boycott Israel
Threatening emails, accusations of racism and walkout by George Galloway follow motion at students’ union
http://www.guardian.co.uk/education/2013/feb/23/oxford-union-boycott-israel
Lets not let the facts get in the way of a good argument. If anyone were to bother to look at the monetary statistics – see the link below then they will see that it is pretty clear that it is something other than the level of money supply that is causing what inflation we have.
http://www.bankofengland.co.uk/statistics/Documents/bankstats/2012/Dec12/TabA2.1.1.xls
QE, which isn’t printing of money btw – but an attempt to improve the banks’ balance sheets in order to encourage them to lend, hasn’t worked because there is limited demand in the economy for such lending has probably had the impact of making things less worse than they would have otherwise been – the studies I have seen referred to say by 1-2% of GDP. Keynes in the 1930s pointed out that there was a limit to how much demand could be stimulated entirely by monetary stimulus and as Charles Melville has pointed out what we need is the direct injection of demand into the economy.
If anyone wants something a little less academic on where Keynesians stand today then Krugman’s current paperback on “How do we get out of this depression?” is probably as good a palce as any to start.
Mary
Why have you ignored the body of the Observer article – do you think that it was right for Galloway to walk out on the debate because he was opposed by an Israeli on the grounds that he does not recognise Isreal or believe that individual Israelis have the right to a platform? the individual concerned was opposed to Israel’s policy on settlement.
Craig
If you want an example of anti-semitic claptrap on your blog – might I suggest you look at Guano’s (appropriate name) last near Protocols of Zion posting.
@ Resdiss
Galloway has every right not to engage with who he chooses just as Mary and other users here have every right not to engage with you or the other trolls
“Why have you ignored the body of the Observer article – do you think that it was right for Galloway to walk out on the debate because he was opposed by an Israeli on the grounds that he does not recognise Isreal or believe that individual Israelis have the right to a platform? the individual concerned was opposed to Israel’s policy on settlement.”
Do you think it was right of our sportsmen to refuse to play against apartheid South Africa?
Isn’t that the point of boycotting something?
re George Galloway (various posts above)
It’s very curious, isn’t it, that he refused to debate with the Israeli, since he’s normally very fond of talking and very fluent when doing so.
Could the answer be that he chickened out given that the Israeli was nearer to the “scene”, so to speak, than most of the other people he usually debates with and that he was fearful of being out-debated and out-argued for once?
BTW I agree with Resident Dissident (welcome back!)’s comment about the Guano post : I thought the thread was running rather well, interesting and informative, and then – lo and behold – we’re with the Zionist plot to take over the world again. Pathetic.
Exexpat
Then might I suggest that Galloway doesn’t go to debates on the subject – that is unless you prefer deabtes of the one hand clapping variety.
Just as Mary is entitled to point out what she wants – so am I entitled to point out contrary views on what is a public forum, or trolling as you call it.
Fred
“Do you think it was right of our sportsmen to refuse to play against apartheid South Africa?”
Yes when they were representing the State of South Africa – but in this case Galloway went to the debate and after giving his rant/speech left because he “doesn’t recognise Isreal and he doesn’t talk to Israelis”.
Do you really think that such an attitude will really ever achieve anything?
Galloway doesn’t talk to Israelis…
http://politicalscrapbook.net/wp-content/uploads/2013/02/george-galloway-uri-geller.jpg
Unless a good photo-op is in the offing.
Incidentally in the past two years inflation has soared from 5.2% to a mind numbing 2.7%. You’ll have to excuse us but we oldies who lived through the mid-70’s when inflation was ten times that aren’t going to get terribly excited.
“Do you really think that such an attitude will really ever achieve anything?”
Yes.
It worked with South Africa.
We’re all in this together.
Yeah right.
Bullingdon Bastards.
Burning £50 notes in front of a tramp may just be an initiation rite to these horrors but to a tramp the indignity,humiliation and pain could easily drive them to suicide.
How on earth did these bastards get to rule?
