"I read a newspaper article the other day suggesting that a little more inflation might be a good idea because it would dissolve away mortgage debt. And a very senior executive said to me: 'Aren't we going back to the bad old days when we just devalued and inflated our way out of trouble?' We know the evils of inflation. We have to be incredibly vigilant."
I think it's sometimes a good idea to start a post with a joke. So there is one above. It has to be a joke, because the quote is from no less than The Bank of England's chief economist, Spencer Dale, in a recent interview in The Independent.
It is very clear, from my reading of the latest Bank Of England monetary policy minutes, that The Bank continues to conduct its monetary policy according to the following simple rule set:
1) Under no circumstances at present, can the Bank raise interest rates or reverse Quantitative Easing
2) Therefore, try and make the evidence fit premise 1) above.
If you read the minutes, the evidence they are looking at indicates that inflation will continue to remain above target for all of this year, and next. And they have the unusual luxury of knowing with 100% certainty about one particular significant upward pressure on prices: the coalition governments planned increase in VAT to 20% in 2011. But, presumably, the higher inflation as a result of the VAT rise next year will join the ever expanding list of "temporary" factors that have led to the 2% target being exceeded month after month after month.
"And a very senior executive said to me: 'Aren't we going back to the bad old days when we just devalued and inflated our way out of trouble?'"
The "very senior executive" quoted by Dale has concisely assessed in one sentence exactly what the Bank of England is doing!
What action did the monetary policy committe decide on? Surprise surprise, continue to leave interest rates on the floor and in fact there's actually a hint there may be even more Quantitative Easing! Yes, a continuation of Wiemar Republic style money printing on the cards, in the face of an inflation rate that has and will continue to exceed the 2% target! Hence they are now cranking up the propaganda machinery: an increasing number of speeches and interviews like the one above from Bank Of England cronies telling us all just how "serious" they are about keeping inflation under control.
Bullshit!
"We know the evils of inflation."
Yes you do, Mr Dale. And you embrace them with gusto. You and your grubby cohorts in the Bank, are a (and please don't be offended by this) bunch of robbing cunts. I would like to counter-punch with this quote from Henry Hazlitt (THE INFLATION CRISIS, AND HOW TO RESOLVE IT, p32):
This is what "monetary management" really amounts to. In practice it is merely a high-sounding euphemism for continuous currency debasement. It consists of constant lying in order to support constant swindling. Instead of automatic currencies based on gold, people are forced to take managed currencies based on guile. Instead of precious metals they hold paper promises whose value falls with every bureaucratic whim.
When did Hazlitt write that? Over thirty years ago, in the late 1970s.
plus ça change, plus c'est la même chose, eh Mr Dale?
Wednesday, 28 July 2010
Wednesday, 26 May 2010
The Inflation Theft Continues
If there was any doubt, any doubt at all, about the Bank Of England's real agenda, it has been laid to rest with the latest inflation figures, showing the CPI has climbed to 3.7%, continuing the transfer of wealth from honest savers to debtors.
Yet again, another letter of explanation has been required to the Chancellor to try and cook up some excuses as to why the 2% target has been exceeded.
Those clever people in the mass media, banging on about the dangers of deflation, are exposed as the thick, sheep like state propaganda peddling fucks that they are. Time and time again I have said the deflation scare is nothing more than an outright lie. And I have been proven right.
The Bank knew that falling prices were not a danger. If they thought otherwise, why did they make sure their own pension scheme was heavily hedged against inflation in 2008? That would have proved a costly mistake for their own pensions if deflation had happened, but a very shrewd move if inflation took off. Which, of course, it has. Interesting, no?
Let's be clear what the bank is doing. It's trying to inflate the country out of its debts. It has printed money saying that it needed to raise asset prices because of a deflation danger, in fact the government needed the bank to monetise the governments debts. The so called Quantitative Easing programme has proven to be inflationary, just as I predicted.
The Bank shows no sign of raising interest rates or reversing the Quantitative Easing programme, proving it has effectively abandoned any attempt to keep inflation at or below 2%. In private, The Bank has been instructed to keep monetary policy extremely loose whatever the inflation figures do. The high inflation we are experiencing is not an accident. It is deliberate. The Bank pretends its job is to control inflation. In fact it is the source of inflation.
It seems each time we have this overshoot of the CPI, The Bank says its due to "temporary factors". Problem is, we seem to have had a lot of temporary factors, one after the other, for the past 3 years. You know what I call a string of temporary factors that keep appearing month after month? A persistent long term trend.
