It is often discussed how central banks saved the world economy following the 2008 Global Financial Crisis. In reality, monetary policy has created an even larger bubble than that which burst in 2008. But the trend has now been going on for a generation – from the 1980s onwards, every […]
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Speech in the debate on the Budget Resolutions
On 22 March, I took the opportunity to speak in the debate on the Budget Resolutions. The Hansard record is below (emphasis mine): Mr Steve Baker (Wycombe) (Con): I rise to support the Budget and, in particular, to welcome the Government’s supply-side reforms. This has been a dramatic Budget, and I would […]
Read MoreThe ECB’s bond-buying programme – “a grave menace to our civilisation”?
The European Central Bank has announced a programme of bond-buying of €60 billion a month, to be carried out at least until end-Sept 2016. Monetary policy around the world remains in the midst of a remarkable experiment: money creation is expected sustainably to solve real economic problems. It is possible that […]
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Speech on Money Creation and Society
A lady in Wycombe recently asked me the following questions: Why is my house valued higher than its worth? Why do crashes keep happening every 8 years? Who owns the money supply and how does it relate to gold? Why haven’t I had cost of living pay rise for 7 […]
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Understanding the Money Creation and Society Debate
Together with colleagues spanning four parties – Michael Meacher (Lab), Caroline Lucas (Green), Douglas Carswell (UKIP) and David Davis (Con) – I have secured a debate on Money Creation and Society for Thursday 20 November. Here’s a quick guide to understanding the debate. First, we have a system of paper or […]
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Keynes, Carney and the corruption of capitalism
We’ve come a long way since the Bank of England’s Andy Haldane pointed out that they had “intentionally blown the biggest government bond bubble in history” and that it constituted the biggest risk to financial stability. Yesterday, in his Sky News interview, the Bank’s Governor Mark Carney said that the housing […]
Read MoreHouse price inflation and the madness of monetary socialism
Via House price inflation should be capped at 5pc, RICS says – Telegraph, House prices should be prevented from rising by more than 5pc a year to stop another bubble destabilising the economy, a top property institute has urged. For comparison, the UK inflation target is 2%. The RICS story […]
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Monetary activism must end in a slump
On Friday, I spoke against monetary activism once again, complaining about the use of expectation management and new monetary instruments in an attempt to defibrillate the economy. It’s a mistake, not least because a failure to contain inflationary expectations could be catastrophic, as I set out last year. Mark Carney […]
Read More A confession from the Governor?
In his Cardiff speech last night, Sir Mervyn King admitted the Bank of England’s short term policies “appear diametrically opposed to those needed in the long term.”Sir Mervyn still believes that ulta-low interest rates have prevented the recession becoming a depression. However he confessed that such low interest rates prevent bad investments from […]
Read MoreThe limits to monetary activism are being acknowledged
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 […]
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