Fred
Not even the Committee trying to organise the boycott agree with Galloway’s position of this. “BDS does not call for a boycott of individuals because she or he happens to be Israeli or because they express certain views.”
http://www.bdsmovement.net/2013/bds-movement-position-on-boycott-of-individuals-10679”
And you are very wrong on South Africa – there was plenty of dialogue at the individual level – just read Mandela’s biography.
Of course in Galloway’s book it is totally ok to talk and have a dialogue with a mass murderer who you claim to have previously condemned for gassing his own people and his neighbours and then praise him, or to praise another one who you have condemned months previously for shelling a Palestinian refugee camp. The man is a complete hypocrite and utter disgrace – I wouldn’t be suprised if he were to seek to join the Bullingdon Club.
Anyway good luck to Bradford City this afternoon – that city deserves a bit of luck.
Hmmm. Could it be there is a nest of Romeros in the Vatican, cleaning House? Ratzinger’s resignation is just the beginning?
“O’Brien, who is due to retire next month, has been an outspoken opponent of gay rights, condemning homosexuality as immoral, opposing gay adoption, and most recently arguing that same-sex marriages would be “harmful to the physical, mental and spiritual well-being of those involved”. Last year he was named “bigot of the year” by the gay rights charity Stonewall”
http://www.guardian.co.uk/world/2013/feb/23/cardinal-keith-o-brien-accused-inappropriate
I put the link up not to discuss the merits and demerits of George Galloway’s action that evening but to illustrate the mindset of a rich and overprivileged male undergraduate at Oxford. Does membership of the Bullingdon Club require a schooling at Eton or another public school? Yes. Whose children go to those schools? The rich and overprivileged.
http://marissa177.deviantart.com/art/Summon-ze-trolls-303573005
Arbed? Are you around?
“Brown, in federal custody since September 2012, has been jousting with the feds for quite some time.
Round one of his travails began on March 6, 2012, when FBI agents raided his Dallas apartment, looking for evidence related to the 2011 hack of e-mails belonging to Stratfor—a private firm with substantial links to the American intelligence community. Brown sought refuge at his mother’s, but Special Agents arrived there as well, later in the evening. Although the feds found no incriminating evidence, they continued to harass Brown and his family, threatening to file obstruction of justice charges against Brown’s mother for hosting her son during the raid. This prompted Brown to record an ominous YouTube video threatening the Special Agent in charge of the investigation. He was arrested that evening and held for weeks without indictment, under the claim he was an imminent threat to the agent’s safety. In early October 2012, he was finally charged on a number of counts related to harassment of a federal officer.”
http://whowhatwhy.com/2013/02/21/the-saga-of-barrett-brown/
@ Resident Dissident :
if you were to propose Gorgeous George for membership of the Bullingdon Club I should be happy to second him.
Very nice answer to Fred’s question in reply to your question (a frequent device of his), you flummoxed him and left him floundering and gasping for breath like a landed fish 🙂
“”Clearly they’re more worried about what they perceive as his egging people on to go after defence contractors and secret spy organisations,” says Brown’s former attorney Jay Leiderman. “Barrett believes in privacy for individuals and transparency for corporations and government. The government doesn’t like his belief system. And Barrett was effective in expressing that belief system.””
http://www.wired.co.uk/news/archive/2013-01/25/barret-brown-charges
@ Mary at 16h10 on the Bullingdon Club
No, membership does not require an Eton education or rich parents. Radek Sikorski (NO relation to the wartime general btw!) was a member despite being a penniless refugee from martial law in Poland.
Check your assertions and bite on that viper tongue of yours, deary.
I don’t know if I’m alone in this, but I find myself dreading the arrival of 16h00 UK time because this is when our fuzzy American friend Ben Franklin usually clocks in.
One somehow catches oneself wishing that dawn would never arrive in California.
I don’t mind his ideas, insofar as one can decrypt them, but I do wish he would tighten up his prose and drop the enigmatic, eliptic, oracular style, which is not impressive but merely irritating. He also uses commas in a most boring manner.