Governments forbid counterfeiting, as they forbid force, yet they practice both. Legal counterfeit blends with the genuine money supply and is indistinguishable from it. It is, therefore, more insidious and, through sheer volume, vastly more destructive of the power of the monetary unit than is illegal counterfeit. It inevitably manifests itself in higher prices of goods and services.
The public is bewildered by the higher prices, and it requires but slight propaganda by the author of the inflation, the Government, to deflect criticism onto private business which, in the end, is always obliged to bring the bad news of rising prices to the people. The public does not realize that it is, in effect, indirectly paying taxes over the merchant's counter instead of paying them directly to the tax collector.
The Government finds this a ready way to increase taxation without being detected.
p36
Flight from Inflation
The Monetary Alternative
by E.C. Riegel
An unelected bunch of technocrats, with their inflationist monetary policy, are levying a tax on us all. We are being systematically robbed by a "Central Committee", communist dictatorship style.
Talk is cheap, of course, and I wouldn't flatter myself that the criticisms I post on this blog causes the slightest bit of consternation among the ruling elites. Or for that matter, what is posted on much more widely read blogs than mine.
However, better late than never, parts of the fourth estate are growing ever more wary of peddling the Bank Of England's excuses about its woeful overshoot of the 2% CPI target and articles questioning The Bank's commitment to the target are becoming more frequent. Now even the Prime Minister has expressed his concerns. ("PM Actually Dares To Mention The Bank Of England Are A Pile Of Shit Shock!")
The game is up. Hey, guess what, it turns out that a massive government deficit that is monetised by the central bank is inflationary! Economics 101 anyone?
What really pisses me off is these Oxbridge pricks on six figure salaries were certainly quick enough to take the credit for hitting the inflation target during the easy years prior to the credit crunch, oh yes.
But when they continuously get it badly wrong when the going gets tough, then it's due to external factors outside their control! So it's not their fault. Wankers.
Maybe these cunts should read up a bit more on the Wiemar Republic and a bit less on the Great Depression, eh?
Expect some more "surprisingly high" inflation figures this year and I believe the CPI will hit 5% and more. Given that I (unlike the members of the Bank Of England Monetary Policy Committee) have been on a pay freeze for a number of years, I'd love to be proven wrong. But don't hold your breath folks.
Monday, 17 January 2011
Saturday, 4 December 2010
Bank Of England Chief Economist Spencer Dale just keeps on lying
So, inflation has been above target, is above target and will continue to be above target.
Conclusion? Well, if you're the Bank of England's Chief Economist, Spencer Dale, clearly the The Bank has not "gone soft" on inflation, in a recent speech at the Kent Business school:
"My single most important message is that the Monetary Policy Committee remains as hard-nosed as ever in its determination to hit the inflation target."
How stupid do you think we are, you parasitic, thieving, lying sack of shit.
The speech is basically a repeat of his presentation to the Cardiff Business School from this September, and I'm sure the same speech will need to be used, word for word, for many years to come. "Many years", in the Orwellian world of the ruling elites, being a period of time that can be defined as "temporary", apparently.
With inflation above target for so long, they keep trotting out the same old excuses. Let's have a look, shall we?
Excuse: The fall in the pound has led to higher import prices and this has caused upward pressure on inflation.
Problem: This is a big, if not the biggest excuse they keep wheeling out:. But...the pound has fallen because of the base rate dropping to 0.5% and being left there. Oh, who sets interest rates? Ooops, The Bank Of England of Course!
Conclusion: The Bank is responsible for the exchange rate depreciation and therefore responsible for the impact on prices. So to try and explain this as an unanticipated external shock is utter bollocks.
Excuse: Spare capacity means inflationary pressure is low. If anything, falling prices remain a dangerous possibility.
Problem: "spare capacity" is a Keynesian myth. It can't even be measured.Recessions hit "higher order", capital intensive industries hardest. The "lower order" consumer goods sector can quite easily fail to feel the same or indeed any pressure to lower prices. Of course, the Keynesian blunder is to lump millions of different economic agents into one amorphous "aggregate" and pretend it can be controlled all at once (always by a superior technocratic governing elite who know better than us ignorant proles of course).
Conclusion: Spare capacity cannot be accurately measured, controlled, or considered as a reliable bulwark against inflation. And even if you don't agree, the inflation figures speak for themselves: we have had CPI inflation consistently higher than during periods of the boom, in the depths of an economic slump.
And then there's the 200 billion of newly created money ("Quantitative Easing"), the inflationary effects of which, funnily enough, The Bank of England doesn't want to be part of the discussion.
Let's cut to the chase shall we? In close coordination with the British Government, The Bank is deliberately attempting to inflate the UK out of its problems. The missing of the inflation target is no accident. So why the speeches trying to convince us that The Bank is serious about keeping inflation on target when the evidence is so overwhelming to the contrary? Well, that's because they are terrified of a "wage-price spiral" whereby the working populace realises the scam that is in place (they are in fact always getting poorer because prices are being pushed ever higher) and so push for higher wages. Since wages are a cost too (from an employers perspective), this feeds into the price of goods which go higher...and so on. The Bank would prefer to steal from us through high inflation to bail out the bankrupt fractional reserve banking system and the bankrupt government, yet they also want people to not push for higher wages when they see that everything is ever more expensive. In other words, they want to have their cake and eat it. Hence the ongoing propaganda campaign: "Oh, er, no this above target inflation is TEMPORARY so no need to push for a pay rise or anything, OK? Please?". Trouble is, you might get away with that for a few months. But 4 years?
I repeat: how stupid do they think we are???
I'll leave you with the very end of Dale's September speech, because it's the one part of it that is actually true (albeit unintentionally):
"....the objectives of policy will be clear and unchanging: inflation, inflation, inflation. "
Quite.
Conclusion? Well, if you're the Bank of England's Chief Economist, Spencer Dale, clearly the The Bank has not "gone soft" on inflation, in a recent speech at the Kent Business school:
"My single most important message is that the Monetary Policy Committee remains as hard-nosed as ever in its determination to hit the inflation target."
How stupid do you think we are, you parasitic, thieving, lying sack of shit.
The speech is basically a repeat of his presentation to the Cardiff Business School from this September, and I'm sure the same speech will need to be used, word for word, for many years to come. "Many years", in the Orwellian world of the ruling elites, being a period of time that can be defined as "temporary", apparently.
With inflation above target for so long, they keep trotting out the same old excuses. Let's have a look, shall we?
