This quote from Lord Acton keeps coming up for me “Sooner or later the battle will need to be fought between the people and the banks” thank you your great explanation
Well during QE, the Bank of England posted a technical note on their website explaining how "high powered money" worked - I guess few people can be bothered to read these things.
What is really important for people to realise and hardly ever mentioned, is that austeriy means reduced investment in the public sector. It is nearly always dressed up as an exercise in reducing waste and preventing cash going to scroungers. In reality schools, hospitals, roads etc do not get maintained and at some point in the future they need to be fixed at much greater costs. It is also quite a dangerous policy in the long term.
It all looks suspiciously like a long term plan to erode democracy and sabotage the national infrastructure, through calculated Tory incompetence, Brexit, the simultaneous purges of the Conservative and Labour parties, the transformation of Labour into a far right Tory beast,and the media's perpetual adoration of the likes of Reform. We have been transformed into a one party state at war with its own people.
Yeah austerity means spending cuts - the government isn't precise enough to identify enough wasteful spending to purely cut waste, they have to paint in broad strokes. So they inevitably cut services.
@@twitafftwitaff7029 No it isn't. It was a response to the financial crisis, when the government deficit reached £160 bn, or 9% of GDP. About 30% of all government spending in 2009-10 was met by borrowing rather than tax. That was not sustainable. It would of course have been possible to deal with the deficit by raising taxes by more, and reducing real spending by less, than was done.
In the U.S., money spent on public K-12 IS money wasted. It goes to more and more administrative bloat and more money spent on purchases from the private sector: mind-numbing standardized curricula and more “professional development” that teachers hate, for good reason. It doesn’t go to teachers’ salaries, to raising teacher qualifications or standards, to school libraries, or to improve school lunches. Fix the system to allow students more autonomy over their own education and the system will become naturally less expensive and more effective. As it is we’re throwing good money after bad.
Excellent understanding and presentation- sadly nobody will change the process, I’ve always seen financial institutions and markets as parasitic forces.
The BoE is concerned about the value of the pound and inflation taking off again. If a Chancellor overrule the BoE then we will get a complete loss of confidence, a fall in Sterling and probably hyoerinflation
@@piccadillyvision3761you have been reading too many neocon books, the recent inflation has been Putin war led, the British economy is on its knees, the greedy bankers should lay off.
Any "debate" in parliament is a joke. I'm reminded of Angela Rayner when challenged on what the govt will do to address inflation. Her response to Torys? "Well what about 11.1% inflation?" Sorry, what sort of fucking answer is that??
Maybe China can give the two of them some lessons on how to actually achieve a growing economy that benefits the workers and not just the billionaires. Though I doubt they'd listen 😂
Let's hope Rachel's got a nice colouring-in book to keep her tiny brain occupied on such a long flight. She's probably back in economy while Bailey's up front with his banker buddies!
You may want to do your research the Chinese financial situation is in a much worse crisis currently, world economy damage too you could say@@alexjeffrey3981
Banks have been doing this forever. This is one of the reasons Banking used to be illegal. They lend cheap money for a while (circa 15 years) then pump the cost of those lines up via interest rates, cost of living increases via economic manipulation so that they can repossess the property they loaned the money for private individuals to buy and spend more money on improving for them. Then they improve the living standards so that the next generation can run out and repeat the cycle. It is a great way of owning vast housing stock and keeping it maintained for free. The problem was that the 2008 crash disrupted that cycle when governments stopped them from repossessing those homes. They are now able to repossess homes again and would you belive it we are in an economic crisis again. A cynical person might think it is all being orchestrated to profit the banks and the wealthy investors. But we all know they would not stoop that low, Would they?
The budget had no incentive for growth. The problem with socialism and taxing everything to death is that you eventually run out of other people's money
@@Turbogaggers123Perhaps you should listen closer to these videos. The real problem stopping growth is inequality: the lie of neoliberalism. Persuading the poor to vote for the rich to have more. We now have an extractive economy where the wealthy extract rents and banks inflate interest rates to preserve the value of the assets that are being rented back to us.
For too many politicians the health of the banking system is more important than the health and happiness of people. Healthy banks tend not to equate to healthy people.
@@danielpye7738 Actually the could have bailed out the citizens with savings and let the rest pay their debt's. The 2008/9 bailout was the biggest transfer of PRIVATE DEBT to PUBLIC DEBT in history. WE the people are paying for the failure of the banks a private business. We are getting screwed over on a daily basis, UNDERSTAND?????
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The issue is not QT, just how the UK does it. In the US, they do QT through letting the bonds expire and not buying new ones. While reducing liquidity in the market, it is a lot less impactful on the bond markets vs selling as the UK central bank does. This is the same thing that led to the bond blowout during Liz Truss' mini-budget. Are the BoE the king-makers in the UK?
Hi , Allegedly , when austerity was brought in under the Tory government of 2011 the actual effects and poor and vulnerable people were devasting . Between 80,000 to 120,000 or more people actually died directly or indirectly from those austerity cuts from 2011 to 2016/17. People actually starved to death . People killed themselves . It's horrific . How many will die this time due to more imposed austerity . Research for yourself and read the articles published on this issue online . We will never know the full horror of this austerity . Question . Is austerity not a crime against humanity in a civil society . To knowingly to harm to the public . Life is cheap when money is more mportant . Bankers make me sick . Greed is the ultimate end and society will collapse .
@@danielpye7738 we have to pay borrowed money back or loose our home,gov never pays back as it never exhisted in the first place.just like a mortgage.your signature on the mortgage form magiced that money ftom nowhere.all a con
@@danielpye7738that's what happened in the pandemic and as useful as it was to many, it accelerated inflation. There's some truth to what you say, but there are always many dangerous side effects to fiscal and monetary policies. The answers are always questionable. Don't ever be too certain
Well no it’s a not a con. It’s on you to pay it so you will do something productive that benefits us all. Right? If you don’t want to access money to pay the guys or girls that build your house for you or the person who is selling theirs are you suggesting the government should pay with this magic money so you don’t have to do anything? This how the government backs its money by our endeavours within the economy and this is the real failure.
The inflation rate may or may not be 2.6% but what it does not tell us is what happened in the past, which I think is what you are eluding to. For example let us say our weekly shop was £100 and the price of inflation was 50% for that month. That would take our weekly shop up to £150. Now let us say that they reduced inflation to 2% the following month, our weekly shop would now be £153. So even though they have reduced inflation, the price of our weekly shop has still sky rocketed. My point is, that when they say they have reduced inflation, it does not mean that cost has went down. It just means the rate at which cost is rising has slowed.
This is not the only thing going on... national insurance increases has slammed the door shut on recruitment in my company, people are leaving.... everything is on fire at the moment
You have massive vacancies everywhere in the UK. How that compute with your assertion that your company doesn't recruit anymore? Immigration is sky high. People don't immigrate into a country if there are no jobs available. It's a demand and supply economics. The UK have massive demands in the job market, the local British people can't satisfy the demand, hence you have lots of immigration. PS: maybe your company is just an exception.