Even the mainstream media is starting to take notice. Maybe they've been reading this blog?
Yet again, another letter of explanation has been required to the Chancellor to try and cook up some excuses as to why the 2% target has been exceeded.
Those clever people in the mass media, banging on about the dangers of deflation, are exposed as the thick, sheep like state propaganda peddling fucks that they are. Time and time again I have said the deflation scare is nothing more than an outright lie. And I have been proven right.
The Bank knew that falling prices were not a danger. If they thought otherwise, why did they make sure their own pension scheme was heavily hedged against inflation in 2008? That would have proved a costly mistake for their own pensions if deflation had happened, but a very shrewd move if inflation took off. Which, of course, it has. Interesting, no?
Let's be clear what the bank is doing. It's trying to inflate the country out of its debts. It has printed money saying that it needed to raise asset prices because of a deflation danger, in fact the government needed the bank to monetise the governments debts. The so called Quantitative Easing programme has proven to be inflationary, just as I predicted.
The Bank shows no sign of raising interest rates or reversing the Quantitative Easing programme, proving it has effectively abandoned any attempt to keep inflation at or below 2%. In private, The Bank has been instructed to keep monetary policy extremely loose whatever the inflation figures do. The high inflation we are experiencing is not an accident. It is deliberate. The Bank pretends its job is to control inflation. In fact it is the source of inflation.
It seems each time we have this overshoot of the CPI, The Bank says its due to "temporary factors". Problem is, we seem to have had a lot of temporary factors, one after the other, for the past 3 years. You know what I call a string of temporary factors that keep appearing month after month? A persistent long term trend.
Even the mainstream media is starting to take notice. Maybe they've been reading this blog?
Wednesday, 24 March 2010
Be a Government Informer. Betray Your Family & Friends. Fabulous Prizes to be Won
"Hello? Yes I'd like to report a terrorist please. Yes, he's already responsible for the loss of many innocent lives.
An enemy of democracy?
Oh, most definitely, no question.
Does he have a fixed address?
Oh yes.
It's 10 Downing Street, London...hello?"
Tuesday, 23 February 2010
The Bank Of England's Solution To The Recession? Stagflation.
With the latest inflation figures showing yet again price rises are a continuing problem at a savings destroying 3.5%, in direct contradiction to all the deflation hysteria, it’s time to pause and take stock of the historical data.
It exposes so thoroughly the level of propaganda that masquerades as news in our mass media it’s quite frightening.
Mass media/Bank of England claim:
The credit crunch means falling prices are a greater possibility than rising prices. That could lead to a deflationary spiral so monetary policy must be extremely loose bla bla bla bullshit bullshit bla bla.
Really? Let’s have a look at the average inflation figures (Consumer Price Index) 1997 – 2009:
1997 1.8
1998 1.6
1999 1.3
2000 0.8
2001 1.2
2002 1.3
2003 1.4
2004 1.3
2005 2.1
2006 2.3
2007 2.3
2008 3.6
2009 2.2
If you had to play “spot the deflation”, what year would you pick?
Oh dear. Doesn’t the “deflationary” 2008 – 2009 period have inflation comfortably above the Bank of England’s 2% target? For that matter, also notice that post 2004 it looks suspiciously like the 2% target has become a floor, i.e. it looks like they are aiming for a minimum of 2% inflation after 2004. With an asset bubble booming out of control during that decade, to err on the upside of the inflation target is absolutely inexcusable. If the Bank of England had had any balls, it would have raised interest rates to reign in the property boom, and if that meant inflation falling well below 2%, so be it. After all, their only punishment for missing the CPI target is to write an explanatory letter, isn’t it? What a brilliant contract of employment!
Dear Chancellor of the Exchequer,
I didn’t do my job properly again this year, so as required, I am writing to tell you. Thanks and glad that’s all I need to do. Here’s to many more years of getting paid a fucking fortune to be shit.
Yours,
The Governor of the Bank of England.
But I digress.
Examining the monthly figures, which is what the monetary policy committee will take into consideration when deciding the level of interest rates (or now, god help us, also whether to print more money) at their monthly meetings:
2007 CPI at or above 2% target in 9 of the months
2008 CPI at or above 2% target in 12 of the months
2009 CPI at or above 2% target in 7 of the months
And for the 4 years 2006 – 2009:
CPI below 1% never
Where’s the fucking deflation?
Here you go, I’m getting my squeegee out and I’m rinsing my eyes real good, but every time I look I’m sorry, I just see plenty of inflation.