Excuse: The fall in the pound has led to higher import prices and this has caused upward pressure on inflation.
Problem: This is a big, if not the biggest excuse they keep wheeling out:. But...the pound has fallen because of the base rate dropping to 0.5% and being left there. Oh, who sets interest rates? Ooops, The Bank Of England of Course!
Conclusion: The Bank is responsible for the exchange rate depreciation and therefore responsible for the impact on prices. So to try and explain this as an unanticipated external shock is utter bollocks.
Excuse: Spare capacity means inflationary pressure is low. If anything, falling prices remain a dangerous possibility.
Problem: "spare capacity" is a Keynesian myth. It can't even be measured.
Conclusion: Spare capacity cannot be accurately measured, controlled, or considered as a reliable bulwark against inflation. And even if you don't agree, the inflation figures speak for themselves: we have had CPI inflation consistently higher than during periods of the boom, in the depths of an economic slump.
And then there's the 200 billion of newly created money ("Quantitative Easing"), the inflationary effects of which, funnily enough, The Bank of England doesn't want to be part of the discussion.
Let's cut to the chase shall we? In close coordination with the British Government, The Bank is deliberately attempting to inflate the UK out of its problems. The missing of the inflation target is no accident. So why the speeches trying to convince us that The Bank is serious about keeping inflation on target when the evidence is so overwhelming to the contrary? Well, that's because they are terrified of a "wage-price spiral" whereby the working populace realises the scam that is in place (they are in fact always getting poorer because prices are being pushed ever higher) and so push for higher wages. Since wages are a cost too (from an employers perspective), this feeds into the price of goods which go higher...and so on. The Bank would prefer to steal from us through high inflation to bail out the bankrupt fractional reserve banking system and the bankrupt government, yet they also want people to not push for higher wages when they see that everything is ever more expensive. In other words, they want to have their cake and eat it. Hence the ongoing propaganda campaign: "Oh, er, no this above target inflation is TEMPORARY so no need to push for a pay rise or anything, OK? Please?". Trouble is, you might get away with that for a few months. But 4 years?
I repeat: how stupid do they think we are???
I'll leave you with the very end of Dale's September speech, because it's the one part of it that is actually true (albeit unintentionally):
"....the objectives of policy will be clear and unchanging: inflation, inflation, inflation. "
Quite.
Wednesday, 15 September 2010
False Economy: why central bank control of monetary policy caused the credit crunch and won’t help get us out of it
It is human nature to want things sooner rather than later – and that instinct, to be a bit morbid for a second, is probably based on the inevitability of death. “You might get run over by a bus tomorrow” as a justification for living for the moment has a genuine statistical truth to it. For most people, there are certain big ticket purchases (such as a house, for example) that would literally require more than a lifetime to save up to buy outright.
There is an answer, of course.
Borrowing.
Think of the interest rate as the extra premium, or price, you pay for having a sum of money right now. If you don’t have enough money, you can borrow it. The interest rate is the price you pay for not waiting – not saving. An entity that has funds already (another person, a bank, etc) can lend you the money and the interest is paid to them. Thus people without money but are prepared to pay extra to have it now, are brought together with people who already have money and would like a fee to loan it out.
Now, what happens when the government comes along and, instead of letting the market find an interest rate based on how many borrowers and savers there are, how much of a default risk borrowers are, etc, it says, “THE RATE OF INTEREST RATE MUST BE 0.5%”?
The same thing that always has, and always will happen when the government lowers the price of something below the market rate.
Rationing.
Savers are discouraged from saving. But lenders are still not going to lend to a default risk, even at zero interest rates. Low savings rate + reduced revenue from loans = lenders starved of funds.
The banks have had billions of our money thrown at them and they have effectively said, “what free money, don’t know what yer talking about mate” and walked away hands in their pockets whistling whilst the economy dies. If you inherited a fortune, would you want to squander it on lame investments just because the money was given to you? Of course not. That’s why low interest rates and even outright money printing won’t solve the problem. We need a real recovery based on real saving. Not a false economy based on worthless paper conjured out of thin air.
Government, of course, doesn’t want to face these hard truths. That would mean we, the hapless working stiffs who generate the real wealth in the economy would see clearly right now how much poorer we really are. The here and now is what Government cares about, because they need to get re-elected. If that means laying waste to our future, so be it. They don’t care. They’re not up for re-election in a decade. They’re up for re-election in a few years. So fuck the next generation, right?, And so the deficit financing and inflationary monetary policy continues – when Government faces an ugly truth about how little the economy can fund its parasitic activities it will always pick the easy option of robbing future generations through borrowing and the current generation through inflation, the ultimate stealth tax imposed by our contemptuous, unelected, scum sucking Central Bank.
But hey, that’s what you get when the same fucking morons who caused this mess are in charge of implementing the fix. Did the Bank of England monetary policy committee get sacked for totally failing to foresee the credit crunch (in fact, let’s tell it like it is, did they get sacked for causing the credit crunch?). No! In fact they are getting more powers to regulate the economy. The Central Wankers that caused this mess in the first place. What a fucking joke!
You won’t hear about any of this in the newspapers or on the TV by the way.
The truth is not out there. It’s right here. Keep watching.
This is Fuck The Government, signing off. Take care of yourselves, and each other.
There is an answer, of course.
Borrowing.
Think of the interest rate as the extra premium, or price, you pay for having a sum of money right now. If you don’t have enough money, you can borrow it. The interest rate is the price you pay for not waiting – not saving. An entity that has funds already (another person, a bank, etc) can lend you the money and the interest is paid to them. Thus people without money but are prepared to pay extra to have it now, are brought together with people who already have money and would like a fee to loan it out.
Now, what happens when the government comes along and, instead of letting the market find an interest rate based on how many borrowers and savers there are, how much of a default risk borrowers are, etc, it says, “THE RATE OF INTEREST RATE MUST BE 0.5%”?
The same thing that always has, and always will happen when the government lowers the price of something below the market rate.
Rationing.
Savers are discouraged from saving. But lenders are still not going to lend to a default risk, even at zero interest rates. Low savings rate + reduced revenue from loans = lenders starved of funds.
The banks have had billions of our money thrown at them and they have effectively said, “what free money, don’t know what yer talking about mate” and walked away hands in their pockets whistling whilst the economy dies. If you inherited a fortune, would you want to squander it on lame investments just because the money was given to you? Of course not. That’s why low interest rates and even outright money printing won’t solve the problem. We need a real recovery based on real saving. Not a false economy based on worthless paper conjured out of thin air.