@@holz_name It's more the type of vacancies and what many companies are trying to get for their money. I hold multiple MHE licences, yet most advertised jobs are either temp agencies (who lie about positions and pay) or are only offering minimum wage. It was a similar story with HGV not so long ago, where drivers were quitting to go work on warehousing because the pay didn't match the responsibilities.
@@holz_nameEmployers keep wages down by employing people they know will work for less because they have to. This is how immigrants are scape goated (divide and rule).
The BoE cannot stop QT when the Fed, ECB and BoJ are also in QT mode. To do so would crash the £. Inflation would be on the rise in the UK and we've had enough of that. Britain might geographically be an island but in financial terms it isn't. And for RR to make demands of the BoE would be politically sensitive. It was Gordon Brooon who made it's decisions independent of the government of the day.
But the £ is crashing on fears of a very poor economic outlook - which will feed through into higher import prices - in particular for food and energy, which adds another twist to the downward spiral - which will add pressure to the BoE to deal with inflation over the 2.5% target in the face of inflation combined with declining real GDP.
once people realize that money is the biggest scam to ever exist then maybe things will change. Quantitative easing is money printing with a fancy name. If the public decided to "quantitatively ease" their own personal economy they would go straight to prison.
@@danielpye7738I'm tired of casino banking causing financial chaos. If they aren't part of the same society as us, no bailouts from us next time they crash everything We should protect ourselves, not the people who cause crashes
The point of the BoE being independent were to remove politics from it, eg to stop governments running the economy hot in the run up to elections etc.... not working though is it.
Sorry, it should be the opposite. Central bank independence is indeed necessary to avoid excessive gov spending/borrowing/inflating away the currency. Look at Turkey, Venezuela, Zimbabwe and many others if in doubt.
@@sanshuma0 Venezuela economy is a result of US sanctions. Like Cuba, Venezuela is on the American hit list because Hugo Chavez government managed to kick out the oil companies and bring it back into the hands of Venezuela. They also used their position in OPEC to control price of oil by reducing the supply.
There is another possibility here. She agrees with the monetary objectives of the Bank of England while pretending to be concerned about the general welfare of the British people, as she too (like the Bank of England) wants to pursue an austerity agenda. (A sleight of hand, perhaps...?) In her recently published book, "The Capital Order" (2022), Clara E. Mattei argues that the central political objective of austerity is to rehabilitate the capital order itself, which is based on the twin pillars of the capital/wage-labour relation and the capitalist process of accumulation. In other words, austerity is a class-based project. Food for thought.
Predicting inflation starting to rise again this quarter while leading indicators showing economy slowing (not to mention governm*nt figures pumped up for the election). Global economy very weak which affects US. Fed dropping rates 0.50 shows they're VERY worried about financial downturn/crisis. interest rates coming down are also an indication banks are LESS willing to loan money into existence. The question here is where is the inflation going to come from in the near term? Consumers are mostly tapped out which is 70% of US economy (consumption). Yes inflation very likely to return but not before it continues to come down... Inflation can be a concern, but remember, certain assets like stocks and Crypto’s acts as a hedge. Long & short-term trading is generally safer, allowing investors to weather market volatility. I have managed to grow a nest egg of around 3.2 B'tc to a decent 27B'tc in the space of a few months... I'm especially grateful to Jinny Franz, whose deep expertise and traditional trading acumen have been invaluable in this challenging, ever-evolving financial landscape.
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Thank you for sharing your experience. She’s helped grow my reserve, despite inflation, from $87k to $246k as of today…..Her insights and daily siignals are worth following.
Interestingly, the BoE undermined the Liz Truss government when she tried to stimulate the economy. The chairman of the BoE came out and publicly declared that unfortunately if this budget is approved the BoE will have to return to QE, ie money printing. Almost immediately the pound went down sharply, and continued to decline until it reached almost parity with the dollar. This was accompanied by a massive media campaign that unseated Liz Truss. I call this an internal coup because it was done deliberately. Both of these events seem to point to the BoE pushing for austerity, and both show the power they have to unseat a government. We will have to wait and see what unfolds in the next few weeks.
The situation with Truss had one big difference. She wanted to cut taxes for the failed scam of trickle down. We need the opposite: government investment in infrastructure and public services.
So in essence it’s a rigged, artificial system. Money is worthless. What a joke. Buy REAL assets. Buy gold and silver. Protect yourself from these unnecessary risks.
@@gfzgf3 sure but gold is REAL. Gold and silver coins no cap gains. Protect wealth. Buy gold, silver and platinum. Even bars are good too. Also buy real estate.
@@OKeefeist yes why not. I don’t understand it fully so personally I don’t. I also can not “touch it” which creates doubt in my mind. The flip side to that is that it is basically non traceable which has its advantages and disadvantages.
@@anonymoushuman8962 If it's not traceable how did the UK Govt seize 6Bn dollars of Bitcoin 3 years ago from "illegal activity"? It is traceable..in fact more so than paper money. Now...why isn't that 6 billion on our balance sheet....??
Totally agree. The BOE is initiating a QT process in an entirely inappropriate time. They should be waiting till the UK is back in growth first and use QT to cool off the economy. Alas I can’t see much growth because Labour couldn’t wait to raise taxes which has killed off the chance of any uptick in growth that might have come from the increased liquidity that the pay rises would have created. Sometimes less is more. Labour could have simply waited to see the outcome of the public sector pay rises in the economy for 12 months and we would have seen a different picture. Particularly since we may have established new trade agreements with the EU and US by then. (Fir all his vices Trump actually favours the UK u know🤔)But they have stalled the economy with the NI tax rise/boundary adjustments. Sometimes timing is everything.
What a bloody mess this country is. And no-one is owning up to the fact that around 40,000,000,000 quid is being lost every year through leaving the E.U. I am SO glad I'm in my seventies and don't now have long to live.
Thank you, Richard, for yet another intuitive explanation! 🙏🇩🇪 Still I'm somewhat confused. If the bonds are too expensive now, will the market really buy all the bonds the BOC wa ts to spill into the market via QT? And to my knowledge, bond prices do not automatically respond inversly to their fixed interest rate. It rather depends on the curent interest rate. A 3% bond should be less worth if the current interest rate is at 5%, and would be worth more than its nominal value if current interest rate would be 1% only. Am I right?
A 3% bond should be less worth if the current interest rate is at 5%, and would be worth more than its nominal value if current interest rate would be 1% only. Am I right? >>>That is correct and why no one wants to buy bonds now because they'll make a capital loss as interest rates increase.
@@reddog5031 correct a mundo.... its a runaway train. the Bond prices are elastic to take up the losses in relative yield....things could enter a feedback loop. However, thankfully its not just a UK thingy, same is possible in JP, EU & US.... who will be revealed as swimming naked first?