What fucking data are these supercilious Oxbridge cunts at the Bank of England looking at?? Have they got the right country?
Stop eroding my savings and stealing my wages you thieving fuckheads!
It exposes so thoroughly the level of propaganda that masquerades as news in our mass media it’s quite frightening.
Mass media/Bank of England claim:
The credit crunch means falling prices are a greater possibility than rising prices. That could lead to a deflationary spiral so monetary policy must be extremely loose bla bla bla bullshit bullshit bla bla.
Really? Let’s have a look at the average inflation figures (Consumer Price Index) 1997 – 2009:
1997 1.8
1998 1.6
1999 1.3
2000 0.8
2001 1.2
2002 1.3
2003 1.4
2004 1.3
2005 2.1
2006 2.3
2007 2.3
2008 3.6
2009 2.2
If you had to play “spot the deflation”, what year would you pick?
Oh dear. Doesn’t the “deflationary” 2008 – 2009 period have inflation comfortably above the Bank of England’s 2% target? For that matter, also notice that post 2004 it looks suspiciously like the 2% target has become a floor, i.e. it looks like they are aiming for a minimum of 2% inflation after 2004. With an asset bubble booming out of control during that decade, to err on the upside of the inflation target is absolutely inexcusable. If the Bank of England had had any balls, it would have raised interest rates to reign in the property boom, and if that meant inflation falling well below 2%, so be it. After all, their only punishment for missing the CPI target is to write an explanatory letter, isn’t it? What a brilliant contract of employment!
Dear Chancellor of the Exchequer,
I didn’t do my job properly again this year, so as required, I am writing to tell you. Thanks and glad that’s all I need to do. Here’s to many more years of getting paid a fucking fortune to be shit.
Yours,
The Governor of the Bank of England.
But I digress.
Examining the monthly figures, which is what the monetary policy committee will take into consideration when deciding the level of interest rates (or now, god help us, also whether to print more money) at their monthly meetings:
2007 CPI at or above 2% target in 9 of the months
2008 CPI at or above 2% target in 12 of the months
2009 CPI at or above 2% target in 7 of the months
And for the 4 years 2006 – 2009:
CPI below 1% never
Where’s the fucking deflation?
Here you go, I’m getting my squeegee out and I’m rinsing my eyes real good, but every time I look I’m sorry, I just see plenty of inflation.
What fucking data are these supercilious Oxbridge cunts at the Bank of England looking at?? Have they got the right country?
Stop eroding my savings and stealing my wages you thieving fuckheads!
Monday, 28 December 2009
Why do they keep repeating the Keynesian lies?
I've dealt often enough on this blog with the deflation myth, mainly because that piece of blatant propaganda is getting repeated often enough in the mainstream media to merit repeated refutations. But another big fat lie I'd like to address is the so called "paradox of thrift". This is another Keynesian theory that, roughly speaking, states that it is bad for the economy if everybody simultaneously cuts back their spending and starts to save...which in an economic downturn is what tends to happen.
When times are bad, the last thing anybody should be doing is splashing out on big purchases, so a policy of save more, spend less, makes perfect sense. However, along comes Keynes and manages to cook up a load of bollocks theory that says this is bad for the economy. OK, fair enough, he can talk shite if he likes. Unfortunately, that is not where it ends - the government and the mainstream media act as if this theory is the gospel truth.
There are many examples, but check out this beauty that appeared in The Times recently. To quote the author,
"As John Maynard Keynes pointed out, excessive saving at a time of recession can do more harm than good, a phenomenon he called the paradox of thrift."
Note the phrase "As John Maynard Keynes pointed out". That's right folks, we're not dealing with a theory here. Keynes simply "pointed out" something, i. e. the paradox of thrift is not a theory it is a self evident fact! Well, it isn't. There are numerous demolitions on Mises.org, check out one here.
Why do the elites love the Paradox of Thrift so much? Because they are devastated at the possibility that a large number of people might escape from debt. People not in debt might even start to build up their own independent source of wealth. And that means they could even tell their employer to stick their shit job. That just won't do. The proles must continue to live in fear at the prospect of losing their jobs and the best way to achieve that is to promote debt as the solution to our problems and ensure as few people as possible own their own home outright.
Which is exactly the situation with have right now. Funny that, no?