Government, of course, doesn’t want to face these hard truths. That would mean we, the hapless working stiffs who generate the real wealth in the economy would see clearly right now how much poorer we really are. The here and now is what Government cares about, because they need to get re-elected. If that means laying waste to our future, so be it. They don’t care. They’re not up for re-election in a decade. They’re up for re-election in a few years. So fuck the next generation, right?, And so the deficit financing and inflationary monetary policy continues – when Government faces an ugly truth about how little the economy can fund its parasitic activities it will always pick the easy option of robbing future generations through borrowing and the current generation through inflation, the ultimate stealth tax imposed by our contemptuous, unelected, scum sucking Central Bank.
But hey, that’s what you get when the same fucking morons who caused this mess are in charge of implementing the fix. Did the Bank of England monetary policy committee get sacked for totally failing to foresee the credit crunch (in fact, let’s tell it like it is, did they get sacked for causing the credit crunch?). No! In fact they are getting more powers to regulate the economy. The Central Wankers that caused this mess in the first place. What a fucking joke!
You won’t hear about any of this in the newspapers or on the TV by the way.
The truth is not out there. It’s right here. Keep watching.
This is Fuck The Government, signing off. Take care of yourselves, and each other.
Wednesday, 28 July 2010
The Bank of England has abandoned the inflation target.
"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?
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, 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?
Sunday, 21 June 2009
Inflation targeting totally sucks balls, man
The more you think about what inflation targeting actually means as an economic policy, the more you realise how utterly absurd it.
Question: why is the price that we pay for all our goods and services, right now, so sacrosanct?
Let’s think about it. The remit of the Bank Of England is to set monetary policy so that the inflation rate, as measured by the Consumer Prices Index, is around 2%
The government likes to tell us that this is the level that achieves “stable prices”, which is odd because it actually means the value of money halves every generation. But hey, that’s another story. Anyway, the stats boffins go out there and measure prices in the shops of a basket of goods that the average consumer is deemed to buy (incidentally this basket of goods is forever changing, if nothing else because some things we can buy today didn’t even exist 50 years ago) then weighted (for example, a 100% increase in the price of a box of matches is treated as less important than a 100% increase in the price of petrol) and from this you get an index. There are various indices derived from this data, the present government has moved away from the Retail Prices Index (which rather oddly includes mortgage payments and so is ridiculously distorted by changes in interest rates) to the Consumer Prices Index (CPI).
So if you thought “2% inflation” means a straightforward 2% rise in prices, as you can see above it’s not as simple as that. It’s actually very difficult to determine what it means to talk about a “general price level” at all.
But no matter, let’s assume our inflation index is a worthwhile measure of price changes in our economy. OK, if the BoE has to target 2% CPI each year, what does that logically mean? Well, what they are saying is, today’s price level, whatever it is, is miraculously “correct” and next years price level, if 2% higher than this years (as they will do their level best to engineer with their monetary policy) will also be correct! And the year after, it will, oddly enough, be right for the price level to be another 2% higher. And so on. With the value of our money getting eroded all the while. On a fixed income? Oh look, in real terms you’re 10% worse off after 5 years! Brilliant!
It’s absurd to target the general price level and doing so is the cause of the current crisis.
Thanks to the Chinese industrial revolution, many of our goods have been falling in price in the past decade, and all other things being equal (i. e. without government interference), inflation should have been negative, but the BoE relaxed monetary policy to prevent the overall level of price rises ever falling below that sacred, mysteriously correct 2%.
The Bank deliberately engineered inflation in direct opposition to the economic fundamentals; in fact the government requires them to do this!
And so we ended up with a load of artificially cheap money with, to put it crudely, no where to go. Like squeezing on one end of a balloon, the funny money inflated into property and equities on a massive scale, balanced by the fall in consumer goods prices, so the Bank and the government could argue with a perfectly straight face inflation was “subdued” when house prices had tripled in just 10 years!
And notice how failure to hit the target in any year is “written off” in the targeting game. For example. the BoE has allowed inflation to exceed its 2% target for 20 months (and counting). And supposedly, we are going to see inflation below 2% in the next few years. But doesn’t that simply balance out the fact that it was above target previously? So it’s not a big deal? Well, they don’t seem to see it that way. Has to be 2% always, folks! Never, but never, let prices fall, even to correct a previous increase! See what I mean? As an economic policy it is literally nonsense. And there is absolutely no sign of them even thinking they need to look for an alternative.
Which means that to “cure” the credit crunch, they are repeating the idiotic monetary policy errors that got us into this mess in the first place. Which totally sucks balls.
Question: why is the price that we pay for all our goods and services, right now, so sacrosanct?
Let’s think about it. The remit of the Bank Of England is to set monetary policy so that the inflation rate, as measured by the Consumer Prices Index, is around 2%
The government likes to tell us that this is the level that achieves “stable prices”, which is odd because it actually means the value of money halves every generation. But hey, that’s another story. Anyway, the stats boffins go out there and measure prices in the shops of a basket of goods that the average consumer is deemed to buy (incidentally this basket of goods is forever changing, if nothing else because some things we can buy today didn’t even exist 50 years ago) then weighted (for example, a 100% increase in the price of a box of matches is treated as less important than a 100% increase in the price of petrol) and from this you get an index. There are various indices derived from this data, the present government has moved away from the Retail Prices Index (which rather oddly includes mortgage payments and so is ridiculously distorted by changes in interest rates) to the Consumer Prices Index (CPI).
So if you thought “2% inflation” means a straightforward 2% rise in prices, as you can see above it’s not as simple as that. It’s actually very difficult to determine what it means to talk about a “general price level” at all.
But no matter, let’s assume our inflation index is a worthwhile measure of price changes in our economy. OK, if the BoE has to target 2% CPI each year, what does that logically mean? Well, what they are saying is, today’s price level, whatever it is, is miraculously “correct” and next years price level, if 2% higher than this years (as they will do their level best to engineer with their monetary policy) will also be correct! And the year after, it will, oddly enough, be right for the price level to be another 2% higher. And so on. With the value of our money getting eroded all the while. On a fixed income? Oh look, in real terms you’re 10% worse off after 5 years! Brilliant!
It’s absurd to target the general price level and doing so is the cause of the current crisis.
