Friday, November 16, 2007
A King's Ransom
He is apparently a brilliant economist.For me he is also the least able central banker in the developed world.
The governor has announced that there are likely be a number of rate cuts in 2008.Apparently this will be achieved despite the fact that oil prices are hovering around an all time high with no sign of weakness in the near term and metal prices and agricultural commodity prices are also increasing.All this indicates a 2008 environment of higher inflation and stagnant economic growth.Stagflation even.
The Bank of England's mandate is to be vigilant on inflation.Lowering rates in future won't achieve this.I have no idea what Mr King is talking about.I'm wondering whether he does either.
His performance this year doesn't fill me with confidence.
Let's look at the list of his recent achievements in 2007.Keeping inflation under control.Failed,had to write letter to chancellor.Oops.
Not pumping liquidity into capital markets when appropriate. Unlike the Fed and ECB,he didn't bother.This may have stopped the first run on a bank for 140 years.
Northern Rock,the farcical shenanigans and volte face on 'moral hazard' that led to systemic loss of confidence in UK banks & regulators.
Radio 4 interview,''I'm not to blame really,it's just l was ''bullied'' by Darling et al.
On balance I'm not sure a second term for the governor is appropriate.Given his recent musings,something tells me things are about to get worse on his next watch.In the land of the blind the one eyed man is king.
RB
The governor has announced that there are likely be a number of rate cuts in 2008.Apparently this will be achieved despite the fact that oil prices are hovering around an all time high with no sign of weakness in the near term and metal prices and agricultural commodity prices are also increasing.All this indicates a 2008 environment of higher inflation and stagnant economic growth.Stagflation even.
The Bank of England's mandate is to be vigilant on inflation.Lowering rates in future won't achieve this.I have no idea what Mr King is talking about.I'm wondering whether he does either.
His performance this year doesn't fill me with confidence.
Let's look at the list of his recent achievements in 2007.Keeping inflation under control.Failed,had to write letter to chancellor.Oops.
Not pumping liquidity into capital markets when appropriate. Unlike the Fed and ECB,he didn't bother.This may have stopped the first run on a bank for 140 years.
Northern Rock,the farcical shenanigans and volte face on 'moral hazard' that led to systemic loss of confidence in UK banks & regulators.
Radio 4 interview,''I'm not to blame really,it's just l was ''bullied'' by Darling et al.
On balance I'm not sure a second term for the governor is appropriate.Given his recent musings,something tells me things are about to get worse on his next watch.In the land of the blind the one eyed man is king.
RB