Wishing you all the Very Best for the New Year 2010 (everyone except of course the governing elites, may I strongly suggest that you simply GET FUCKED, always)
When times are bad, the last thing anybody should be doing is splashing out on big purchases, so a policy of save more, spend less, makes perfect sense. However, along comes Keynes and manages to cook up a load of bollocks theory that says this is bad for the economy. OK, fair enough, he can talk shite if he likes. Unfortunately, that is not where it ends - the government and the mainstream media act as if this theory is the gospel truth.
There are many examples, but check out this beauty that appeared in The Times recently. To quote the author,
"As John Maynard Keynes pointed out, excessive saving at a time of recession can do more harm than good, a phenomenon he called the paradox of thrift."
Note the phrase "As John Maynard Keynes pointed out". That's right folks, we're not dealing with a theory here. Keynes simply "pointed out" something, i. e. the paradox of thrift is not a theory it is a self evident fact! Well, it isn't. There are numerous demolitions on Mises.org, check out one here.
Why do the elites love the Paradox of Thrift so much? Because they are devastated at the possibility that a large number of people might escape from debt. People not in debt might even start to build up their own independent source of wealth. And that means they could even tell their employer to stick their shit job. That just won't do. The proles must continue to live in fear at the prospect of losing their jobs and the best way to achieve that is to promote debt as the solution to our problems and ensure as few people as possible own their own home outright.
Which is exactly the situation with have right now. Funny that, no?
Wishing you all the Very Best for the New Year 2010 (everyone except of course the governing elites, may I strongly suggest that you simply GET FUCKED, always)
Thursday, 15 October 2009
The Governments Magic Money Tree
UK projected fiscal deficit for this year (the amount by which government spending exceeds collected revenues): £175 billion
Amount of “quantitative easing” sanctioned by the Bank of England so far: £175 billion
Now there’s a funny coincidence, eh?
If I started up my own printing press to churn out money and tried spending that money in the shops (even if my equipment produced notes that were indistinguishable from the “real thing”), I’d be liable to be arrested for the crime of counterfeiting.
Why is that?
The State would say, “Because your money isn’t real.”
I could retort, “My printing press produces currency that even your best experts cannot distinguish from that produced by the Royal Mint”.
The state responds, “It is not how accurate your copy of money is that gives it its value”.
Me, innocently, “Oh? So what is the problem with me printing money then?”
The state, “Ha! If you can just create money with a printing press at minimal cost, what value does it have? If everyone could do it, who would bother working? You would have obtained something for nothing! "
Me, “A good point. OK, so when the state creates money out of thin air, how does that add anything of value to the economy? Has not the state obtained something for nothing also?”
State, “Humph. Erm…”
Me, “I’m just a bit puzzled. Money creation by anyone is forbidden, because if it were permitted money would cease to have value. Yet when the state creates new money, it does have value? What’s so magic about your printing press?”
State, “Because we call ours QUANTITATIVE EASING”. Does that answer your question?
Me, “Not in the slightest.”
State, “QUANTITATIVE EASING!!! QUANTITATIVE EASING!!! TREMBLE BEFORE OUR INCOMPREHENSIBLE JARGON!!!”
Me. “Nope. I don’t think so. Just a thought – perhaps you know you cannot afford to borrow that £175 billion this year, so you’re simply printing off (electronically) the money you need, diluting the value of the pound in the pocket of every single person? In other words, a stealth tax levied on everybody regardless of ability to pay, because if you tried to raise £175 billion this year in an honest way, by raising taxes, you’d be lynched?
State, (muttering), “We’re sick of these questions. Let’s go and do a BBC interview. “
Me, “Good idea, mention some bollocks about falling prices being a terrible evil while you’re there, they love that one! Bye!”
Printing money does not add one penny of real wealth to the economy. There is no magic money tree. Quantitative easing is simply theft by the government of your hard earned cash to bail out themselves and their financial entourage who destroyed our economy with their reckless greed. FUCK THEM AND FUCK THE GOVERNMENT.
Amount of “quantitative easing” sanctioned by the Bank of England so far: £175 billion
Now there’s a funny coincidence, eh?
If I started up my own printing press to churn out money and tried spending that money in the shops (even if my equipment produced notes that were indistinguishable from the “real thing”), I’d be liable to be arrested for the crime of counterfeiting.
Why is that?
The State would say, “Because your money isn’t real.”
I could retort, “My printing press produces currency that even your best experts cannot distinguish from that produced by the Royal Mint”.
The state responds, “It is not how accurate your copy of money is that gives it its value”.
Me, innocently, “Oh? So what is the problem with me printing money then?”