Thanks to the Chinese industrial revolution, many of our goods have been falling in price in the past decade, and all other things being equal (i. e. without government interference), inflation should have been negative, but the BoE relaxed monetary policy to prevent the overall level of price rises ever falling below that sacred, mysteriously correct 2%.
The Bank deliberately engineered inflation in direct opposition to the economic fundamentals; in fact the government requires them to do this!
And so we ended up with a load of artificially cheap money with, to put it crudely, no where to go. Like squeezing on one end of a balloon, the funny money inflated into property and equities on a massive scale, balanced by the fall in consumer goods prices, so the Bank and the government could argue with a perfectly straight face inflation was “subdued” when house prices had tripled in just 10 years!
And notice how failure to hit the target in any year is “written off” in the targeting game. For example. the BoE has allowed inflation to exceed its 2% target for 20 months (and counting). And supposedly, we are going to see inflation below 2% in the next few years. But doesn’t that simply balance out the fact that it was above target previously? So it’s not a big deal? Well, they don’t seem to see it that way. Has to be 2% always, folks! Never, but never, let prices fall, even to correct a previous increase! See what I mean? As an economic policy it is literally nonsense. And there is absolutely no sign of them even thinking they need to look for an alternative.
Which means that to “cure” the credit crunch, they are repeating the idiotic monetary policy errors that got us into this mess in the first place. Which totally sucks balls.
Wednesday, 17 June 2009
You fucking liars
... our Great Depression is our lives. We've all been raised on television to believe that one day we'd all be millionaires, and movie gods, and rock stars. But we won't. And we're slowly learning that fact. And we're very, very pissed off.
- Tyler Durden, "Fight Club"
We have had to listen to so much continuous bullshit hand wringing about the looming “horror” of falling prices (I just hate it when things get more affordable, don’t you?) since the credit crisis hit, yet we are now into, wait for it, the 20th month of inflation being above the 2% target.
Can we hit a full two years of the Bank of England failing to do its job? It’s very possible.
It would seem, apparently, that they “overestimated” the deflation “threat”.
Yeah right.
Because they didn’t know that a 30% devaluation of the pound would be highly inflationary (don’t forget that while Britain is word class at churning out loads of chavs, estate agents and corrupt MPs it’s not so good at making useful stuff like tvs and washing machines which all need to be imported and a devaluation increases import prices).
They didn’t know that printing money raises prices higher than they otherwise would have been.
They didn’t know a massive fiscal deficit is inflationary.
OF COURSE THEY FUCKING WELL DID.
They are a bunch of lying cheating spivs who are fucking honest savers up the ass with their cheap credit money printing WANK economic policy. And I’m sick of the Keynesian liars in the press and on TV supporting this disastrous monetary policy that punishes the one single group who are blameless in this crisis: prudent savers.
They want inflation. They love it. They know our economy is just a weak, pathetic ponzi scheme that an extended period of zero inflation or even falling prices will expose for all to see. And then the game will be up, and too many ordinary people might start to wonder who is really benefitting in this country from our constant toil at shit jobs we don't even like.
- Tyler Durden, "Fight Club"
We have had to listen to so much continuous bullshit hand wringing about the looming “horror” of falling prices (I just hate it when things get more affordable, don’t you?) since the credit crisis hit, yet we are now into, wait for it, the 20th month of inflation being above the 2% target.
Can we hit a full two years of the Bank of England failing to do its job? It’s very possible.
It would seem, apparently, that they “overestimated” the deflation “threat”.
Yeah right.
Because they didn’t know that a 30% devaluation of the pound would be highly inflationary (don’t forget that while Britain is word class at churning out loads of chavs, estate agents and corrupt MPs it’s not so good at making useful stuff like tvs and washing machines which all need to be imported and a devaluation increases import prices).
They didn’t know that printing money raises prices higher than they otherwise would have been.
They didn’t know a massive fiscal deficit is inflationary.
OF COURSE THEY FUCKING WELL DID.
They are a bunch of lying cheating spivs who are fucking honest savers up the ass with their cheap credit money printing WANK economic policy. And I’m sick of the Keynesian liars in the press and on TV supporting this disastrous monetary policy that punishes the one single group who are blameless in this crisis: prudent savers.
They want inflation. They love it. They know our economy is just a weak, pathetic ponzi scheme that an extended period of zero inflation or even falling prices will expose for all to see. And then the game will be up, and too many ordinary people might start to wonder who is really benefitting in this country from our constant toil at shit jobs we don't even like.
Monday, 18 May 2009
“Trying to fucking con me you robbing cunt?” (Quantitative Easing Pt II)
He that is of the opinion money will do everything may well be suspected of doing everything for money.
Benjamin Franklin (1706 - 1790)
Money is so familiar to us it’s one of those things in life you don’t really think about, but the current financial crisis presents a rare opportunity to gain insight into the shockingly fraudulent underpinnings of our entire monetary system.
In all but the most primitive of economies, individuals will tend to have wants that exceed their own means to produce. For example, a hunter may need clothes, but his cloth manipulating skills may fall well below his hunting abilities. In this circumstance, the hunter could find someone good at making clothes, who are not good at catching food. The hunter gives the shirtmaker a leg of deer. In return the shirtmaker gives the hunter a shirt.
Barter has occurred.
So far so good. See the problem, though. You need to find someone who wants what you produce in order to swap it for something they produce. Not too convenient. You’re going to waste a lot of time playing the swapsies game. OK, so how about if we find something that everyone values already, make it portable, and work out what our produce is worth in terms of this proxy item? And of course, gold is a great choice, valued for itself as it is nice to look at, doesn’t rust and is rare. Make it into convenient to carry parcels (coins). Now decide how many coins a shirt, a piece of meat etc is work. Need a shirt? Just hand over the coins, you don’t need to have something that the shirtmaker wants. The value of the claim to a real resource is stored in the coins and the shirtmaker can hand them to someone else when they want something to cook for their dinner.
Simple. Ingenious. That’s what money has to be. Portable, widely accepted. A store of value.
Additionally, in the case of the gold coins, that money is worth something even without any claim on goods and services, i. e. it has intrinsic value.
Not so our modern money (or fiat money as it is called)
The “value” of our money is by government decree. Those pieces of paper and low quality metals in your wallet, or for that matter, electrons in a banks computer, are nearly worthless in of themselves. What gives modern fiat money value is the claim on goods and services it represents. If those goods and services do not exist, it does not have value.
Which brings is to the monetary policy of the government being pursued via their cronies in the Bank of England.