I am absolutely convinced the BoE will cut interest rates and return to QE within a couple of weeks, or possibly days. They have to do it in a measured way so it doesn't appear like a panic reaction.
That's literally his point. He's blaming the Chancellor of the Exchequer, Rachel Reeves, for not standing up to the BoE, and states that she's simply afraid of it. That's explicitly what he says.
Since I consciously started following the news at about 10y old (more than 20+years ago), I have NEVER heard a policy other than austerity. Yet government deficits have continued to grow. When are we gonna get out of this deadloop?
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Raising interest rates had zero effect on the Putin-induced inflation on food and energy. The inflation reduced naturally. With this in mind it's complete folly to give the BoE the a remit of keeping inflation at 2% - it demonstrates a fundamental misunderstanding of economics. The BoE is unelected and, as such, should not have control of Monetary Policy. These are big, big issues that must be addressed!!
I suppose you were jumping for joy when all the sanctions were placed on Russia. Well, everybody who understood economics knew this would have a devastating effect on the economy of the West. But it was great at the time, 'I'm Mr big guy'. Thickos.
@@tobyrugby Hello it is me John England from Warwickshire oblast. We should not be of putting sanction on Mr Putin in special operation, think of economic!
Comparing spend on health and social care against previous years is crazy. We have known for 70 years that the baby “boom” would cause an increase in demand. That should have been prepared for.
The real problem is people are living longer with more and more chronic diseases that would have killed them off previously, requiring more and more care and care homes because their relatives if they have any either don't or can't look after them.
@@barrydwyer2039 Well it's the post WW2 generation that occupies that bracket. Throw in the Thatcherite obsession with selling off the state and its assets and the debt goes up while income goes down. People then demand better services, which either means more borrowing and more taxes. It's a conversation and a decision we've been avoiding for decades.
There's more people in my local church's grave yard born in 1780 and living 80-90 years than born after 1930 living 80-90 years. Modern population is weaker mentally and physically, parents today will bury there daughters and sons before they pass, through poor diet lack of exercise and over excessive consumption of processed carbohydrates, meats and the use of super processed plant based food weak times weak men, victim mentality over victous mentally.
And what's the cause of this? Because you right wingers always stop the analysis there. Could it be rampant consumerism pushed by private companies for profit? Ineffective parenting methods by boomers and gen X? A collapsing economy giving rise to learned helplessness? The whole "good times create weak men" model is just feels-based and not backed by any kind of analysis.
Hmmm I would assume that after so many years of QE the QE would need to be unwound at some point. Are you suggesting it should never be done or this is simply not the best time?
This begs the question as to whether this is simply bullying bankers or if Reeves iaka the government] are being blackmailed with something deeper to hide 🤔
The UK's outlook is really bleak now. If we are going to achieve a democratic solution to these problems people need to start speaking up now, the entire country feels like it is about to blow it's top off.
@@1ForTheShieldz Yes and no, sadly I do not think amongst the alternative choices there is anyone who could do a better job. Unfortunately the pool of people who are going into politics in the UK, as around the world, is becoming less talented every year.
@@tonywright497 Neither do I. He's a proponent of 'modern monetary theory'. Apparently the government just wracks up endless debt and manages this by simply printing money. Hmm - never heard of the Weimar Republic ? Try putting that forward at an election and see how many people vote for that.
Bank for International Settlements (BIS) lends money to central banks, including the Bank of England. The BIS is a private institution that acts as a lender for central banks and international financial institutions. He who pays the piper calls the tune..
May it be that the Bank of England knows that outside of Europe, Britain's economy is inevitably shrinking and therefore they think they have to avoid an Argentiniation of the economy?
Interests rates are up in the USA back to year 2000 levels. They had gone down in 2008 to "fux" the bank fraud. Our federal reserve could be part of why interest rates are upim the UK if they borrow from other countries banks.
Is Fascism the simple the simple term that should be used here? "The merging if State and Corporations/Oligarchy" With the ultimate goal of Corporate Feudalism! Austerity of course removes power from the common folk and makes us more dependant on the state, especially as we see a trend to getting more people on benefits! The seemingly increased powers through policies could make us a police state! In the EU they seem to be pushing toward militarization of police to achieve this, which is not feasible here! The EU of course has turned into the old Union where they are trying to centralize control of commodoties! Though the UK always looked towards Transatlanticism! What you said makes perfect sense as to why Starmer invited Larry Fink of BlackRock to the UK to get investment into the NHS too! Great video by the way. Thank You!
Central bank should just let the bonds roll off. The ones that they already have. Why should central bank subsidize new borrowing. What is the justification of this?
The only issue is not controlling inflation properly. People that claim ‘rates too high’ are either idiots or just don’t like the fact that we shouldn’t be propping up one particular asset class.
The idea that inflation is just above 2% is nonsense … it’s too high. Inflation is a tax on the poor in the Uk - all to keep one asset class propped up. Thing is they have no choice, they can’t listen to idiots they have to act.
Like what we’ve said, and you said it, umpteen times Richard it’s all for the rich, and the basic common man is not even thought about, and we get weak, ineffectual government, and we’ve had this for decades and the wealth stays at the top
The banks all deal in fiat currency, and from what I've heard, England has loaned off large, unknown amounts of gold reserves that they still claim to possess. Ain't it bleak when you got so much nothing..
@@piotrwojdelko1150the answer to economic problems is never to remove the universal healthcare system. Distribution matters it's not a lack of resources it is resource allocation and priority. If healthcare for the population isn't a top priority then the system should always change so it is.
However his prescription would destroy Government liquidity, the consequences would be un-mitigated cuts in Government expenditure, services curtailed, Govt workers shed and diminution in benefits/wages for those Govt tied roles. I guess there is no painless solution.
So simply put, the BoE holds any Gov't to ransom by controlling the markets... as ordinary people of this country, we are constantly screwed by bankers....always. At some point, this system has to break.
You weren't really paying attention were you or understand how the BoE works , has nothing to do with what flavour government we have. Austerity is austerity whther it's Osborne or Reeves or whoever that preside over it, as things stands unless the BoE changes tack that's what we will get.
End independent central banks..central banks in themselves are not the cause, those in charge of running the central banks are (as is the case with all businesses and all governments: self serving people in positions of authority are the problem)!
Very well put Richard. During the general election, one political party recognised this problem. Their plan was to instruct the Bank of England to create a £900Bn bond, with a 75 year maturity and 2% coupon. They were to use this money to buy the QE bonds from the private banks, thereby saving £40Bn p.a. in interest payments. The name of the party? Reform UK.
That is not possible becasue creating bonds is not done by BOE but by UK Treasury. Also, BOE can ONLY control short term Gilts 1 month to 6 months, they have NO CONTROL over long term 1 year to 30 years so cannot manage 75 years. The Gilt over 1 year is set by the market by buyers and sellers, the 75 years bond you suggest has to be floated on the marketplace and the price will be set by traders.
