HT Adam Smith Institute...
The BoE claimed that the £200 billion it printed in 2009 onwards, resulted in the yields on five and ten years gilts being 100 basis points lower than they would otherwise have been. It claimed that growth was boosted by between 1.5 and 2%. On the basis of this, it enthusiastically decided to print another £75 billion this October.
Not so, says the highly authoritative (and not personally interested) Bank for International Settlements in its latest quarterly report. The real effect was about a quarter of what the BoE claims. Yields were on average 27 points lower.
The BIS also doesn’t agree with the BoE’s belief that new stimulus will have a similar effect. “It may be harder to achieve the same degree of effectiveness as with the initial programmes once the surprise or novelty element wanes”, it states in its conclusion. This basically means that financial movers realise that the money printing results in inflation, and that they therefore add that future inflation into their behaviour.
Like so many millions around the world, I was mesmerized by Daniel Hannan's public disembowlment of Gordon Brown in front of the European Parliament this week.
The God of Providence smiled upon us again, as this week one brave man stood up and said the things that needed saying, at just the right time and place, and those words were heard around the world.
They are words that merit repetition in every workplace, restaurant, church, civic club, golf course, and school athletic event in these United States. And every soul in any position of authority, be it in government, academia, business or the ecclesia, needs to hear them repeatedly, from all quarters.
These words from last week aren't the only moment of eloquence from Mr. Hannan. I've taken the liberty of transcribing his ninety seconds of truth-telling at the European Parliament on March 11, 2009.
I hope Mr. Hannan doesn't object--they are his words, after all, and he owns them. I've taken care to transcribe accurately, and I urge you to follow the link to his YouTube posting, and hear him speak them as well.
His words carry weight whether read or spoken--the true sign of a wordsmith. His poetical references are derived from Richard II.
Hannan's words now follow:
Once again, Madame President, we are indulging the fantasy that you can spend your way of out debt and legislate against recessions.
At best, we are engaging in self-deceit; at worst, we are deliberately perpetrating a deceit against our electorate.
The truth is that nothing can stop this correction. Interest rates were held too low for too long, and now that the air has been pumped into the balloon, it's going to come out again.
We could try and rescue some of the victims, but instead we engage in this pretense that we can stop the thing happening;
and the debt will paid by our children yet unborn and unbegot;
and nowhere more than in my country, where every child is now born with a debt of thirty thousand pounds,
because the incompetence and incontinence of its government.
As our national poet says:
This land of such dear souls
This dear, dear land is now leased out
(I die pronouncing it) like to a tenement or a pelting farm.
And now on top on that national debt, we are expected to
contribute to these European recovery programmes!
I close again with the words of our national poet:
Prevent it, resist it, let it not be so;
lest child, child's children cry against you 'Woe'.
[end transcription]
