Who is the King?
Mervyn is his name and he controls the switch…
The interest rate switch for the Bank of England that is.
And right now he remains resolute and doesn’t touch it at all.
Disregarding the shrill calls for making contact, mighty Mervyn keeps his cool and his counsel.
His reasoning is impeccable too, because his old fashion ideas do make absolute Macro Economic sense.
To act against the Economy and raise interest rates now would be preempting any green shoots for growth and will stifle any employment gains immediately. It would also make new industrial and tech activity still born. This much is evident.
But still, why so many bankers – fearful and unimaginative – call for the immediate raising of the Bank’s Prime interest rate?
They say they are afraid of a projected 4% inflation and want to protect their cash…
They want to protect their ill gotten gains from Bank’s new found strength after a public bailout. That is all of what they want to save. The Cash, more than anything else.
Self serving bastards they are if they fail to consider the public angst and the sovereign debt that the country needs to address.
Didn’t hear of any Tory banker giving up their bonus cash to help reduce the sovereign debt and help alleviate the national debt crisis. Have You?
That would have been a righteous act.
But instead the Bankers and Osborne found a cozy understanding. Don’t touch the bonuses and we won’t finance New Labour again. Simple as that…
Red freaking Bollocks.
People are calling for their heads in a plate…
Even Tories and within the government call for the same.
But the high standing Tories and their Bankers – crucially and unthinkingly – are only calling for interest rate increases, forgetting that the Coalition government has got to nurture and protect economic growth.
And most crucially forgetting to bring forth and germinate a single idea about how to generate growth in the economy.
And they haven’t even bothered to jump start economic growth and bring jobs i the economy.
I mean good paying jobs, besides asking everyone else to volunteer in some Big Society - hair brained opium den born idea – while Cameron, Osborne and Clegg play with Larry the cat.
They dream and wake up and still play with mouse hunting Larry, the old fashioned game ”The three odd men out.”
Ah yes and all the while, engaging in some economy damaging greenwashing, talking about the greenest government ever.
Yeah right.
The greenest government ever, is the one that wants to sell off to the timber interests the venerable British forests. They even want to privatize the green lungs of the country so they can be destroyed. Just when we needed the forests the most, here come the ignoble and ignorant Cameroonians + Nick the Bleak, and they want to clear cut the lot.
Now how daft can this gang get?
Ideology is one thing, but stupidity is another and it’s clearly measurable with the proper Doctor’s help, up in Harley street. Do you want me to make you an appointment?
I hear they perform lobotomies on the cheap and cheerful…
Why not?
It’s one way the PM can have the same intellectual width and thickness as the old steely Maggie presently has. Because he surely acts as if a victim of a sudden lobotomy, or an Alzheimer’s patient on these issues.
But Mr King is still of a solid mind so I would prefer to leave the game up to him.
And based on that all the talk in the City, was of three rate rises by the end of the year after Bank of England Governor Mervyn King revealed in a letter to the Chancellor that inflation would return to target “under the assumption that Bank rate increases in line with market expectations”.
Yet last November, the market was pricing in a single quarter point inflation rise by December. On Monday, it was suggesting rates would hit 1.25%. So, ran the thinking, and the Bank was facing a busy year.
And although, the prevailing wisdom ran contrary to Mr King, He declared unequivocally that a rate rise was not in the cards. And he send thus a clear message to the bankers that if they want to protect the value of the cash i hand they better lend it out to help businesses cause production and hire hands to move the tools and produce goods. An age old wisdom that Mr King carries on today. For if the bankers are allowed to just sit on idle cash why do we expect that the economy s gonna rise up and start cranking out widgets? While cracking down on unemployment also…
He actually said that an interest rate rise should not be a foregone conclusion calling out the fearful loudly to come out and pray in the altar of high finance. He told clearly to the Bankers to do their job. Lend money and take risks in exchange for interest payment:
“Some people are running ahead of themselves, saying that we are pre-announcing or laying the ground for a rate rise. That decision has not been taken and won’t be taken until we get to the next meeting or the following meeting. It may be many quarters before we do anything.”
Steady on…
King went on to say: ”Events change very quickly, so let’s wait and see. Any decision will depend on the facts at the time.”
And judging by the wild reaction over the past two weeks to the riddles coming out of the Bank of England, markets don’t know what to think. Or at least the Bankers and the City traders don’t know what to do…
Yet everyone is looking to them for guidance.
But King remains unmoved and in his letter to the Chancellor on Monday, and the Inflation Report yesterday, he makes it clear that interest rates will have to rise by one percentage point over the next year to just stop inflation spiralling further.
It may well be that when the MPC does finally vote to raise rates, in May for instance, the Governor of the Bank of England finds himself on the side of the minority who oppose such a move.
That will cause a predictable stir but would reflect the difficulty the committee faces in setting monetary policy.
All the attention, as far as the health of the economy is concerned, is focused on King and his rate setters at the moment and people fail to see where the wind is really blowing. Because King and his Bank of England, colleagues and interest rate setters, have a crucial job to do but have only very limited tools at their disposal.
Where is the government action in this one?
Because it is the other three stooges, at Downing Street No 10 and No 11 that need to get us a deliverable Economic growth policy for UK, the soonest.
Still while King seems to be shouldering all our economic woes at the moment, it isn’t his job alone, to deliver growth or protect us from still born employment rises.
But King does that as well as offering the warnings necessary for the little folks to protect themselves from the ravages of inflation too. He simply said: ”Households should start preparing for interest rate rises because the squeeze on living standards will happen one way or another.”
That simple statement empties the ideological strength of the Tory Coalition into the garbage heap of History, in a clean swift blow. It does so in a technocratic clarity and simplicity, powerful enough, more than any verbose debate society demagoguery.
Because, Data talks best…
How is that working for You?
And how is it working for the Big Society aspirations, at the same time that the current bumper crop of Banker-Wanker bonus greed, exceed all the value of economic growth sported in the UK since the crash.
Seven Billion that is…
That obviously is a social problem of major proportions; but the three stooges choose to ignore and forget History at YOURS & our own peril.
And as far as Chancellor Osborne’s ”Plan Merlin,” to rein in and appease the fat cat bankers goes: Phooey to You too George…
And so thinks King too. As his smart quip proves when he rejected Banker’s calls for a token interest rate rise apparently ”to quell concerns” about the Bank’s inflation-fighting credibility. He delivered this Bonhomie as a clear shot across the bow of the Tory leaky ship, and their non sensical mad-mud movements through limping sails; describing such a move as a “futile gesture”.
Mr King with wry humour said: “That argument reminds me a of a sketch in Beyond the Fringe, where the senior military leader says, ‘It’s time for a futile gesture. It will raise the whole tone of the war.’
”Well, we’re not in the business of futile gestures.
Our credibility will depend in the long run on the economic outcomes.
And at present whether our explanations make sense to people.”
Right on buddy.
And by the way, do you think Mr Cameron, Clegg and Osborne are listening?
Or are they smart enough to be getting it?
Yours,
Pano
PS:
And what about debt?
Seems this week’s archaeological discovery about the rampant Cannibalism of early Britons explains the societal imbalances today.
Cause if the Tories and the Bankers keep this up, the people will rise up and actually EAT the Bankers with the Tories as appetizers.
And please, don’t say King – the old geezer – didn’t warn you..
Eh?