Redistribution of wealth is not a "side issue". It is the cause of MANY problems in this country. Labour needs to seriously consider a wealth tax on income from assets.
How to overcomplicate saying "the debt from living beyond our means ten years ago now needs repaying". The UK has been insolvent since Blair's second term, and has kept the show on the road through money printing. State spending is out of control, as are the Bankers. Both of these things are true.
Adrian Orr our RB governor here in NZ has done quite a job in engineering our multiple recessions. The downturn is finally hitting the building sector and retail has been in the doldrums for a couple of years now. It’s been a cracking economic hangover from the Cindy handing out cash like confetti days.
Let’s please not move the upward movement of wealth distribution to the side because this needs to be talked about. The issue we have is that this upward movement does not generate growth - it’s held in financial instruments or used to purchase assets (housing). If this wealth was distributed more fairly those with less wealth are more likely to spend which then relates to growth
The BoE is defending the Pound in the face of idiotic governments that show unable to control the debt. By keeping rates high they are further pressuring governments to lower debt. When the government implements a plan that will lower debt, the BoE will start lowering rates. The BoE is the only responsible adult in the room.
In the US the Treasury effectively nullified the Fed’s efforts ( to tighten monetary conditions through QT) by boosting liquidity in a number of ways. Drawing down the TGA, reverse repo and issuing bills rather than notes. The BOE used similar tricks during the Truss budget panic and could do so again. The problem the UK has is that sterling is not the world hegemony.
Gordon Brown should never have handed control of Monetary Policy to the unelected BoE. It must be taken back under the control of Central Government, who we can directly hold to account.
Here in NZ Grant Robertson handed Adrian Orr a 5 year contract before Labour were booted out. Maybe when an election is held the new government should be able to terminate a contract with no cost to the taxpayers if it choose so.
The BOE is realising balance sheet losses, it doesnt matter to them as the government is compensating them for these losses. The same thing happened when Truss was PM and she was blamed for nearly crashing the economy and UK pensions.
Government borrowing money from whom exactly, who the f is this BOE entity? And those whom the Govt borrowing the money from where they are getting the money is first place? Why Govt need to borrow money being Govt!
Is it fair to say that the BoE, being independent, can (carefully) ignore the government. If so does this suggest we don’t really live in a representative democracy?
Correct 😊 all central banks are look at all currencies against the dollar, yuan rupee euro pound etc etc all tanking badly , cbdc is why don’t take my word for it Jyst go to Bank of England cbdc 😮
The Americans want an economy. China is crashing due to its own failures. India is a failure with poop streets. The Eurozone is failing due to its own nanny state mismanagement. For every country that despises how bad America is nobody wants to do even half as well as it, not really.
Whereas there is some thruth ib what you are saying (BoE tightening /selling bonds ) that is not the route cause of the problem. This year BoE will only sell around £13 billion of bonds they had purchaee in the past , that is much less than in the last year. You are right saying they are not helping the situation but putting all the blame on them is simply inaccurate and wrong. There are more structural problems in the UK economy causing it.
I really understand economics with your simple explanations of how things work. Thanks for this. We need to make this more public. See if you canget on a tv programme (obvs not GBeebies😂). This is outrageous.
This quote from Lord Acton keeps coming up for me “Sooner or later the battle will need to be fought between the people and the banks” thank you your great explanation
All that's missing is the word 'Jewish'. Lovely. Haven't we been here before ?
@@stephenelkington4971 is that missing word in front of "banks"?
They don’t want us to know how the ‘magic money tree’ works. That is the game.
exactly magic money for the rich nothing for us.
Well during QE, the Bank of England posted a technical note on their website explaining how "high powered money" worked - I guess few people can be bothered to read these things.
They will never explain how ‘it’ works. Check out Henry Fords old quote.
th-cam.com/video/YtFOxNbmD38/w-d-xo.htmlsi=-7Cl6_kv0cYjdAnI
I still don't understand after having it explained by this video
What is really important for people to realise and hardly ever mentioned, is that austeriy means reduced investment in the public sector. It is nearly always dressed up as an exercise in reducing waste and preventing cash going to scroungers. In reality schools, hospitals, roads etc do not get maintained and at some point in the future they need to be fixed at much greater costs. It is also quite a dangerous policy in the long term.
It is a measure that the banks developed or thought up 🤣
It all looks suspiciously like a long term plan to erode democracy and sabotage the national infrastructure, through calculated Tory incompetence, Brexit, the simultaneous purges of the Conservative and Labour parties, the transformation of Labour into a far right Tory beast,and the media's perpetual adoration of the likes of Reform.
We have been transformed into a one party state at war with its own people.
Yeah austerity means spending cuts - the government isn't precise enough to identify enough wasteful spending to purely cut waste, they have to paint in broad strokes. So they inevitably cut services.
@@twitafftwitaff7029 No it isn't. It was a response to the financial crisis, when the government deficit reached £160 bn, or 9% of GDP. About 30% of all government spending in 2009-10 was met by borrowing rather than tax. That was not sustainable.
It would of course have been possible to deal with the deficit by raising taxes by more, and reducing real spending by less, than was done.
In the U.S., money spent on public K-12 IS money wasted. It goes to more and more administrative bloat and more money spent on purchases from the private sector: mind-numbing standardized curricula and more “professional development” that teachers hate, for good reason. It doesn’t go to teachers’ salaries, to raising teacher qualifications or standards, to school libraries, or to improve school lunches. Fix the system to allow students more autonomy over their own education and the system will become naturally less expensive and more effective. As it is we’re throwing good money after bad.
Excellent understanding and presentation- sadly nobody will change the process, I’ve always seen financial institutions and markets as parasitic forces.
This is a fantastic explanation of very complex process - thank you
is there a petition to get this debated in parliament?
The BoE is concerned about the value of the pound and inflation taking off again. If a Chancellor overrule the BoE then we will get a complete loss of confidence, a fall in Sterling and probably hyoerinflation
@@piccadillyvision3761you have been reading too many neocon books, the recent inflation has been Putin war led, the British economy is on its knees, the greedy bankers should lay off.
Any "debate" in parliament is a joke. I'm reminded of Angela Rayner when challenged on what the govt will do to address inflation. Her response to Torys? "Well what about 11.1% inflation?"
Sorry, what sort of fucking answer is that??
@@iian050it’s a reminder that the tories resided over that level of inflation when they ‘managed’ the economy
😂😂😂😂 good luck with that.
& who is going with Rachel Reeves on her trip to China? The governor of the Bank of England, Andrew Bailey. You really couldn't make it up!!!
Maybe China can give the two of them some lessons on how to actually achieve a growing economy that benefits the workers and not just the billionaires. Though I doubt they'd listen 😂
Let's hope Rachel's got a nice colouring-in book to keep her tiny brain occupied on such a long flight. She's probably back in economy while Bailey's up front with his banker buddies!
