Paul Harman has done another take on one of my Mythbusters:
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1. BoE governor appointed by Chancellor.
3. BoE sets interest rates, can buy bonds QE or loan money directly to government.
But only buys bonds with gov’t permission
So really only interest rates, at most, are under is control
And they have changed by very little over a decade
@ Charles Adams –
I love that Step 2 is missing…
https://www.theguardian.com/world/2020/jun/22/britain-nearly-went-bust-in-march-says-bank-of-england
This is either bad journalism or telling of the actual independence of the BOE.
Blogs in the morning
Why is it that consecutive governments let everyone think that the money they’ve generated through the BoE has to be paid back, so much so that even those commentators who you think would know this tend to have the same belief? Is it a deliberate ploy to keep the poorer among us in their place?
I’m not sure I understand the ins and outs of MMT, so apologies if the terminology is incorrect!
You’ve got it right
And it’s all because people think the government is a household
https://www.bloomberg.com/news/articles/2020-06-22/boe-s-bailey-says-he-d-shrink-balance-sheet-before-raising-rates
I was wondering if you had seen this?
Unbelievable – why would you reverse QE?
Because you treat money as more important than people – whose unemployment you consider of no consequence?
Does the Governor of the BoE believe in myths?
“In an exclusive interview, Andrew Bailey said that in the early stages of the virus, Britain came within a whisker of not being able to sell its debt – something many would characterise as effective insolvency.”
“The government would have struggled to fund itself if the Bank of England had not intervened during the market “meltdown” of COVID-19, the Bank’s governor has told Sky News.”
https://news.sky.com/story/coronavirus-governor-says-bank-of-england-saved-britain-from-effective-insolvency-12012369
Blog responses in the morning
But to describe the man as dim is to be kind to him
“But to describe the man as dim is to be kind to him”
His qualifications are available for all to see. As are yours.
I doubt he’d resort to insults about you though.
I’m not being insulting
Shout out for austerity and balancing the household budget: “Britain nearly went bust in March, says Bank of England”. The Guardian, Richard Partington, Economics Correspondent: an alumnus of City UoL (MA Newspaper Journalism) apparently no education whatsoever in economics but a keen eye for the sensationalist neoliberal headline.
There will be a blog or two in the morning
He is unlikely to have written the headline, though I’m not entirely sure if Guardian journalists do their own these days. Ordinarily a sub would do it, sometimes in consultation with the writer, though not always. In any event, I would argue the headline is accurate about what Andrew Bailey said.
Richard,
What do you make of the framing of this story today suggesting the UK government came close to effective insolvency in March and was only saved by the BoE ‘intervening’? (As if the gov couldn’t have compelled them to.)
It seems designed to shore up the independent central bank narrative further. Is there anything more to this story and its appearance at this time?
https://www.theguardian.com/world/2020/jun/22/britain-nearly-went-bust-in-march-says-bank-of-england?CMP=Share_AndroidApp_Copy_to_clipboard
(BBC also reported this.)
Best wishes. Mark
There will be one or two blogs in this in the morning – too late now
Hope that’s OK
I was going to post that too… :ook forward to addressing it more politely than me. “picked for the job by former chancellor Sajid Javid, in almost his last act before his resignation…” Andrew Bailey…is clearly either a fibber or an idiot: though he might just be both.
About it