Probably no new stuff today…


David Davis

…unless Fred Bloggs, Mummylonglegs or Sean Gabb can find the government’s trousers-of-the-day, and tear them off. I have several tasks, mostly unpleasant or at least euphorially-unrewarding, to perform instead.

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4 responses to “Probably no new stuff today…

  1. Steven Northwood

    I just wanted to float this to be sure of my grasp of the banking system.

    Every bank in the UK has the right to open a current account with the Bank of England, and the Bank of England offers the banks, its customers, things such as overdrafts and loans and so forth. The banks, doing what they are in business to do, borrow money from the Bank of England in order to function, that is to lend to people and provide mortgages and so on.

    If it looks like there’s an economic downturn coming, the Government tells the Bank of England to lower the interest rates on its loans and overdrafts, in order to encourage the banks to borrow and then lend to us, thus keeping new capital in the economy.

    What I wanted to ask is, is that right? Am I missing anything there or have I got anything wrong? I’d be grateful for advice anyone.

  2. Well, that would be all right if it was all right also for the Central Bank to do “quantitative easing” – which is to say, “printing” (well not on the cotton stuff in actuality but merely “releasing” it electronically to “Banks”) money, which of course is money that has not previously existed.

    Then, prices would not rise __if__ the amount of goods and services being geenrated or offered in the economy was also going up.

    But it __can’t__ go up while GramscoFabiaNazis run the government and prevent this happening because they hate enterprise.

    Therefore the policy you have outlined, if done under a ZanuLieBorg state, guarantees inflation and high interest rates later on.

  3. Steven Northwood

    I agree that it creates inflation and high interest rates, on your authority really, but is the fundamental structure correct? I mean, banks actually do have ‘current accounts’ with the Bank of England and so on?

    If so, then your example of ‘quantiative easing’ is probably one form of the stealth tax or inflation tax. As opposed to the Chancellor just picking up the phone and calling the Central Bank to tell them to warm up the presses.

    You know, in a sick kind of way I’d love to make that call, having just breezed to power, all Topman and Clarks, one generation out of the mines. “Come on, get them printing screens polished, I wanna f**kin shave in em!”

    Oh, bad, too bad. I’m going straight the Hell. ;-)

  4. Never mind Steven, we will just all have to work harder.