They're going on holiday to see what a real working economy looks like
You may want to do your research the Chinese financial situation is in a much worse crisis currently, world economy damage too you could say@@alexjeffrey3981
You mean the Chancellor and the Governor of the Bank of England talk to each other? Is that legal?
Banks have been doing this forever. This is one of the reasons Banking used to be illegal. They lend cheap money for a while (circa 15 years) then pump the cost of those lines up via interest rates, cost of living increases via economic manipulation so that they can repossess the property they loaned the money for private individuals to buy and spend more money on improving for them.
Then they improve the living standards so that the next generation can run out and repeat the cycle. It is a great way of owning vast housing stock and keeping it maintained for free.
The problem was that the 2008 crash disrupted that cycle when governments stopped them from repossessing those homes. They are now able to repossess homes again and would you belive it we are in an economic crisis again.
A cynical person might think it is all being orchestrated to profit the banks and the wealthy investors. But we all know they would not stoop that low, Would they?
Finance IS politics. Actively undermining labour is the playbook, it's blackmail for tax breaks.
The budget had no incentive for growth. The problem with socialism and taxing everything to death is that you eventually run out of other people's money
@@Turbogaggers123 we spend our money, and we then have assets. I see no problem with this plan
@@Turbogaggers123- And the problem with capitalism as run by the Tories was the highest personal tax burden in history.....
The tories blew through our money in fantastic fashion... stop trying to sound clever by quoting the architect of this entire mess
@@Turbogaggers123
@@Turbogaggers123Perhaps you should listen closer to these videos. The real problem stopping growth is inequality: the lie of neoliberalism. Persuading the poor to vote for the rich to have more. We now have an extractive economy where the wealthy extract rents and banks inflate interest rates to preserve the value of the assets that are being rented back to us.
Like the monopoly game and the bank making the money and everyone lost the game but the bankers. And they didn't even roll the dice.
For too many politicians the health of the banking system is more important than the health and happiness of people. Healthy banks tend not to equate to healthy people.
Healthy banks are needed so we don’t have to bail them out.
gov dont care about you
@@danielpye7738 you are very argumentative with everyone in the comment section aren't you. Stop being obnoxious.
@@danielpye7738 If the government can bail out the banks and they did, they can also bail out the nation, but they won't.
@@danielpye7738 Actually the could have bailed out the citizens with savings and let the rest pay their debt's. The 2008/9 bailout was the biggest transfer of PRIVATE DEBT to PUBLIC DEBT in history. WE the people are paying for the failure of the banks a private business. We are getting screwed over on a daily basis, UNDERSTAND?????
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The issue is not QT, just how the UK does it. In the US, they do QT through letting the bonds expire and not buying new ones. While reducing liquidity in the market, it is a lot less impactful on the bond markets vs selling as the UK central bank does. This is the same thing that led to the bond blowout during Liz Truss' mini-budget. Are the BoE the king-makers in the UK?
This should be all over the news
Agreed. But, who sets the rules for the BOE? The Government. Why don’t they ask the BOE to reduce inflation and stimulate growth?
Hi , Allegedly , when austerity was brought in under the Tory government of 2011 the actual effects and poor and vulnerable people were devasting . Between 80,000 to 120,000 or more people actually died directly or indirectly from those austerity cuts from 2011 to 2016/17. People actually starved to death . People killed themselves . It's horrific . How many will die this time due to more imposed austerity . Research for yourself and read the articles published on this issue online . We will never know the full horror of this austerity . Question . Is austerity not a crime against humanity in a civil society . To knowingly to harm to the public . Life is cheap when money is more mportant . Bankers make me sick . Greed is the ultimate end and society will collapse .
1979... austerity was launched by the Tory government in 1979 and as far as I can tell it was never lifted, cancelled or reversed
If it’s really as simple as printing money why doesn’t everyone just print money hand it out and everything is fixed, right?
@@danielpye7738 we have to pay borrowed money back or loose our home,gov never pays back as it never exhisted in the first place.just like a mortgage.your signature on the mortgage form magiced that money ftom nowhere.all a con
@@danielpye7738that's what happened in the pandemic and as useful as it was to many, it accelerated inflation. There's some truth to what you say, but there are always many dangerous side effects to fiscal and monetary policies. The answers are always questionable. Don't ever be too certain
Well no it’s a not a con. It’s on you to pay it so you will do something productive that benefits us all.
Right?
If you don’t want to access money to pay the guys or girls that build your house for you or the person who is selling theirs are you suggesting the government should pay with this magic money so you don’t have to do anything?
This how the government backs its money by our endeavours within the economy and this is the real failure.
we all know the rate of inflation is way higher than 2.6%..........and we the tax payer will cover the banksters losses on those bonds
totally, no way is it 2.6%
The inflation rate may or may not be 2.6% but what it does not tell us is what happened in the past, which I think is what you are eluding to.
For example let us say our weekly shop was £100 and the price of inflation was 50% for that month. That would take our weekly shop up to £150.
Now let us say that they reduced inflation to 2% the following month, our weekly shop would now be £153. So even though they have reduced inflation, the price of our weekly shop has still sky rocketed.
My point is, that when they say they have reduced inflation, it does not mean that cost has went down. It just means the rate at which cost is rising has slowed.
If it was measured on CPIH it will at least 2% higher.
We are quite simply living in a kleptocracy.
plutocracy
Austerity and wars.
They don’t care about the body count.
Richard has named who “they” are.
Central Banks call the shots, just ask Liz Truss. Useless Bailey needs to go to prison.
This is not the only thing going on... national insurance increases has slammed the door shut on recruitment in my company, people are leaving.... everything is on fire at the moment
The timing is right for extreme sports enthusiasts. Especially those who thrill with Downhill.
You have massive vacancies everywhere in the UK. How that compute with your assertion that your company doesn't recruit anymore? Immigration is sky high. People don't immigrate into a country if there are no jobs available. It's a demand and supply economics. The UK have massive demands in the job market, the local British people can't satisfy the demand, hence you have lots of immigration. PS: maybe your company is just an exception.
@@holz_name
It's more the type of vacancies and what many companies are trying to get for their money.
I hold multiple MHE licences, yet most advertised jobs are either temp agencies (who lie about positions and pay) or are only offering minimum wage.
It was a similar story with HGV not so long ago, where drivers were quitting to go work on warehousing because the pay didn't match the responsibilities.
@@holz_nameEmployers keep wages down by employing people they know will work for less because they have to. This is how immigrants are scape goated (divide and rule).
a 1.2% increase on employers national insurance that does not even kick in till april?
The BoE cannot stop QT when the Fed, ECB and BoJ are also in QT mode. To do so would crash the £. Inflation would be on the rise in the UK and we've had enough of that. Britain might geographically be an island but in financial terms it isn't. And for RR to make demands of the BoE would be politically sensitive. It was Gordon Brooon who made it's decisions independent of the government of the day.
We have started ending QT in NZ.
We beat everyone on the race to raise interest rates.