Their “quantitative easing” strategy, which let’s be clear is simply a modern equivalent of running the printing presses to create new money out of thin air, illustrates they don’t understand what money should be about at all.
The rationale of QE (that it can boost the economy when interest rates can be reduced no further because they are at or near zero) is easily demolished by a little thought experiment.
Take our simplified example above, where we only have the shirtmaker and the hunter (an entire economy consisting of just two individuals and two products). Let us further say that they are using modern, fiat money that has no intrinsic value, just like ours.
Now add a twist. The shirtmaker is also the monetary authority in this tiny economy. Yes, he holds the keys to the financial printing press! And one day he says, “Actually, I can’t really be bothered making shirts anymore. I’d like to just sit around and chill. What I’ll do is, I’ll turn on the printing press, print off a couple of crisp tenners to buy the leg of deer from the hunter, I get to eat, he gets his money and I’ve had to do fuck all in return. Sweet!”
So along comes the hunter. He has a leg of meat ready to sell and a couple of tenners ready to buy a shirt. He puts the leg of deer on the counter. “That’s twenty quid please, and here is twenty quid for a new shirt.”
The shirtmaker, sorry Central Bank Governor hands over twenty quid and reaches for the leg of meat. “Oh, by the way, sorry, I don’t make shirts anymore so I’ve got nothing to sell. You can put your money away”.
“Whoa, “, says the hunter, quickly putting the leg of deer back in his bag “so what am I supposed to spend my twenty quid on?”
“Erm.” Says the central bank governor. “Er…humph. Yes…well…Ah, I should say…er…in these difficult times I’m increasing liquidity in the financial system and -”
“Trying to fucking con me you robbing cunt?”, says the hunter. “Well, at least I won’t starve. Good fucking day to you.”
What happened? The shirtmaker, in his new role as central bank, created money with his printing press that was not backed by the creation of a real resource. Because there are only two players in this hypothetical economy, the attempted con job is immediately obvious to the innocent party in the tiny economy and the “Quantitative Easing” fails.
Just because our monetary systems is computerized and consists of millions of individuals making millions of transactions, Quantitative Easing (printing money) is a total rip-off in exactly the same way as the simplified scenario above, it’s just the fraud is much better disguised in the vast complexity of our economic system and they hope we won’t notice. With lots of economic entities involved, you don’t get outright refusal to accept the new money of course. The printed money ripples through the economy and devalues the purchasing power of the currency via higher prices. Those who got the newly created money first (can you guess who?) gain at the expense of those who get it last (can you guess who?)
So let’s all ask the Bank of England governor:
“Trying to fucking con me you robbing cunt?”
Benjamin Franklin (1706 - 1790)
Money is so familiar to us it’s one of those things in life you don’t really think about, but the current financial crisis presents a rare opportunity to gain insight into the shockingly fraudulent underpinnings of our entire monetary system.
In all but the most primitive of economies, individuals will tend to have wants that exceed their own means to produce. For example, a hunter may need clothes, but his cloth manipulating skills may fall well below his hunting abilities. In this circumstance, the hunter could find someone good at making clothes, who are not good at catching food. The hunter gives the shirtmaker a leg of deer. In return the shirtmaker gives the hunter a shirt.
Barter has occurred.
So far so good. See the problem, though. You need to find someone who wants what you produce in order to swap it for something they produce. Not too convenient. You’re going to waste a lot of time playing the swapsies game. OK, so how about if we find something that everyone values already, make it portable, and work out what our produce is worth in terms of this proxy item? And of course, gold is a great choice, valued for itself as it is nice to look at, doesn’t rust and is rare. Make it into convenient to carry parcels (coins). Now decide how many coins a shirt, a piece of meat etc is work. Need a shirt? Just hand over the coins, you don’t need to have something that the shirtmaker wants. The value of the claim to a real resource is stored in the coins and the shirtmaker can hand them to someone else when they want something to cook for their dinner.
Simple. Ingenious. That’s what money has to be. Portable, widely accepted. A store of value.
Additionally, in the case of the gold coins, that money is worth something even without any claim on goods and services, i. e. it has intrinsic value.
Not so our modern money (or fiat money as it is called)
The “value” of our money is by government decree. Those pieces of paper and low quality metals in your wallet, or for that matter, electrons in a banks computer, are nearly worthless in of themselves. What gives modern fiat money value is the claim on goods and services it represents. If those goods and services do not exist, it does not have value.
Which brings is to the monetary policy of the government being pursued via their cronies in the Bank of England.
Their “quantitative easing” strategy, which let’s be clear is simply a modern equivalent of running the printing presses to create new money out of thin air, illustrates they don’t understand what money should be about at all.
The rationale of QE (that it can boost the economy when interest rates can be reduced no further because they are at or near zero) is easily demolished by a little thought experiment.
Take our simplified example above, where we only have the shirtmaker and the hunter (an entire economy consisting of just two individuals and two products). Let us further say that they are using modern, fiat money that has no intrinsic value, just like ours.
Now add a twist. The shirtmaker is also the monetary authority in this tiny economy. Yes, he holds the keys to the financial printing press! And one day he says, “Actually, I can’t really be bothered making shirts anymore. I’d like to just sit around and chill. What I’ll do is, I’ll turn on the printing press, print off a couple of crisp tenners to buy the leg of deer from the hunter, I get to eat, he gets his money and I’ve had to do fuck all in return. Sweet!”
So along comes the hunter. He has a leg of meat ready to sell and a couple of tenners ready to buy a shirt. He puts the leg of deer on the counter. “That’s twenty quid please, and here is twenty quid for a new shirt.”
The shirtmaker, sorry Central Bank Governor hands over twenty quid and reaches for the leg of meat. “Oh, by the way, sorry, I don’t make shirts anymore so I’ve got nothing to sell. You can put your money away”.
“Whoa, “, says the hunter, quickly putting the leg of deer back in his bag “so what am I supposed to spend my twenty quid on?”
“Erm.” Says the central bank governor. “Er…humph. Yes…well…Ah, I should say…er…in these difficult times I’m increasing liquidity in the financial system and -”
“Trying to fucking con me you robbing cunt?”, says the hunter. “Well, at least I won’t starve. Good fucking day to you.”
What happened? The shirtmaker, in his new role as central bank, created money with his printing press that was not backed by the creation of a real resource. Because there are only two players in this hypothetical economy, the attempted con job is immediately obvious to the innocent party in the tiny economy and the “Quantitative Easing” fails.
