It is Obvious

Chris Rick has got altogether too much to say

…a lot of sheep and lemmings around as well

Posted by chrisrick13 on June 20, 2017

It is obvious: the Bank of England knows what it is doing

Mr Carney spoke yesterday.  There is plenty of analysis on the WWW.  He appointed a new external member of the MPC.  This is someone who has expressed views exactly in line with his – as difficult as they are to discern.

If I were Mr Carney I would do the same.  That is why I would expect that the choice of person would be out of his hands.

We have something that is at the heart of the economy of this country – the base rate.  The MPC sets the base rate and is now full of people who will do exactly what Mr Carney wants.  So we have handed the control of the economy to a Canadian chosen by a politician who is no longer around.

I have to go back to Tony Benn’s five rules of democracy

“What power have you got?”    Absolute.

“Where did you get it from?” Given by another individual…democracy?

“In whose interests do you use it?”    I don’t know but not the UK

“To whom are you accountable?”    Nobody.

“How do we get rid of you?”     Have to wait until your term is up or you decide to go.

It’s not as if he is any good at his job.  Look at his forward guidance and the forecasting record of the BoE.

What is happening is that there is a huge dislocation coming in the finance system of the world.  Those at the levers are merely delaying it instead of tackling the problem or preparing for the dislocation.  What they cannot do is ever to admit that there is a problem.  It is the emperor’s clothes in reverse.  Everyone can see it, just that those in charge have to deny it.

How and when it will happen I am unable to predict.  Greece might cause it.  Portuguese banks.  Italy.  The UK.  North Korea.  The result of the Lions test series.

What will happen in the UK is that there will be a run on the pound that is only defended by interest rate rises…which just cannot happen.  This would have millions kicked out of their houses.  I had a mortgage for many years when interest rates were in double figures.  For many who are ‘JAMs’ this will mean their mortgage payments will increase by a factor of 5.  Lots of barbed wire.  Back bedroom full of tins of baked beans.  Shotgun and lots of cartridges.

Don’t worry though – Mr Carney has it covered…until he cuts and runs.  Less than 2 years now.

It is obvious: the Bank of England knows what it is doing.  Exactly what Mr Carney wants it to for his best interest.

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