And indeed our dollar has dropped in value recently.
Valid point. I would like to hear Richard’s response to this.
@@glykolyse8076 You won't get one.
@@glykolyse8076 Go to his blog and ask him. He usually responds within an hour!
But the £ is crashing on fears of a very poor economic outlook - which will feed through into higher import prices - in particular for food and energy, which adds another twist to the downward spiral - which will add pressure to the BoE to deal with inflation over the 2.5% target in the face of inflation combined with declining real GDP.
once people realize that money is the biggest scam to ever exist then maybe things will change. Quantitative easing is money printing with a fancy name. If the public decided to "quantitatively ease" their own personal economy they would go straight to prison.
I don't remember credit card defaulters being charged with any crime. The rest of us just pick up the tab.
What a clear explanation, beautifully presented. The UK is in desperate trouble.
It certainly is if it's people swallow this old cagmag.
The BoE should not be independent, but subject to parliament and therefore democracy.
You not get your pocket money?
@@danielpye7738I'm tired of casino banking causing financial chaos. If they aren't part of the same society as us, no bailouts from us next time they crash everything
We should protect ourselves, not the people who cause crashes
The point of the BoE being independent were to remove politics from it, eg to stop governments running the economy hot in the run up to elections etc.... not working though is it.
Sorry, it should be the opposite. Central bank independence is indeed necessary to avoid excessive gov spending/borrowing/inflating away the currency. Look at Turkey, Venezuela, Zimbabwe and many others if in doubt.
@@sanshuma0 Venezuela economy is a result of US sanctions. Like Cuba, Venezuela is on the American hit list because Hugo Chavez government managed to kick out the oil companies and bring it back into the hands of Venezuela. They also used their position in OPEC to control price of oil by reducing the supply.
There is another possibility here. She agrees with the monetary objectives of the Bank of England while pretending to be concerned about the general welfare of the British people, as she too (like the Bank of England) wants to pursue an austerity agenda. (A sleight of hand, perhaps...?) In her recently published book, "The Capital Order" (2022), Clara E. Mattei argues that the central political objective of austerity is to rehabilitate the capital order itself, which is based on the twin pillars of the capital/wage-labour relation and the capitalist process of accumulation. In other words, austerity is a class-based project. Food for thought.
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Interestingly, the BoE undermined the Liz Truss government when she tried to stimulate the economy. The chairman of the BoE came out and publicly declared that unfortunately if this budget is approved the BoE will have to return to QE, ie money printing. Almost immediately the pound went down sharply, and continued to decline until it reached almost parity with the dollar. This was accompanied by a massive media campaign that unseated Liz Truss. I call this an internal coup because it was done deliberately. Both of these events seem to point to the BoE pushing for austerity, and both show the power they have to unseat a government. We will have to wait and see what unfolds in the next few weeks.
The situation with Truss had one big difference. She wanted to cut taxes for the failed scam of trickle down. We need the opposite: government investment in infrastructure and public services.
Yep, I think you nailed it. Knowing what we know in hindsight she was scapegoated.
@@davidmcculloch8490 So we can have a failed trickle up economy.
@@barrydwyer2039Doesn't look much like a trickle..
@@davidmcculloch8490Truss wanted to cut taxes to jump start the economy … Reeves has increased taxes and smothered the economy.
So in essence it’s a rigged, artificial system. Money is worthless. What a joke.
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I don’t understand it fully so personally I don’t. I also can not “touch it” which creates doubt in my mind. The flip side to that is that it is basically non traceable which has its advantages and disadvantages.
@@anonymoushuman8962 If it's not traceable how did the UK Govt seize 6Bn dollars of Bitcoin 3 years ago from "illegal activity"? It is traceable..in fact more so than paper money. Now...why isn't that 6 billion on our balance sheet....??
Gov in most western countries are in debt and borrowing more. It’s not a labour issue.
Totally agree. The BOE is initiating a QT process in an entirely inappropriate time. They should be waiting till the UK is back in growth first and use QT to cool off the economy. Alas I can’t see much growth because Labour couldn’t wait to raise taxes which has killed off the chance of any uptick in growth that might have come from the increased liquidity that the pay rises would have created. Sometimes less is more. Labour could have simply waited to see the outcome of the public sector pay rises in the economy for 12 months and we would have seen a different picture. Particularly since we may have established new trade agreements with the EU and US by then. (Fir all his vices Trump actually favours the UK u know🤔)But they have stalled the economy with the NI tax rise/boundary adjustments.
Sometimes timing is everything.
What a bloody mess this country is.
And no-one is owning up to the fact that around 40,000,000,000 quid is being lost every year through leaving the E.U.
I am SO glad I'm in my seventies and don't now have long to live.
We daren't argue because that would be extremism, and we all know were that leads.
When they introduce the CBDC we won't be able to argue anymore.
Who are the people in the bank of england doing this. Why are they doing it. Who, in the background is making these decisions.
Listen to Whitney Webb
🇮🇱
It's just bankers doing what their economic training has prepared them to do. Mainstream economics is a mess.
I thnk you know
@@crediblevidsJesus!
That is the clearest explanation I have ever heard on this type of topic. You have yourself a new subscriber.
Thank you, Richard, for yet another intuitive explanation! 🙏🇩🇪
Still I'm somewhat confused. If the bonds are too expensive now, will the market really buy all the bonds the BOC wa ts to spill into the market via QT?
And to my knowledge, bond prices do not automatically respond inversly to their fixed interest rate. It rather depends on the curent interest rate.
A 3% bond should be less worth if the current interest rate is at 5%, and would be worth more than its nominal value if current interest rate would be 1% only. Am I right?
A 3% bond should be less worth if the current interest rate is at 5%, and would be worth more than its nominal value if current interest rate would be 1% only. Am I right? >>>That is correct and why no one wants to buy bonds now because they'll make a capital loss as interest rates increase.
@@reddog5031 correct a mundo.... its a runaway train. the Bond prices are elastic to take up the losses in relative yield....things could enter a feedback loop. However, thankfully its not just a UK thingy, same is possible in JP, EU & US.... who will be revealed as swimming naked first?
This is happening everywhere in the world. People have to wake up!!
I am absolutely convinced the BoE will cut interest rates and return to QE within a couple of weeks, or possibly days. They have to do it in a measured way so it doesn't appear like a panic reaction.
You just described the Credit Cycle. It is a fact of life. You cannot blame the BoE for doing banking. The buck stops at No10.
That's literally his point. He's blaming the Chancellor of the Exchequer, Rachel Reeves, for not standing up to the BoE, and states that she's simply afraid of it. That's explicitly what he says.
He actually blames the Chancellor of the Exchequer for her inaction.
Banks will be banks regardless and will bank until otherwise.
The Government have no power, they do not run anything.
@@asterisk911 Reeves is an ex-employee of the Bank of England and was probably groomed and put in the post to do their bidding.
