Comment on Roger Bootle article
http://www.telegraph.co.uk/finance/comment/7393470/A-year-on-and-quantitative-easing-is-paused-but-when-will-it-return.html
So 'My Uncle'* Mervyn at the Bank of England pawnshop has been buying £200Bn of gilts.
Now that selfsame BoE has cut interest rates to an historical low; this has caused a corresponding rise in the price of gilts. So, the BoE is buying at high prices and the financial institutions which were holding the stock have made a tidy profit with which to pay bonuses.
Alternatively, the opportunity has been created for the institutions to make arbitrage deals between the Treasury's Debt Management Office and the BoE.
Roll on a couple of months and we see that the inflation number is not a “blip”.
The BoE raises interest rate; gilt prices fall correspondingly.
The BoE now starts to sell its holding and incurs losses.
Who is paying for this capital loss?
Presumably the cash has gone to “money heaven” as in the Iceland debacle.
* The English term of ‘my uncle’ as a euphemism for the pawnbroker dates back to the middle of the seventeenth century.
According to Tim Congdon of Lombard Street Research, the whole process "is quite idiotic, frankly". He believes that the Bank, if it ran the DMO, would simply issue fewer gilts in the first place and "quantitative easing" would be achieved by buying bank debt.
- Daily Telegraph 26/3/09
Q&A: Quantitative easing "Q&A: Quantitative easing Are there any risks?
QE is a high-risk strategy. If it is not done aggressively enough, banks will remain unwilling to lend and the crisis could drag on. To some extent that is what happened in Japan when this was tried 10 years ago. Like old-fashioned money printing, QE also runs the risk of going too far: pumping too much money into the economy and causing high inflation - even hyperinflation - as seen in 1920s Weimar Germany and modern-day Zimbabwe.
Why are the UK's actions different from 1920s Germany and Zimbabwe?
Printing money can be defined as the central bank financing of government debts. This is what happened in both 1920s Weimar Germany and Zimbabwe and what the British government will insist it is not doing, although the short-term effect is similar. According to the Maastricht Treaty, EU member states are not allowed to finance their public deficits by printing money. That is one reason why the Bank of England will buy government bonds from financial institutions, not directly from the government. The Bank believes this form of QE is different because it is "printing money" as part of monetary policy - to prevent deflation. It is not printing money to help the government finance its deficit. Also, unlike Zimbabwe, this is a temporary policy: the Bank expects to sell the government bonds back into the market when the economy recovers. "
http://news.bbc.co.uk/1/hi/business/7924506.stm 6/8/09
"an elaborate game of pass the parcel sees cash effectively shifted from one arm of government to another via third parties" - Rodney Hobson 6/8/09
So the story so far: the BoE has cuts interest rates; gilt prices have risen.
Next "the Bank expects to sell the government bonds back into the market when the economy recovers. " i.e. when interest rates will have increased; gilt prices fallen.
The BoE sustains a loss; paid for by?
Monday, 8 March 2010
Saturday, 6 March 2010
Good government costs less with Conservatives
Dave has just posted:
http://blog.conservatives.com/index.php/tag/taxpayers/
My submission:
Public sector pensions are a huge problem as is amply illustrated in the report from the Taxpayers' Alliance this week.
Reform must start from the top.
How about a manifesto commitment on this topic?
You should start with the MPs' scheme.
http://blog.conservatives.com/index.php/tag/taxpayers/
My submission:
Public sector pensions are a huge problem as is amply illustrated in the report from the Taxpayers' Alliance this week.
Reform must start from the top.
How about a manifesto commitment on this topic?
You should start with the MPs' scheme.
Thursday, 4 March 2010
They Just Don't Get It
A continuing record of political incorrectness
2009: MPs' and Lords' expenses
February 2010: Lord Ashcroft/William Hague -
5th February 2010: Members of Parliament will get a 1.5% pay rise of nearly £1,000 from 1 April, taking their basic salary to £65,737 a year.
2009: MPs' and Lords' expenses
February 2010: Lord Ashcroft/William Hague -
5th February 2010: Members of Parliament will get a 1.5% pay rise of nearly £1,000 from 1 April, taking their basic salary to £65,737 a year.
Thursday, 25 February 2010
Whither/Wither Heathrow?
The Conservatives' position is clear
The LibDems' position is clear
The position of many in the Labour party is clear
Whatever the outcome of the impending General Election, Heathrow runway 3 will not be built.
