A couple of posters this morning:
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Brilliant!
Keep going
So basically the government are just fund managers for the rich.
They work for them not us!
That’s it
Piketty in his book “Capital” showed how income from (UK) gov bonds in the 19th cent kept the well off in the style to which they had grown accustomed. It was quite nice how he used classical authors of the time to illustrate this.
I always use Mr Darcy….
Utterly pointless..you should really have said government bonds are largely owned by pension funds. Are you anti pension schemes?
Do you know who owns most of pension funds?
And you clearly do not know who owns bonds.
Saw a couple of comments on Bluesky from Very Serious People (copyright Paul Krugman) being snooty at the idea of MMT because “Liz Truss disproved it”. I pointed out the entirely unplanned for £300bn borrowing during covid which markets shrugged at and suddenly it’s all gone quiet. The Very serious people forget that Truss and Kwarteng (and forgive an aside: why is he given a berth to pontificate on politics on the GMB show after what he did to the economy?) authored their own demise, with Truss’s own ducking and diving injecting tonnes of uncertainty into the markets. Had she not been as radicalised as she has obviously become and maintained transparency at the Treasury, she may well have lasted, possibly to the election.
What do you think would happen to the Government Bond market, if Rachel R announced in parliament that she has suspended the “full funding rule” in the DMO Remit? “Gilts will only be issued when required. Existing Gilts will be redeemed at par at the contracted date by the National Loans Fund.” says Rachel.
“Can I remind the House that Gilts do not fund government spending; they are simply risk free savings /welfare benefits that give free money to Banks, Pension and Insurance funds “. Can I refer the House to the ICAEW Chart, (note that £2.7 trillion gross debt figure is today £3.2 trillion). https://www.icaew.com/insights/viewpoints-on-the-news/2022/sept-2022/chart-of-the-week-uk-public-debt
BTW. The Gilts market is a price taker not a price maker. If say, that market forced up Gilt yields to 4%, too much for the BoE. The BoE just has to threaten to buy unlimited quantities of 4% Gilts to raise prices and bring down yields. The market yield would drop back to 3.99% within hours.
The government long ago suspended the full funding rule. QE did that. What we need is an acknowledgement of the truth.
Feels like there’s a T-shirt market waiting to happen with these posters. Some Murphy merch to raise extra coffee funds!?
🙂
Never a truer word spoken – looking at the reference to Emma Duncan’s article in the Times (everyone should read it to see the sick mindset that torments us) it is obvious that if you are not rich enough to self fund yourself through life’s downsides and exploit it’s upsides (or more likely, other people’s downsides!), then the motto is ‘Tough Shit Baby’.
Yet, you only have to look at how the state rewards wealth to know that that position is completely hypocritical or based on ignorance or both.
Yet it is ordinary people who are accused by Duncan of having a ‘culture of entitlement’. Total Fascism again – getting their refutation in first accusing the accused of what they are actually doing. The Establishment, the media and those that look up to them are just sick mothers’ – the lot of them.
All this is is a facile argument about who is deserving of the government money supply. The answer is, all of us. The reality is otherwise and that is a choice – not a necessity.
Hi Richard,
Thanks for your excellent videos and articles. Please excuse what might be construed as a trivial comment and one that need not be published. For some reason I find the hand held microphone in the videos somewhat disconcerting. Everyone else seems to use a microphone stand. I think this would improve the presentation of your otherwise well produced efforts. Regards Alfred Wickens
We have given up the hand held, although generally it works better.
Whilst l agree with what you said, if the government didn’t offer bonds, pension funds would need to invest in other assets whose values would sky rocket and there would be significantly high inflation. The country would be awash with £ sterling whose value would, as a result, signifantly depreciate, meaning the export market would be badly hit. Bonds act as a sump for the sterling that is present within the economy and therefore are beneficial even if they don’t fund govt spending. Thanks
I am not saying we should not offer bonds. I am saying we must understand them.