Thank you for your sane voice in this milieu of madness
So, without government spenfing there's no gtowth?
Where did the productive companies go?
BoE needs to have its independence stripped.
It's not independent, thats just a con trick, the Government appoints the directors and they appoint people who will do what they are told to do.
Since I consciously started following the news at about 10y old (more than 20+years ago), I have NEVER heard a policy other than austerity.
Yet government deficits have continued to grow. When are we gonna get out of this deadloop?
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Raising interest rates had zero effect on the Putin-induced inflation on food and energy.
The inflation reduced naturally.
With this in mind it's complete folly to give the BoE the a remit of keeping inflation at 2% - it demonstrates a fundamental misunderstanding of economics.
The BoE is unelected and, as such, should not have control of Monetary Policy.
These are big, big issues that must be addressed!!
Putin induced inflation?
Yeah, right.
Putin does not have the power you ascribe to him. We are projecting our failures onto tinpot nobodies many miles away.
I suppose you were jumping for joy when all the sanctions were placed on Russia.
Well, everybody who understood economics knew this would have a devastating effect on the economy of the West.
But it was great at the time, 'I'm Mr big guy'.
Thickos.
@@tobyrugby Hello it is me John England from Warwickshire oblast. We should not be of putting sanction on Mr Putin in special operation, think of economic!
Truss said something similar, she was called a conspiracy theorist.
Looking back now I think she was used as a scapegoat of sorts. The UK was in downturn for over a decade before her.
Truss wanted to lower bank profits in the immediacy to increase them in the long run. They were having none of it.
@@johnlow810 conservative membership voted truss leader over sunak. Elites not happy, Axe job on truss, sunak becomes leader. Sounds about right.
Truss was a useful idiot.
Liberal Democracy is just rule by international finance and the Merchant class.
Comparing spend on health and social care against previous years is crazy. We have known for 70 years that the baby “boom” would cause an increase in demand. That should have been prepared for.
I don’t think it’s the baby boom that’s caused the demand
The real problem is people are living longer with more and more chronic diseases that would have killed them off previously, requiring more and more care and care homes because their relatives if they have any either don't or can't look after them.
@@barrydwyer2039
Well it's the post WW2 generation that occupies that bracket.
Throw in the Thatcherite obsession with selling off the state and its assets and the debt goes up while income goes down.
People then demand better services, which either means more borrowing and more taxes.
It's a conversation and a decision we've been avoiding for decades.
There's more people in my local church's grave yard born in 1780 and living 80-90 years than born after 1930 living 80-90 years.
Modern population is weaker mentally and physically, parents today will bury there daughters and sons before they pass, through poor diet lack of exercise and over excessive consumption of processed carbohydrates, meats and the use of super processed plant based food
weak times weak men, victim mentality over victous mentally.
And what's the cause of this? Because you right wingers always stop the analysis there.
Could it be rampant consumerism pushed by private companies for profit? Ineffective parenting methods by boomers and gen X? A collapsing economy giving rise to learned helplessness?
The whole "good times create weak men" model is just feels-based and not backed by any kind of analysis.
Hmmm I would assume that after so many years of QE the QE would need to be unwound at some point. Are you suggesting it should never be done or this is simply not the best time?
Excellent content.
7:30 BoE - "STOP SELLING BONDS"
1998 [Labour] Act gives Reeves the power. 💪
For whom is she paid to work, us or them? 🤔
This begs the question as to whether this is simply bullying bankers or if Reeves iaka the government] are being blackmailed with something deeper to hide 🤔
The UK's outlook is really bleak now. If we are going to achieve a democratic solution to these problems people need to start speaking up now, the entire country feels like it is about to blow it's top off.
Let's hope Rachel from Accounts watches you.
And resigns
She wouldn't understand him😂😂😂
@@1ForTheShieldz Yes and no, sadly I do not think amongst the alternative choices there is anyone who could do a better job. Unfortunately the pool of people who are going into politics in the UK, as around the world, is becoming less talented every year.
@@tonywright497 I am sure Richard would welcome the chance to call in at No. 11 and explain in more detail how Rachel could do a better job.
@@tonywright497 Neither do I. He's a proponent of 'modern monetary theory'. Apparently the government just wracks up endless debt and manages this by simply printing money. Hmm - never heard of the Weimar Republic ? Try putting that forward at an election and see how many people vote for that.
Bank for International Settlements (BIS) lends money to central banks, including the Bank of England. The BIS is a private institution that acts as a lender for central banks and international financial institutions. He who pays the piper calls the tune..
Surely it’s more than that, it’s also creating wealth for the wealthy…. Again…
Thats how money works.
May it be that the Bank of England knows that outside of Europe, Britain's economy is inevitably shrinking and therefore they think they have to avoid an Argentiniation of the economy?
Interests rates are up in the USA back to year 2000 levels. They had gone down in 2008 to "fux" the bank fraud. Our federal reserve could be part of why interest rates are upim the UK if they borrow from other countries banks.
We will own nothing and be happy
Says who?
The WEF.
We are slaves and we are miserable
I own quite a lot actually.
That’s fine by me
Is Fascism the simple the simple term that should be used here? "The merging if State and Corporations/Oligarchy" With the ultimate goal of Corporate Feudalism!
Austerity of course removes power from the common folk and makes us more dependant on the state, especially as we see a trend to getting more people on benefits! The seemingly increased powers through policies could make us a police state!
In the EU they seem to be pushing toward militarization of police to achieve this, which is not feasible here! The EU of course has turned into the old Union where they are trying to centralize control of commodoties! Though the UK always looked towards Transatlanticism!
What you said makes perfect sense as to why Starmer invited Larry Fink of BlackRock to the UK to get investment into the NHS too!
Great video by the way. Thank You!
Central bank should just let the bonds roll off. The ones that they already have. Why should central bank subsidize new borrowing. What is the justification of this?
The only issue is not controlling inflation properly. People that claim ‘rates too high’ are either idiots or just don’t like the fact that we shouldn’t be propping up one particular asset class.
The thing is the idiocy won’t wash with investors so we will get a gilts strike, 70s style crisis may be a way off.
The idea that inflation is just above 2% is nonsense … it’s too high.
Inflation is a tax on the poor in the Uk - all to keep one asset class propped up.
Thing is they have no choice, they can’t listen to idiots they have to act.
Oh, and then you have the NI hike which is inflationary…
Like what we’ve said, and you said it, umpteen times Richard it’s all for the rich, and the basic common man is not even thought about, and we get weak, ineffectual government, and we’ve had this for decades and the wealth stays at the top
Where is this not t6he case ?
@ what are you saying I don’t understand what you’re saying where is the
Isn’t having the Bank of England as an independent institution highly undemocratic?
The banks all deal in fiat currency, and from what I've heard, England has loaned off large, unknown amounts of gold reserves that they still claim to possess. Ain't it bleak when you got so much nothing..
The Bank of England is not trying to keep interest rates above the rate of inflation. It is trying to get the rate of inflation to 2%.
