The Bewilderness

Central bankers: the mad scientists of money

Now we know the extent of the Carneyval: the new spectacle centred in the City that decides to experiment with an advanced industrial economy. Or in central bank plagiarism: copy the Fed! Prudentia rejected, morality inverted; as these know it all neanderthals drag us back to the Stone Age.

Dress them up in glam and we would have a rock band. No offence intended for Queens of the Stone Age 

The Brown Bust, 2010 and counting

The money ran out in 2010. So ran a note by a departing Labour Minister: one finale epitaph on that irresponsible administration. Some will call this a lost decade; but better to rename this: Brown's Bust. 

The Guardian sets out a series of welfare changes that come into effect in the next two months. These changes represent a reduction in the amount of benefits received and reduce the scope by which entitlements can be rewarded. This will not reduce the welfare bill; only its rate of increase. The article is entitled by Patrick Wintour, their political editor, as the day that the Coalition changed Britain. 

Rather OTT, as the alternatives are far less palatable. Reduce benefits in Irish or Greek terms and embrace destitution. That day may still come. Have Labour and its slavish press forgotten that the money to pay for their client state must be raised abroad and, if no money is raised, no benefits can be paid.

Labour opened the sluicegates of debt. All else is incidental detail designed to deal with the consequences.   

Stripped of AAA

Moody's has decided to strip the United Kingdom of its AAA rating; rather a disappointment from the government's perspective after their three years of austerity rhetoric. This is not a surprise for onlookers. What did they expect after beating the drum about spending cuts? And avoiding any actual pain. The coalition government will be viewed as a missed opportunity. Monetizing debt on the backs of wages, foisting pain on to the next generation and avoiding the radical cuts required has led to a fatted state draining life from the private sector aided by the stagnation of zero interest rates.

There may be plenty of external headwinds but our predicament is predictable, political and homegrown. Plenty of pain all round.

A diet of Austerity undone; starvation will kick in

The criticisms against government economic and fiscal policy are becoming a crescendo following the advent of a potential triple dip. A case of "I scream" if the Chancellor. The arguments from the Left are well rehearsed mash-ups of cold Keynesian sick; of little use when they get back into power as the spigots of QE will have run dry and the bond market hunger for gilts will have been exhausted by the incumbents.

But the small actions taken by sleight of hand: some austerity, higher taxes, stealth inflation and so on have been undome by the recalcitrant civil servants, the lack of supply side reform and the overwhelming size of the state (which reduces all Chancellors to tinkering).

The British Leviathan appears to be incapable of dieting. Soon it will be starved by default.