This does, however, beg the question of how the demand for extra capacity (the estimated 222,000 extra flights which would have come with the third runway) will be met.
It is generally accepted that Heathrow “just growed”; starting from scratch it would not be there.
The problems with pollution, traffic congestion and noise with the current volume of flights at Heathrow
are apparent. These problems will be exacerbated by the more intensive use of the existing runways by improved air traffic control which will enable overlapped landing/take-off.
CO2 emissions may be reduced by new engine (open rotor) technology; however, this is noisier - it is highly probable that new generation planes with these engines could not operate from Heathrow
There is another elephant in the room: the issue of security/terrorism issue.
Consider: the ease with which the entry tunnels could be sabotaged, the appalling possibility of another 9/11 style attack on central London or Windsor – targets which could be hit only a few minutes after takeoff.
Let's call the whole thing off; close Heathrow entirely.
The Manifesto should advocate, if not enunciate, an holistic approach to the entire transport infrastructure of SE England.
The estuary airport as proposed by Boris could also encompass:
- TGV-style rail connections to UK & the continent
- the new Thames Barrier (needed in any case in consequence of climate change)
- tidal (therefore green) power generation
- wind power
- container port linked to rail for freight
This phased development would facilitate the re-development of the Heathrow area as:
- London's major rail centre linking Great Western, SouthWest Trains, Chiltern Rail, Chunnel
- rail freight interchange
- an exhibition & entertainment centre to rival to NEC
(this would also allow the redevelopment of the out-dated sites at Olympia and Earls Court)
- associated property/leisure development
The LibDems' position is clear
The position of many in the Labour party is clear
Whatever the outcome of the impending General Election, Heathrow runway 3 will not be built.
This does, however, beg the question of how the demand for extra capacity (the estimated 222,000 extra flights which would have come with the third runway) will be met.
It is generally accepted that Heathrow “just growed”; starting from scratch it would not be there.
The problems with pollution, traffic congestion and noise with the current volume of flights at Heathrow
are apparent. These problems will be exacerbated by the more intensive use of the existing runways by improved air traffic control which will enable overlapped landing/take-off.
CO2 emissions may be reduced by new engine (open rotor) technology; however, this is noisier - it is highly probable that new generation planes with these engines could not operate from Heathrow
There is another elephant in the room: the issue of security/terrorism issue.
Consider: the ease with which the entry tunnels could be sabotaged, the appalling possibility of another 9/11 style attack on central London or Windsor – targets which could be hit only a few minutes after takeoff.
Let's call the whole thing off; close Heathrow entirely.
The Manifesto should advocate, if not enunciate, an holistic approach to the entire transport infrastructure of SE England.
The estuary airport as proposed by Boris could also encompass:
- TGV-style rail connections to UK & the continent
- the new Thames Barrier (needed in any case in consequence of climate change)
- tidal (therefore green) power generation
- wind power
- container port linked to rail for freight
This phased development would facilitate the re-development of the Heathrow area as:
- London's major rail centre linking Great Western, SouthWest Trains, Chiltern Rail, Chunnel
- rail freight interchange
- an exhibition & entertainment centre to rival to NEC
(this would also allow the redevelopment of the out-dated sites at Olympia and Earls Court)
- associated property/leisure development
Tuesday, 23 February 2010
Comment on The Times web site
A view from San Diego: more to come on: SD, Tijuana, AAAS - Climate Change, Geoengineering
http://business.timesonline.co.uk/tol/business/columnists/article7038528.ece
Time to crank up the Bank’s printer
If the economy relapses, jobs may be cut, reducing spare capacity, so the Bank should start easing as soon as possible
Richard Tebboth wrote:
MK's Quantitative Easing policy (sounds like a laxative) seems to have served principally to have boosted banks' profits and the bankers' bonuses.
If he just sent every taxpayer a cheque for £1000 (if not £10,000) it would provide a much greater boost to the economy and cut out the middlemen.
February 24, 2010 5:07 AM GMT
http://business.timesonline.co.uk/tol/business/columnists/article7038528.ece
Time to crank up the Bank’s printer
If the economy relapses, jobs may be cut, reducing spare capacity, so the Bank should start easing as soon as possible
Richard Tebboth wrote:
MK's Quantitative Easing policy (sounds like a laxative) seems to have served principally to have boosted banks' profits and the bankers' bonuses.
