The Guardian has reported:
[I]n London, investors sent shockwaves through financial markets by shunning a £1.75bn auction of government gilts
So on Monday Mervyn King tells Gordon Brown he should not borrow more.
On Tuesday the banks, who have just received billions of tax payers money as part of the quantitative easing programme refuse to buy gilts.
Let me off the obvious explanation. The Bank of England signalled quite deliberately to the banks that they did not want them to buy the gilts and the banks fixed the market to ensure that the gilt offering was not fully subscribed in a coordinated effort by the banking elite to seek to preserve power for themselves.
Now try offering another reasonable explanation. There isn’t one. There was no reason on earth why this issue should have failed bar coordinated political action — and it’s rather hard to see how Mervyn King was not a part of that.
There is an alternative of course. Just print the money. You’d have to sack Mervyn King of course. It would be a small price to pay.
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so what have you got against mervyn king?
Where is the evidence for all this? How does your accusation fit with the fact that the next day’s auction was three times over-subscribed?
The evidence is precisely that – this was a staged political event
There was no economic reason for it – gilts are the best bet in town.
But they staged a one day coup on behalf of bankers, collectively
And yes – I name Mervyn King as the main conspirator
In my day job, I’m a forensic accountant. I’m used to sifting evidence for use in court and basing reasoning and arguments on it. When I say “evidence”, I mean stuff which really would stand up in court.
You have said “The evidence is precisely that – this was a staged political event”. With all due respect, that is an assertion, rather than evidence as such. If you have copy emails, recordings of conversations or bank statements with strange movements on them, then that could be a different matter.
Here’s an alternative interpretation of events. Mervyn King made certain remarks which were unusual, coming as they were out of the mouth of the current holder of his office. These remarks introduced some uncertainty in the market, and the buyers at the bond auction shortly afterwards were therefore cautious. The institutions needed time to absorb and consider King’s remarks.
Having considered them, the buyers decided that the remarks really didn’t affect the auction, and the next day they were back in force. After all, I agree with you that gilts are an excellent bet.
Mervyn King has for some time left me with the impression that not sufficient of a leader for someone in his position. But a “main conspirator”? I feel the case is not proven.
Brian
There are scales of proof
Criminal law is higher than civil proof
And I’m not seeking that standard here
Your theory is valid – but I think mine is too
Do I believe King sent a signal to the market – yes
Do I think it was deliberate – yes
Do I think he wanted the outcome he got – yes
But you’re right – that’s not evidence at the level a court would require
Richard