The state, “Ha! If you can just create money with a printing press at minimal cost, what value does it have? If everyone could do it, who would bother working? You would have obtained something for nothing! "
Me, “A good point. OK, so when the state creates money out of thin air, how does that add anything of value to the economy? Has not the state obtained something for nothing also?”
State, “Humph. Erm…”
Me, “I’m just a bit puzzled. Money creation by anyone is forbidden, because if it were permitted money would cease to have value. Yet when the state creates new money, it does have value? What’s so magic about your printing press?”
State, “Because we call ours QUANTITATIVE EASING”. Does that answer your question?
Me, “Not in the slightest.”
State, “QUANTITATIVE EASING!!! QUANTITATIVE EASING!!! TREMBLE BEFORE OUR INCOMPREHENSIBLE JARGON!!!”
Me. “Nope. I don’t think so. Just a thought – perhaps you know you cannot afford to borrow that £175 billion this year, so you’re simply printing off (electronically) the money you need, diluting the value of the pound in the pocket of every single person? In other words, a stealth tax levied on everybody regardless of ability to pay, because if you tried to raise £175 billion this year in an honest way, by raising taxes, you’d be lynched?
State, (muttering), “We’re sick of these questions. Let’s go and do a BBC interview. “
Me, “Good idea, mention some bollocks about falling prices being a terrible evil while you’re there, they love that one! Bye!”
Printing money does not add one penny of real wealth to the economy. There is no magic money tree. Quantitative easing is simply theft by the government of your hard earned cash to bail out themselves and their financial entourage who destroyed our economy with their reckless greed. FUCK THEM AND FUCK THE GOVERNMENT.
Monday, 7 September 2009
Turn those machines back on!
Randolph Duke: Now, some of our clients are speculating that the price of gold will rise in the future. And we have other clients who are speculating that the price of gold will fall. They place their orders with us, and we buy or sell their gold for them.
Mortimer Duke: Tell him the good part.
Randolph Duke: The good part, William, is that, no matter whether our clients make money or lose money, Duke & Duke get the commissions.
Mortimer Duke: Well? What do you think, Valentine?
Billy Ray: Sounds to me like you guys are a couple of bookies.
Randolph Duke: I told you he'd understand.
Trading Places, 1983
At the end of the glorious film Trading Places, Billy Ray Valentine and Winthorpe exact sweet revenge on the Duke Brothers by beating them at their own game on the Wall Street trading floor and taking them from fabulous wealth to ruin in a matter of minutes. After subjecting Billy Ray and Winthorpe to a ruthless “social experiment” for a bet worth just one dollar, it is a supremely satisfying conclusion. The greedy financiers who played fast and loose with a system they thought they owned were taught a hard lesson.
Ah, but.
It occurs to me a 21st century remake of Trading Places would be rather problematic, would it not? That satisfying ending might be somewhat ruined when the government decide Duke & Duke are “too big to fail” and provide them with a huge taxpayer funded “rescue”, resulting in Duke & Duke remaining in business and within months are gambling recklessly with investors money again and paying themselves huge bonuses. And laughing their tits off at the stupid pathetic proles paying for it all.
An ending that would, quite rightly, leave the audience furious, don’t you think?
Mortimer Duke: Tell him the good part.
Randolph Duke: The good part, William, is that, no matter whether our clients make money or lose money, Duke & Duke get the commissions.
Mortimer Duke: Well? What do you think, Valentine?
Billy Ray: Sounds to me like you guys are a couple of bookies.
Randolph Duke: I told you he'd understand.
Trading Places, 1983
At the end of the glorious film Trading Places, Billy Ray Valentine and Winthorpe exact sweet revenge on the Duke Brothers by beating them at their own game on the Wall Street trading floor and taking them from fabulous wealth to ruin in a matter of minutes. After subjecting Billy Ray and Winthorpe to a ruthless “social experiment” for a bet worth just one dollar, it is a supremely satisfying conclusion. The greedy financiers who played fast and loose with a system they thought they owned were taught a hard lesson.
Ah, but.
It occurs to me a 21st century remake of Trading Places would be rather problematic, would it not? That satisfying ending might be somewhat ruined when the government decide Duke & Duke are “too big to fail” and provide them with a huge taxpayer funded “rescue”, resulting in Duke & Duke remaining in business and within months are gambling recklessly with investors money again and paying themselves huge bonuses. And laughing their tits off at the stupid pathetic proles paying for it all.
An ending that would, quite rightly, leave the audience furious, don’t you think?
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