If he just sent every taxpayer a cheque for £1000 (if not £10,000) it would provide a much greater boost to the economy and cut out the middlemen.
February 24, 2010 5:07 AM GMT
Thursday, 28 January 2010
Canaan Contemplation - Gazan Gaze - Palestine Perspective: Part 1
As a child in the 1950s, at Church, School, and Sunday School I was brought up on the stories of the Old Testament.
As a teenager, as part of the O Level history syllabus I learned of the Dreyfus Affair, the decline of the Ottoman Empire (as one of the causes of WW1) and the Balfour Declaration and associated treaties and concordats. (1)
In the 60s and 70s I first watched the movie epics:-
Exodus, Cast a Giant Shadow, Fiddler on the Roof, Lawrence of Arabia.
In 1967 I visited the Dachau concentration camp near Munich.
In September 1970 we witnessed the hijacking of four passenger jets by members of the Popular Front for the Liberation of Palestine.
In September 1972 we witnessed the massacre of 11 Israeli athletes at the Olympic Games in Munich by the Palestinian “Black September Organization”.
In February 1973 I visited Anglo-Jewish friends in Tel Aviv and went to the Wailing/Western Wall, Temple Mount and the Yad Vashem Holocaust Memorial in Jerusalem. (2)
Since 1982 I have been regularly reminded of the history of King Solomon's Temple and (since 1992) of the construction of the second temple.
In 1984 we visited the remains of the Warsaw ghetto and Auschwitz.
1993: Schindler's List - the movie
In 1994 we (in the company of Jewish friends) visited the Forêt de Compiègne: site of the formal German surrender in 1918; also the point of departure of the last deportation train of Jews from France to Auschwitz in 1944.
In 1996 on a visit to Prague we saw the remains of its ghetto and learned of the Golem; we also visited the Theresienstadt concentration camp. (3)
In 2001 I visited the Holocaust exhibition at the Imperial War Museum.
In 2007 I visited the Museum of Tolerance in Los Angeles with another Jewish friend.
27th January 2010 was Holocaust Memorial Day: the 65th anniversary of the liberation of Auschwitz.
On 31st January 2010 we revisited the IWM Holocaust exhibition: the stories of the Lodz and Warsaw ghettos were amply illustrated; camp survivors provided their testimonies with accounts of racial and religious prejudice and pleas that this history wouldlead to tolerance and understanding.
All of the above dispose me to a natural sympathy with the Jewish people.
However...
In early December 2008 we visited Jordan and Petra; in the distance we heard an occasional distant rumble. On enquiry, our guide told me that this was a sonic boom caused by Israeli fighter jets breaking the sound barrier over the Gaza strip.
Three weeks later Israel initiated Operation Cast Lead with air-strikes on the Gaza Strip followed by a ground invasion beginning on 3 January 2009. The war ended on January 18 with Israel completed its withdrawal on January 21. Between 1,166 and 1,417 Palestinians and 13 Israelis were killed. For more detailed reports and analysis see below (4).
However... there was clear evidence of the use of phosphorus munitions; the “settler” movement has continued unabated.
[1st February 2010: "Israel has revealed it has disciplined two top army officers for using white phosphorus shells during an attack on a UN compound in Gaza last year."]
In January 2009 I had the pleasure of meeting Commander David Hawksley (RN retired) who was present at the end of the British Mandate of Palestine. His view from 1948:-
“Despite the efforts of Britain to provide balance, the world was trying to correct the great wrong done to the Jews in Europe by committing another great wrong, the dispossession of the Arabs of Palestine. Despite the subsequent admirable courage of the Israelis and the unattractive behaviour of Palestinian extremists, I still feel the same. This is simply a sense of practical justice.
The injustice will continue to be the cause of Middle East instability and a volatile fuel for terrorism until it is understood both by Israel and the US. In practical terms it requires the maximum effort by Israel to put it right as far as possible within the bounds of its own prosperity, which would probably improve as a result.”
I was therefore sensitised to the “Palestinian Issue” and have subsequently monitored events via the Internet getting daily reports from both Israel and Arab sources.
Most recently my interest culminated in my participation in the Viva Palestinia 3 convoy which took medical and educational materials to Gaza via the Rafah crossing point from Egypt.