Just because our monetary systems is computerized and consists of millions of individuals making millions of transactions, Quantitative Easing (printing money) is a total rip-off in exactly the same way as the simplified scenario above, it’s just the fraud is much better disguised in the vast complexity of our economic system and they hope we won’t notice. With lots of economic entities involved, you don’t get outright refusal to accept the new money of course. The printed money ripples through the economy and devalues the purchasing power of the currency via higher prices. Those who got the newly created money first (can you guess who?) gain at the expense of those who get it last (can you guess who?)
So let’s all ask the Bank of England governor:
“Trying to fucking con me you robbing cunt?”
Sunday, 19 April 2009
Scrappage, cont.
Well, let's hope the Chancellor reads this before he finalises his budget plans:
http://news.bbc.co.uk/1/hi/business/8003508.stm
Yep - it looks like that "successful" German scrappage scheme has had undesirable knock on effects!
Who'd have though it, eh?
http://news.bbc.co.uk/1/hi/business/8003508.stm
Yep - it looks like that "successful" German scrappage scheme has had undesirable knock on effects!
Who'd have though it, eh?
Monday, 13 April 2009
Scrappage crappage
Michael Cunningham: Your mother and I have decided to help buy you a new car.
Arnie Cunningham: That's what everyone wants isn't it? Well, fuck you. I'm fixing up Christine.
The credit crunch has certainly revealed some of the most stupid economic "management" you'll ever see, but the nonsense just keeps on coming.
A huge howler approaching in the next budget is the so called "scrappage" scheme. Whether this scheme is implemented will provide the ultimate yardstick into just how clueless these morons running the economy are.
What is "scrappage"? The basic outline is, any car owner taking their car aged 9 years or more to be scrapped will be given a voucher to the tune of £2000 that they can spend on a new car.
But is that what everyone wants?
1) That £2000 is paid for by everyone, in higher taxes (deferred to the future if they fund it by borrowing now as they presumably will) or inflation (if they fund it with some of that "quantitative easing") whether they use a car or not. Fair?
2) Secondhand values are distorted upwards, as they will now have a falsely allocated state subsidised "voucher value" - so a low income person who wants a cheap motor would have to pay more. Fair?
3) People who were quite happy with their old car, now rush to buy a new one to get the subsidised price. That means they don't spend money on other purchases they would otherwise have made - so the car industry gains at the expense of other businesses. Fair?
4) All of our mass market cars are made by foreign owned firms, so most of the benefit will go to foreign business (there will be only a small spin off benefit to some British firms). Fair?
5) These car firms handing round the begging bowl for taxpayers help are the first to complain about government interference, taxation and "red tape" during the good times but now they want our money, and lots of it. Fair?
Now, don't think for a second government ministers won't be made aware of how this interference in the market will cascade through the economy. They might be stupid, but one thing they are not is ill informed. So if they do go ahead and introduce this horrendous scheme, you know that they have ruthlessly chosen to help the car industry at the collective expense of the whole country and indeed the poor. Shitters.
We'll see in the budget whose side they are on. And if you hear a lot of talk from the chancellor about "the environment", watch your wallet.
Tuesday, 7 April 2009
Expense…justified
So Jacqui Smith’s husband has been watching porn at the taxpayer’s expense? A disgrace, is it?
Erm…
Ooooh. That is fucking rank.
I say, at a cost of £0.00000000000001 per taxpayer you can have this one my friend.
Wank on, Dick, wank on.
Erm…
Ooooh. That is fucking rank.
I say, at a cost of £0.00000000000001 per taxpayer you can have this one my friend.
Wank on, Dick, wank on.
Wednesday, 25 March 2009
Deflation, what deflation?
"The trifling economy of paper, as a cheaper medium, or its convenience for transmission, weighs nothing in opposition to the advantages of the precious metals... it is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted." --Thomas Jefferson
The government and the ever compliant “independent” media are softening us with weekly propaganda so we are supposed to feel grateful because they are trying everything they can think of to stop things getting cheaper, but there has been a slight mishap.
The rate of inflation just went up!
That’s right folks, deflation is the big concern apparently but, ooops, the CPI actually rose to 3.2%!
That’s above the 2% target, yet they’re taking measures like it’s already below.
Ah, but, they are so clever though. You see, they are fighting next year’s problem. They can predict what’s going to happen and - oh hang on. No they can’t. They failed to see the credit crunch didn’t they? In fact, thinking about it, it looks suspiciously like they don’t have a fucking clue.
So how can we trust them when they say that deflation is the real threat? The government is in a shit load of debt and, just as with individuals holding loans; inflation is a great way to crush the real terms value of that debt. Hey, I owe a 100,000 mortgage that I can't pay back but thanks to Gordon Brown, in 2010 100 grand will be the cost of a loaf of bread! You get the idea. Obviously savers will be wiped out, but hey, the Keynesians think savers are scum and it is credit that is the route to prosperity (just like a drug addict can be cured with more drugs, right?) so what the fuck, eh?
The government and the ever compliant “independent” media are softening us with weekly propaganda so we are supposed to feel grateful because they are trying everything they can think of to stop things getting cheaper, but there has been a slight mishap.
The rate of inflation just went up!
That’s right folks, deflation is the big concern apparently but, ooops, the CPI actually rose to 3.2%!
That’s above the 2% target, yet they’re taking measures like it’s already below.
Ah, but, they are so clever though. You see, they are fighting next year’s problem. They can predict what’s going to happen and - oh hang on. No they can’t. They failed to see the credit crunch didn’t they? In fact, thinking about it, it looks suspiciously like they don’t have a fucking clue.
So how can we trust them when they say that deflation is the real threat? The government is in a shit load of debt and, just as with individuals holding loans; inflation is a great way to crush the real terms value of that debt. Hey, I owe a 100,000 mortgage that I can't pay back but thanks to Gordon Brown, in 2010 100 grand will be the cost of a loaf of bread! You get the idea. Obviously savers will be wiped out, but hey, the Keynesians think savers are scum and it is credit that is the route to prosperity (just like a drug addict can be cured with more drugs, right?) so what the fuck, eh?
Wednesday, 18 March 2009
Deflation? Yeah. And. So. What.
Food getting cheaper. Good or bad?
Cars getting cheaper. Good or bad?
Fuel getting cheaper. Good or bad?
Electronics getting cheaper. Good or bad?
If you answered “good” to the above, you’re probably an ordinary, sensible individual.
