"I think the important message to be sent is we have done everything in our power to maintain the stability of the British economy." McBroon on the financial meltdown (exclusive to all newspapers).
Discuss, (or should that be disgust ?) with particular reference to sales of gold and purchase of US Treasuries.
I’m sure you have lots to write. Try not to splutter over the exam paper.
ND
Well that is right after all. Raising taxes, selling our gold reserves at virtually an all time low to replace them with US treasuries is simply a masterstoke....of mismanagement.
ReplyDeleteThe real key now is theat Badger Darling has done nothing since becoming Chancellor whilst Ed Balls makes th eodd strange noise.
I suspect an Alan Walters type showdown is on the cards here in the not too distant future.
Still, the markets bounced back today so I am sure all is fine now and it is all plain sailing ahead.
Re Mrs Slicker - thins progressing very slowly indeed!
My only advice is a stiff curry - it smoked out our first one !
ReplyDeleteSeriously, all the best to her
I'm not Brown fan, and correct me if I'm worng, but isn't buying dollar assets effectively a 'hedge' against a fall in sterling?
ReplyDeleteWhen Brown says he's 'doing all he can' doesn't that usually mean he's borrowing, taxing and hiring more bureaucrats to massage GDP figures?
steven - a hedge hypothesis might make sense if (a) you reckon £ / $ are roughly inversely correlated and (b) you were confident there was a significant risk of the £ falling.
ReplyDeleteYou might make a bit of a case for (a) since 2001. But 6 months or so ago when McBroon seems to have done the deed, to argue for (b) would have been both perverse and in fact wrong - have a look at the 5-year chart at this URL, it's hard not to notice what's going on
http://uk.finance.yahoo.com/currency/convert?from=GBP&to=USD&amt=1&t=5y
unless he has a massive contrarian play in mind. But his gold escapade suggests he's anything but smart in these matters.
It would be really interesting if he has been inveigled by the US to prop up the $. But that sounds a bit too 'conspiracy-theory' for a man who's much more associated with cock-up.
Thanks, Nick, I'm drunk and an economic illiterate, so forgive me.
ReplyDeleteHowever, I can't help feeling that there are lot's of 'known unknowns' as the great Donald Rumsfield would say.
For example there's lots of crackpot dictatorships like cash rich China and the Arabs, and the oil price-fixing Arabs that can affect our economy.
Shouldn't we hedge to eliminate risk altogether?
Big topic, Steve: all I would say is that the term 'hedge' is often used rather loosely.
ReplyDeleteWhat you probably mean is, shouldn't we diversify our exposures? Generally speaking the answer is a resounding YES.
True hedging is acheived by finding an investment, the value of which is (as nearly as possible) perfectly inversely correlated with the value of the one your are concerned about.
Whether you wish to eliminate all risk is a subtle question.
I could go on . . .
Maybe just me, but...why would anyone hedge currencies by selling bullion which is the ultimate and probably most stable universal currency? Unless of course you were speculating, and if Brown was doing that he should be sacked.
ReplyDeleteBrown messed up and he and everyone else should face that.
Blow hard into the wifes ear Slicker, and keep blowing...
I blame Brown for the rain I blame him for the fact I am putting on weight and the fact I cannot grasp the breasts of the girl who works with me .
ReplyDeleteWhy not he takes credit for the economy and that had nothing to do with him either .
I'm coming across research and comment re official manipulation of the gold price. If the analysts are correct, much of the world's central banks' stock of gold has been "loaned" out and ended up as jewellery. It looks as though it ain't coming back, whatever the IOUs say. So Brown's disposal is only the tip of the iceberg. Please see my posts from today and yesterday.
ReplyDeleteAs MW says "Shit is brown, and Brown is shit." However, there is another shit who were he in power would also be doing "everything in our power to maintain the stability of the British economy". In other words the alternative everything in our power looks suspiciously like the same crap we are currently receiving.
ReplyDeleteI'll go for the conspiracy-theory
ReplyDeleteUmbongo - yes, neither our good host Mr CU lui-même nor meself hold Osborne in high regard (stronger words have been used but it's a pleasant evening)
ReplyDeleteMr Mania - there seem to be several things you cannot grasp (reasons for the paunch being just some of them) but play to your strengths, man, your talents are needed over at Idle's place.
Sackers, Wolfie, I tend to leave the conspiracy stuff to the Hitch, & go for the brainless cock-up explanation with Shots.
ReplyDeleteBut, hey, once you get started down that road . . . makes the Smith Institute affair pale into insignificance!
Nick: I wouldn't at all call it a conspiracy, just natural human weakness. What a wonderful life to be a top banker - did these people stop drinking wine in the Depression? Of course not.
ReplyDeleteSo no wonder you'd be prepared to loan/flog gold reserves to keep up the appearance that everything's OK. As long as the disaster doesn't happen on your watch, who cares? You can always tell yourself you did it for stability, maintaining market confidence etc.
Nick: I must be psychic:
ReplyDelete"Last Friday the Fed said that it was "providing liquidity to facilitate the orderly functioning of financial markets" and to stabilise the federal funds rate at 5.25 per cent. It did this by pumping an extra $US24 billion into the economy."
from "Blame Central Banks for Sinking Share Markets", By Gerard Jackson, in Dollar Daze (August 13) - http://www.dollardaze.org/blog/
Psychic as well as prolific, Sackers !
ReplyDelete(Are you pacific as well? hopefully no panic...)
Have you got a bigger version of the Pic I can 'play' with?
ReplyDeleteECB bunging 150Billion into the money markets will help won't it?
ReplyDeleteAlastair Darling seems to think so, as he held forth on this mornings today programme. Makes me want to stove his face in with a brick, the twat.
Anon, the correct way to deal with badgers (as A Darling shall henceforth be known) is to smash their skulls in with a shovel, not a brick in the face.
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