Questions:-
1. Is Gaza a ghetto?
2. Who is now exhibiting racial and religious prejudice?
-to be continued
(1) References
1)The Sykes-Picot Agreement: 1916
http://avalon.law.yale.edu/20th_century/sykes.asp
2)Balfour Declaration
http://en.wikipedia.org/wiki/Balfour_Declaration_of_1917#Text_of_the_declaration
Foreign Office,
November 2nd, 1917.
Dear Lord Rothschild,
I have much pleasure in conveying to you, on behalf of His Majesty's Government, the following declaration of sympathy with Jewish Zionist aspirations which has been submitted to, and approved by, the Cabinet:
"His Majesty's Government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country".
I should be grateful if you would bring this declaration to the knowledge of the Zionist Federation.
Yours sincerely, Arthur James Balfour
3)Churchill:summary http://en.wikipedia.org/wiki/Churchill_White_Paper,_1922
4)Churchill:detail http://avalon.law.yale.edu/20th_century/brwh1922.asp
5)League of Nations Mandate http://avalon.law.yale.edu/20th_century/palmanda.asp
(2) Less than 12 hours before my flight home Israeli jets shot down Libyan Arab Airlines Flight 114 over the [then Israeli-occupied] Sinai peninsula.
http://world.mediamonitors.net/Headlines/Forgotten-History-The-Case-of-Libyan-Arab-Airlines-Flight-114
(3) Theresienstadt was also the place of imprisonment of Gavrilo Princip, the assassin of Archduke Francis Ferdinand in Sarajevo in June 1914 – the act which precipitated WW1; being only 19 at the time of the assassination he was sentenced to 20 years, held in solitary confinement in a dank cell, and died there of tuberculosis exacerbated by malnutrition and blood loss from an amputated arm in April 1918.
(4) URLs:
Britain-Palestine All Party Parliamentary Group
http://www.richardburden.com/uploads/1bb85b99-db9e-6124-3da0-ca8ee2120c27.pdf
Goldstone Report
http://www2.ohchr.org/english/bodies/hrcouncil/docs/12session/A-HRC-12-48.pdf
Oxfam
http://www.oxfam.org.uk/oxfam_in_action/emergencies/gaza_crisis.html
Amnesty
http://www.amnesty.org/en/news-and-updates/israel039s-gaza-blockade-continues-suffocate-daily-life-20100118
Red Cross
http://www.redcross.org.uk/news.asp?id=89867
As a teenager, as part of the O Level history syllabus I learned of the Dreyfus Affair, the decline of the Ottoman Empire (as one of the causes of WW1) and the Balfour Declaration and associated treaties and concordats. (1)
In the 60s and 70s I first watched the movie epics:-
Exodus, Cast a Giant Shadow, Fiddler on the Roof, Lawrence of Arabia.
In 1967 I visited the Dachau concentration camp near Munich.
In September 1970 we witnessed the hijacking of four passenger jets by members of the Popular Front for the Liberation of Palestine.
In September 1972 we witnessed the massacre of 11 Israeli athletes at the Olympic Games in Munich by the Palestinian “Black September Organization”.
In February 1973 I visited Anglo-Jewish friends in Tel Aviv and went to the Wailing/Western Wall, Temple Mount and the Yad Vashem Holocaust Memorial in Jerusalem. (2)
Since 1982 I have been regularly reminded of the history of King Solomon's Temple and (since 1992) of the construction of the second temple.
In 1984 we visited the remains of the Warsaw ghetto and Auschwitz.
1993: Schindler's List - the movie
In 1994 we (in the company of Jewish friends) visited the Forêt de Compiègne: site of the formal German surrender in 1918; also the point of departure of the last deportation train of Jews from France to Auschwitz in 1944.
In 1996 on a visit to Prague we saw the remains of its ghetto and learned of the Golem; we also visited the Theresienstadt concentration camp. (3)
In 2001 I visited the Holocaust exhibition at the Imperial War Museum.
In 2007 I visited the Museum of Tolerance in Los Angeles with another Jewish friend.
27th January 2010 was Holocaust Memorial Day: the 65th anniversary of the liberation of Auschwitz.
On 31st January 2010 we revisited the IWM Holocaust exhibition: the stories of the Lodz and Warsaw ghettos were amply illustrated; camp survivors provided their testimonies with accounts of racial and religious prejudice and pleas that this history wouldlead to tolerance and understanding.
