Recall that the new head of the Bank of England is Mark Carney; i.e., another former Goldman Sachs banker. He may be Canadian, but like his counterpart at the ECB, “Goldman Mario” Draghi, everything he says must be taken with a grain of salt. Clearly, Carney is part of “TPTB”; and thus, you can bet his goals are decidedly not synchronized with British taxpayers.
Last week, the Bank of England reiterated the 0.5% benchmark rate it has maintained for the past five years; as well as its own version of “QE,” which to date has monetized £375 billion of government bonds. In true “Fedspeak” fashion, Carney claimed he was encouraged by economic progress, but monetary policy would still remain “exceptionally loose” for some time to come. Frankly, the only “progress” I see is the housing bubble the BOE has created; at the expense, of course, of a rocketing cost of living. In my eyes, the Bank of England is the most dangerous financial entity on the planet; as not only does it manage the most highly indebted banking system; but pound for pound, prints more money per dollar of GDP than any Central bank. In other words, the BOE has forgotten the UK is no longer a significant economic power, but still acts as if it is.
Thus, I was rather shocked to hear Carney’s comments last week, of his supposed “partner in crime,” the United States. Appearing on a U.S.-based talk show, he said, “Kicking the can on tax and spending decisions doesn’t fix America’s longer-term fiscal, entitlement, and other problems. So, what concerns me most is a system creating very difficult short-term situations without a longer-term benefit.” Well, based on what I wrote in yesterday’s “The Budget Deal is a Total Farce,” there’s certainly no disputing a word he said. However, given the BOE’s own, identical policies, it defies reality to hear such criticism. In other words, if that’s not the pot calling the kettle black, what is?
Sadly, not only has the BOE gone down the same, terminal financial path as the Fed – and all major Central banks, for that matter; but is exposed to an even weaker economic situation in Europe than we have here in the States (for now). The PIIGS are on the verge of collapse, the IMF admits the Euro crisis is far from solved, and even a Bank of England governor last week discussed the potential for a new term “bail-in” of major, multinational banks.
Some might say Carney was simply posturing, particularly as he only recently obtained his post as Bank of England Governor. And some might say he is simply deflecting blame toward a more universally hated competitor. However, the fact remains that, like the Fed, ECB, BOJ, and others, the Bank of England has ruined the UK via decades of unfettered money printing; which in the end game, will be paid for via hyperinflation. Remember, fiat currency is a Ponzi scheme that must grow larger to survive; and thus, rest assured, central banks will always “move the goal posts” of “tapering thresholds” and the like, in order to keep it going. That is, until it inevitably collapses under its own weight.