I believe they know what they are doing ,overspending is not the key to growth.i could strip off NHS first
@@piotrwojdelko1150the answer to economic problems is never to remove the universal healthcare system. Distribution matters it's not a lack of resources it is resource allocation and priority. If healthcare for the population isn't a top priority then the system should always change so it is.
@@piotrwojdelko1150strip the NHS? I would stop spending 8,000,000 a day on housing illegal aliens and i would defund the RNLI first
I've been saying this since last year. It's ridiculous. Stifling growth!
However his prescription would destroy Government liquidity, the consequences would be un-mitigated cuts in Government expenditure, services curtailed, Govt workers shed and diminution in benefits/wages for those Govt tied roles. I guess there is no painless solution.
So simply put, the BoE holds any Gov't to ransom by controlling the markets... as ordinary people of this country, we are constantly screwed by bankers....always. At some point, this system has to break.
Spot on. The boe keeps the profits and we the people pick up the losses. End central banks. Sack Labour.
Nobody will get rid of the BoE.
It's a handy excuse for economic failure.
1st rule of politics: It's everybody's fault but mine.
You weren't really paying attention were you or understand how the BoE works , has nothing to do with what flavour government we have. Austerity is austerity whther it's Osborne or Reeves or whoever that preside over it, as things stands unless the BoE changes tack that's what we will get.
End independent central banks..central banks in themselves are not the cause, those in charge of running the central banks are (as is the case with all businesses and all governments: self serving people in positions of authority are the problem)!
The BoE doesn't keep the profits, part of the returns go to the Treasury.
Very well put Richard.
During the general election, one political party recognised this problem. Their plan was to instruct the Bank of England to create a £900Bn bond, with a 75 year maturity and 2% coupon. They were to use this money to buy the QE bonds from the private banks, thereby saving £40Bn p.a. in interest payments. The name of the party? Reform UK.
That is not possible becasue creating bonds is not done by BOE but by UK Treasury. Also, BOE can ONLY control short term Gilts 1 month to 6 months, they have NO CONTROL over long term 1 year to 30 years so cannot manage 75 years. The Gilt over 1 year is set by the market by buyers and sellers, the 75 years bond you suggest has to be floated on the marketplace and the price will be set by traders.
Redistribution of wealth is not a "side issue". It is the cause of MANY problems in this country. Labour needs to seriously consider a wealth tax on income from assets.
Good luck! No way politicians will understand. Which of them even understands MMT? Thank you!
Thankyou for this explanation.
If you are teaching, God help the UK in years to come.
Kudos for saying quantitative tightening lots of times without getting tongue tied! 🙌
How to overcomplicate saying "the debt from living beyond our means ten years ago now needs repaying".
The UK has been insolvent since Blair's second term, and has kept the show on the road through money printing.
State spending is out of control, as are the Bankers. Both of these things are true.
Great video
Just like everywhere else. Things are going according to plan.
Adrian Orr our RB governor here in NZ has done quite a job in engineering our multiple recessions.
The downturn is finally hitting the building sector and retail has been in the doldrums for a couple of years now.
It’s been a cracking economic hangover from the Cindy handing out cash like confetti days.
An economy of the few profiting over the many's misery has only one inevitable outcome. No matter how much time it takes.
Superb vid, thank you. The government needs to subscribe!
Let’s please not move the upward movement of wealth distribution to the side because this needs to be talked about.
The issue we have is that this upward movement does not generate growth - it’s held in financial instruments or used to purchase assets (housing).
If this wealth was distributed more fairly those with less wealth are more likely to spend which then relates to growth
I always assume we are in recession. Stuff doesnt get better anymore. Voting wont fix all this...
I wonder which tribe, who wears little hats, could be pulling the strings in the Bank of England since the Napoleonic Wars?
The BoE is defending the Pound in the face of idiotic governments that show unable to control the debt. By keeping rates high they are further pressuring governments to lower debt. When the government implements a plan that will lower debt, the BoE will start lowering rates. The BoE is the only responsible adult in the room.
In the US the Treasury effectively nullified the Fed’s efforts ( to tighten monetary conditions through QT) by boosting liquidity in a number of ways. Drawing down the TGA, reverse repo and issuing bills rather than notes. The BOE used similar tricks during the Truss budget panic and could do so again. The problem the UK has is that sterling is not the world hegemony.
Gordon Brown should never have handed control of Monetary Policy to the unelected BoE.
It must be taken back under the control of Central Government, who we can directly hold to account.
Here in NZ Grant Robertson handed Adrian Orr a 5 year contract before Labour were booted out.
Maybe when an election is held the new government should be able to terminate a contract with no cost to the taxpayers if it choose so.
Gordon Brown created decades of problems with his idiocy, mainly fiddling the way inflation is created.
The trouble with that is politicians will directly get the heat for market variation. Remember how much Nigel Lawson got lambasted.
The BOE is realising balance sheet losses, it doesnt matter to them as the government is compensating them for these losses. The same thing happened when Truss was PM and she was blamed for nearly crashing the economy and UK pensions.
Let me look in my crystal ball, Rachel will do nothing about this...
Government borrowing money from whom exactly, who the f is this BOE entity? And those whom the Govt borrowing the money from where they are getting the money is first place? Why Govt need to borrow money being Govt!
Is it fair to say that the BoE, being independent, can (carefully) ignore the government. If so does this suggest we don’t really live in a representative democracy?
Always good to hear your thoughts, for once I’m agreeing with your opinion! 🥂🍾
Correct 😊 all central banks are look at all currencies against the dollar, yuan rupee euro pound etc etc all tanking badly , cbdc is why don’t take my word for it Jyst go to Bank of England cbdc 😮
The Americans want an economy. China is crashing due to its own failures. India is a failure with poop streets. The Eurozone is failing due to its own nanny state mismanagement. For every country that despises how bad America is nobody wants to do even half as well as it, not really.
UK economic policy reminds me of the title of that 80s TV sitcom; 'Ever Decreasing Circles' . . .
So as a UK citizen what should we do?
Their goal is to force in CDBC's. Bitoins are the Prototypes. People should fight for a constiutional money system, Gold and Silver backed.
Whereas there is some thruth ib what you are saying (BoE tightening /selling bonds ) that is not the route cause of the problem. This year BoE will only sell around £13 billion of bonds they had purchaee in the past , that is much less than in the last year.
You are right saying they are not helping the situation but putting all the blame on them is simply inaccurate and wrong. There are more structural problems in the UK economy causing it.
"The Bank of England is run by bankers, for bankers." - Yep, a right load of 'bankers'.
At the very least. But how could it be resolved without driving the economy into recession?
I really understand economics with your simple explanations of how things work. Thanks for this. We need to make this more public. See if you canget on a tv programme (obvs not GBeebies😂). This is outrageous.
The inflation rate is whatever number they say it is. The real inflation rate is a very different figure.