All of the above dispose me to a natural sympathy with the Jewish people.
However...
In early December 2008 we visited Jordan and Petra; in the distance we heard an occasional distant rumble. On enquiry, our guide told me that this was a sonic boom caused by Israeli fighter jets breaking the sound barrier over the Gaza strip.
Three weeks later Israel initiated Operation Cast Lead with air-strikes on the Gaza Strip followed by a ground invasion beginning on 3 January 2009. The war ended on January 18 with Israel completed its withdrawal on January 21. Between 1,166 and 1,417 Palestinians and 13 Israelis were killed. For more detailed reports and analysis see below (4).
However... there was clear evidence of the use of phosphorus munitions; the “settler” movement has continued unabated.
[1st February 2010: "Israel has revealed it has disciplined two top army officers for using white phosphorus shells during an attack on a UN compound in Gaza last year."]
In January 2009 I had the pleasure of meeting Commander David Hawksley (RN retired) who was present at the end of the British Mandate of Palestine. His view from 1948:-
“Despite the efforts of Britain to provide balance, the world was trying to correct the great wrong done to the Jews in Europe by committing another great wrong, the dispossession of the Arabs of Palestine. Despite the subsequent admirable courage of the Israelis and the unattractive behaviour of Palestinian extremists, I still feel the same. This is simply a sense of practical justice.
The injustice will continue to be the cause of Middle East instability and a volatile fuel for terrorism until it is understood both by Israel and the US. In practical terms it requires the maximum effort by Israel to put it right as far as possible within the bounds of its own prosperity, which would probably improve as a result.”
I was therefore sensitised to the “Palestinian Issue” and have subsequently monitored events via the Internet getting daily reports from both Israel and Arab sources.
Most recently my interest culminated in my participation in the Viva Palestinia 3 convoy which took medical and educational materials to Gaza via the Rafah crossing point from Egypt.
Questions:-
1. Is Gaza a ghetto?
2. Who is now exhibiting racial and religious prejudice?
-to be continued
(1) References
1)The Sykes-Picot Agreement: 1916
http://avalon.law.yale.edu/20th_century/sykes.asp
2)Balfour Declaration
http://en.wikipedia.org/wiki/Balfour_Declaration_of_1917#Text_of_the_declaration
Foreign Office,
November 2nd, 1917.
Dear Lord Rothschild,
I have much pleasure in conveying to you, on behalf of His Majesty's Government, the following declaration of sympathy with Jewish Zionist aspirations which has been submitted to, and approved by, the Cabinet:
"His Majesty's Government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country".
I should be grateful if you would bring this declaration to the knowledge of the Zionist Federation.
Yours sincerely, Arthur James Balfour
3)Churchill:summary http://en.wikipedia.org/wiki/Churchill_White_Paper,_1922
4)Churchill:detail http://avalon.law.yale.edu/20th_century/brwh1922.asp
5)League of Nations Mandate http://avalon.law.yale.edu/20th_century/palmanda.asp
(2) Less than 12 hours before my flight home Israeli jets shot down Libyan Arab Airlines Flight 114 over the [then Israeli-occupied] Sinai peninsula.
http://world.mediamonitors.net/Headlines/Forgotten-History-The-Case-of-Libyan-Arab-Airlines-Flight-114
(3) Theresienstadt was also the place of imprisonment of Gavrilo Princip, the assassin of Archduke Francis Ferdinand in Sarajevo in June 1914 – the act which precipitated WW1; being only 19 at the time of the assassination he was sentenced to 20 years, held in solitary confinement in a dank cell, and died there of tuberculosis exacerbated by malnutrition and blood loss from an amputated arm in April 1918.
(4) URLs:
Britain-Palestine All Party Parliamentary Group
http://www.richardburden.com/uploads/1bb85b99-db9e-6124-3da0-ca8ee2120c27.pdf
Goldstone Report
http://www2.ohchr.org/english/bodies/hrcouncil/docs/12session/A-HRC-12-48.pdf
Oxfam
http://www.oxfam.org.uk/oxfam_in_action/emergencies/gaza_crisis.html
Amnesty
http://www.amnesty.org/en/news-and-updates/israel039s-gaza-blockade-continues-suffocate-daily-life-20100118
Red Cross
http://www.redcross.org.uk/news.asp?id=89867
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