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Tag Archives: Central Banking

Will the Chancellor back a Competition Commission inquiry into LIBOR setting?

Before I left Westminster on Thursday, I submitted this written question to the Chancellor for answer on 2 July: Steve Baker (Wycombe): To ask Mr Chancellor of the Exchequer, if he will make an assessment of the need for a Competition Commission inquiry into the routine procedures for setting LIBOR. via the Order Book Combined [2 July 2012 (the ‘Questions Book’)]. With Sir Mervyn King calling for the key market price of LIBOR to be set by a market, there is […]

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The limits to monetary activism are being acknowledged

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Via Bank of England’s money printing is putting UK economy at risk – Telegraph: In its annual report, the Swiss-based Bank for International Settlements (BIS) warned that artificially low rates and inflated asset prices could also be holding back growth by masking lenders’ bad debts and deterring them from cleaning up their balance sheets. “Prolonged and aggressive monetary accommodation may delay the return to a self-sustaining recovery,” BIS said. “It can undermine the perceived need to deal with banks’ impaired […]

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The UK faces a €149.2 billion liability to the EU

The Bruges Group’s latest report has exposed that the UK is facing a maximum potential loss of €149.2 billion on its financial commitments to the EU and the Euro. The report reveals the full extent of our obligations in respect of the present and future debts of EU institutions including: How the Government’s defined position is questionable in law and therefore has led it to underestimate its full potential exposure to EU debt; and That the true extent of the […]

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Three flaws in the Financial Services Bill

Under the heading, Osborne looks to limit damage of ‘credit busts’, the FT gives a neat summary of the Chancellor’s plans. In particular: He said the FPC would also look out for dangerous linkages in the financial system and identify exotic new instruments that might undermine stability. It would be charged with containing credit booms as well as limiting the damage of “credit busts”. Which this morning caused me to regret that I was not given time in the Commons […]

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Telegraph: “Will the great interest rate gamble pay off?” No.

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Via The Telegraph, Will the great interest rate gamble pay off? By the time this month’s auction is over, the ECB will have doled out nearly one and a half trillion euros of “free” money to help keep the banking system alive, with much more to come over the months ahead. Nobody is under any illusions. These actions have not succeeded in vanquishing the crisis. Underlying structural issues remain unresolved, and it is most unlikely that the starvation diet to […]

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The inflation or deflation song

Via “Merle Hazard”: I’m reminded of economist James Buchanan’s words: The market will not work effectively with monetary anarchy. Politicization is not an effective alternative. We must commence meaningful dialogue with acceptance of these elementary verities. Far too much has been said and written in elaboration of the first statement, which too often is taken to be equivalent to the assertion that “capitalism” or “the market” has failed. Admittedly claims for market efficacy without qualifiers can be found. But economists […]

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If this is capitalism, I am not a capitalist

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I spoke last night in the general debate on the economy, saying*: As I rise to speak I am reminded of a quotation from an economist who was a fierce critic of Keynes, a chap called Henry Hazlitt, who said: “Today is already the tomorrow which the bad economist yesterday urged us to ignore.” We have heard today some moving accounts of individual and collective suffering in different regions of the country and among different sections of the public. We should […]

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Why Is There a Euro Crisis?

From a magnificent article by Philipp Bagus – Why Is There a Euro Crisis? Today’s banks are not free-market institutions. They live in a symbiosis with governments that they are financing. The banks’ survival depends on privileges and government interventions. Such an intervention explains the unusual stock gains. On Wednesday night, an EU summit had limited the losses that European banks will take for financing the irresponsible Greek government to 50 percent. Moreover, the summit showed that the European political elite is […]

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Sometimes, a US presidential candidate inspires: “End the Fed”

There is no greater threat to the security and prosperity of the United States today than the out-of-control, secretive Federal Reserve. Imagine that parents, overwhelmed by debt and months behind on their bills, sent their spendthrift teenagers out each weekend for a night on the town with credit cards and blank checks. Would anyone be surprised if this family never got their finances under control? via End the Fed | Ron Paul 2012 Presidential Campaign Committee. As I have said over and […]

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Operation Twisted Logic – Detlev Schlichter

Via Operation Twisted Logic, an article by Detlev Schlichter, author of Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Breakdown: … Like all state bureaucracies, the Fed is in fact struggling with problems that are predominantly of its own making. The Fed is the reason we are in this crisis. Or, more specifically, the present economic crisis is the inevitable consequence of the political decision to adopt a system of unconstrained, constantly expanding fiat money, in which the […]

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