If you answered “maybe…possibly bad” you’re probably one of the Keynesian fuckwits in government running economic policy or a journalist writing in the popular press.
Now technically, deflation is a contraction of the monetary base, and falling prices are a symptom of deflation, not the deflation itself, but no matter, we’ll discuss deflation using the mass media’s definition, as falling prices.
Somehow, they are trying to convince us that things getting cheaper, is a bad thing. You may have thought they are cleverer than you, that they have spotted some subtle insidious evil behind what is surely a good thing, thanks to their superior intellect and economic training.
Nope. What you instinctively feel is right, is right. But you see, they have ulterior motives for preventing falling prices.
Deflation strikes terror into the hearts of the ruling elites, even though falling prices leaves exactly those sections of society that deserve it the most, better off.
The problem is, our entire monetary system is systemically dependent on debt, which is subsidised by inflation. If we get into a deflationary situation, the whole pyramid scheme that is our fiat money system becomes dangerously exposed.
Watch out for one of those anti deflation articles in the popular press, or a feature on the BBC. There’s a pattern.
It usually starts along the lines of, “falling prices, you’d think they are a good thing, wouldn’t you?”
Er, yes, funnily enough, I’d rather pay less for things than more, I’m weird like that.
Then you’ll get:
“But if sustained, consumers will defer their purchases waiting for prices to fall further and this becomes a negative feedback cycle”
This is utter bullshit.
Do flat panel TVs sell? Do mobile phones sell? Do computers sell?
We all know there is something better round the corner that will be cheaper but we still buy these things.
“Deflation raises the real value of borrowers’ debt”
That is correct. Simple response: good. Guess what, the mess we are in right now is because credit was and is too cheap. We need less borrowing and more saving. Unfortunately, the Keynesians are in charge (that would be the shit-eating cock-knockers who got us into this mess in the first place) and they hate savers (who benefit from deflation).
"So the quantitative easing policy is essential to avoid the awful prospect of deflation"
Printing money that is not backed by an increase in real resources won't help when prices are falling, rising, staying the same or slightly moist. Only the disciples of the something for nothing prat economist J. M. Keynes believe otherwise.
In summary, the government is doing everything possible to stop your cost of living going down, and the mass media are day in, day out, running pieces to convince you this is a good thing.
I’ll let you decide whose interests they are looking after.
Cars getting cheaper. Good or bad?
Fuel getting cheaper. Good or bad?
Electronics getting cheaper. Good or bad?
If you answered “good” to the above, you’re probably an ordinary, sensible individual.
If you answered “maybe…possibly bad” you’re probably one of the Keynesian fuckwits in government running economic policy or a journalist writing in the popular press.
Now technically, deflation is a contraction of the monetary base, and falling prices are a symptom of deflation, not the deflation itself, but no matter, we’ll discuss deflation using the mass media’s definition, as falling prices.
Somehow, they are trying to convince us that things getting cheaper, is a bad thing. You may have thought they are cleverer than you, that they have spotted some subtle insidious evil behind what is surely a good thing, thanks to their superior intellect and economic training.
Nope. What you instinctively feel is right, is right. But you see, they have ulterior motives for preventing falling prices.
Deflation strikes terror into the hearts of the ruling elites, even though falling prices leaves exactly those sections of society that deserve it the most, better off.
The problem is, our entire monetary system is systemically dependent on debt, which is subsidised by inflation. If we get into a deflationary situation, the whole pyramid scheme that is our fiat money system becomes dangerously exposed.
Watch out for one of those anti deflation articles in the popular press, or a feature on the BBC. There’s a pattern.
It usually starts along the lines of, “falling prices, you’d think they are a good thing, wouldn’t you?”
Er, yes, funnily enough, I’d rather pay less for things than more, I’m weird like that.
Then you’ll get:
“But if sustained, consumers will defer their purchases waiting for prices to fall further and this becomes a negative feedback cycle”
This is utter bullshit.
Do flat panel TVs sell? Do mobile phones sell? Do computers sell?
We all know there is something better round the corner that will be cheaper but we still buy these things.
“Deflation raises the real value of borrowers’ debt”
That is correct. Simple response: good. Guess what, the mess we are in right now is because credit was and is too cheap. We need less borrowing and more saving. Unfortunately, the Keynesians are in charge (that would be the shit-eating cock-knockers who got us into this mess in the first place) and they hate savers (who benefit from deflation).
"So the quantitative easing policy is essential to avoid the awful prospect of deflation"
Printing money that is not backed by an increase in real resources won't help when prices are falling, rising, staying the same or slightly moist. Only the disciples of the something for nothing prat economist J. M. Keynes believe otherwise.
In summary, the government is doing everything possible to stop your cost of living going down, and the mass media are day in, day out, running pieces to convince you this is a good thing.
I’ll let you decide whose interests they are looking after.
Saturday, 7 March 2009
Quantitative Easing – The con is on
So it’s come to this. What is Quantitative Easing? Well, the Bank of England will buy government and corporate bonds from commercial banks, and pay for them by increasing the value of the reserves that they hold bla bla bla bla.
Let me tell you something.
It’s printing money, is what it is. It’s Tommy Coopernomics. Conjuring money out of thin air. And if that was an easy solution to financial crises, Zimbabwe would be the richest country in the world. Just like that.
There can only be one consequence of printing money, prices will be pushed higher than they otherwise would be if the new money had not been created.
What this does is, it transfers resources to those who receive the funny money first (oh, that would be the banks by the way, is that ok?) from the people who get to spend it last, when it’s too late, because prices by then have risen proportionately to cancel out the benefit of the extra cash. Who are those people? The humble proles of course, the PAYE slaves and former slaves living off their (now devalued) pensions.
Let me make it clearer. Imagine if, right now, the government announced a new policy to avert the depression: that they were going to increase income tax, and the extra revenue would be given to the banks, as a free gift, for them to lend out as they saw fit. There would be uproar! But the net effect of QE is the same.
So what on earth are they playing at, and how do they think they can get away with it?
Well, if they think the general public won’t see that the policy is printing money, the media has put paid to that, with just about every newspaper headline reading something like “Government begins quantitative easing, or ‘printing money’”. No, their inflationary free money giveaway policy will be hidden behind falling or stable prices.
If that sounds like a nonsensical statement, allow me to explain. Let’s say the governments preferred inflation measure, the CPI, goes negative (it’s still above target at the time of writing incidentally, a fact not pointed out often enough in a media talking as if the CPI has gone negative already). This, apparently, would be terrible. Imagine, things are getting cheaper. How awful! (Don’t get me started on this one, we’ll come back to this in another post!). OK. So, they print money. Instead the price level changes year on year by +2%. Hurray! Bank has hit its inflation target! But hey, what if prices as measured by the CPI would have fallen by 2% (i. e. a negative CPI), if QE hadn’t been undertaken?
Well, anyone with savings or unable to negotiate a pay rise, just lost out by 4%, all the while the Bank of England would be saying they got things back on track with 2% inflation.
So why do they hate savers and people who can’t get a pay rise?
Short answer.
The governing elites are a bunch of cunts.
Long answer, look out for my next post about falling prices (currently being wrongly referred to as “deflation” in the media).
Let me tell you something.
It’s printing money, is what it is. It’s Tommy Coopernomics. Conjuring money out of thin air. And if that was an easy solution to financial crises, Zimbabwe would be the richest country in the world. Just like that.
There can only be one consequence of printing money, prices will be pushed higher than they otherwise would be if the new money had not been created.What this does is, it transfers resources to those who receive the funny money first (oh, that would be the banks by the way, is that ok?) from the people who get to spend it last, when it’s too late, because prices by then have risen proportionately to cancel out the benefit of the extra cash. Who are those people? The humble proles of course, the PAYE slaves and former slaves living off their (now devalued) pensions.
Let me make it clearer. Imagine if, right now, the government announced a new policy to avert the depression: that they were going to increase income tax, and the extra revenue would be given to the banks, as a free gift, for them to lend out as they saw fit. There would be uproar! But the net effect of QE is the same.
So what on earth are they playing at, and how do they think they can get away with it?
Well, if they think the general public won’t see that the policy is printing money, the media has put paid to that, with just about every newspaper headline reading something like “Government begins quantitative easing, or ‘printing money’”. No, their inflationary free money giveaway policy will be hidden behind falling or stable prices.
If that sounds like a nonsensical statement, allow me to explain. Let’s say the governments preferred inflation measure, the CPI, goes negative (it’s still above target at the time of writing incidentally, a fact not pointed out often enough in a media talking as if the CPI has gone negative already). This, apparently, would be terrible. Imagine, things are getting cheaper. How awful! (Don’t get me started on this one, we’ll come back to this in another post!). OK. So, they print money. Instead the price level changes year on year by +2%. Hurray! Bank has hit its inflation target! But hey, what if prices as measured by the CPI would have fallen by 2% (i. e. a negative CPI), if QE hadn’t been undertaken?
Well, anyone with savings or unable to negotiate a pay rise, just lost out by 4%, all the while the Bank of England would be saying they got things back on track with 2% inflation.
So why do they hate savers and people who can’t get a pay rise?
Short answer.
The governing elites are a bunch of cunts.
Long answer, look out for my next post about falling prices (currently being wrongly referred to as “deflation” in the media).
Thursday, 5 March 2009
Bullshit, Mr Brown
So, Gordon Brown has refused to acknowledge any responsibility for the financial crisis.
http://www.telegraph.co.uk/news/newstopics/politics/gordon-brown/4936712/Gordon-Brown-refuses-to-apologise-for-economic-crisis.html
Apparently, it’s a global problem.
OK, in that case, let’s have a look at average UK house prices under the Labour government up to the credit crunch.
What’s wrong with this picture? Do I see house prices increased threefold? Yes I do. So you didn’t think anything was amiss Mr Brown? You didn’t think anything needed to be done?
Of course, you did implement some measures, didn’t you? You took action. And you made things even worse:
Because with the introduction of CPI targeting you changed the inflation measure so it excluded housing (after all, housing is only the premier expense of the average citizen, so why include such a trivial cost in the inflation figures eh? Good one.). You also validated the asset inflation by raising the stamp duty threshold (thus cementing in the public mind the idea that rising house prices are as natural a process as the sun rising every morning) . Oh, and let’s not forget your bollocks shared ownership scheme – which says “we’re not going to do a damn thing about housing being too expensive in the first place for pretty much every first time buyer in the land, but instead you can own a little bit of a hugely overpriced property and pay rent on the rest”.
But I digress, Mr Brown. May I ask, did the Northern Rock 125% mortgages ring any alarm bells? No? The 2004 BBC documentary "Mortgage Madness" investigating the self cert scandal cause any sleepless nights at all? No, nothing? Too busy collecting all that extra stamp duty eh?
Meanwhile, friends, colleagues and family, much less well remunerated and educated than our fine governing elites had spotted that something was amiss years ago (I can still remember a colleague remarking in 2003 when we were discussing the housing market, “It’s a frenzy!”)
Not to blame? With the greatest of respect, Prime Minister: get to fuck.
http://www.telegraph.co.uk/news/newstopics/politics/gordon-brown/4936712/Gordon-Brown-refuses-to-apologise-for-economic-crisis.html
Apparently, it’s a global problem.
OK, in that case, let’s have a look at average UK house prices under the Labour government up to the credit crunch.
What’s wrong with this picture? Do I see house prices increased threefold? Yes I do. So you didn’t think anything was amiss Mr Brown? You didn’t think anything needed to be done?Of course, you did implement some measures, didn’t you? You took action. And you made things even worse:
Because with the introduction of CPI targeting you changed the inflation measure so it excluded housing (after all, housing is only the premier expense of the average citizen, so why include such a trivial cost in the inflation figures eh? Good one.). You also validated the asset inflation by raising the stamp duty threshold (thus cementing in the public mind the idea that rising house prices are as natural a process as the sun rising every morning) . Oh, and let’s not forget your bollocks shared ownership scheme – which says “we’re not going to do a damn thing about housing being too expensive in the first place for pretty much every first time buyer in the land, but instead you can own a little bit of a hugely overpriced property and pay rent on the rest”.
But I digress, Mr Brown. May I ask, did the Northern Rock 125% mortgages ring any alarm bells? No? The 2004 BBC documentary "Mortgage Madness" investigating the self cert scandal cause any sleepless nights at all? No, nothing? Too busy collecting all that extra stamp duty eh?
Meanwhile, friends, colleagues and family, much less well remunerated and educated than our fine governing elites had spotted that something was amiss years ago (I can still remember a colleague remarking in 2003 when we were discussing the housing market, “It’s a frenzy!”)
Not to blame? With the greatest of respect, Prime Minister: get to fuck.
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