A few days ago
Lynda Blackwell, head of mortgages etc. at the Financial Conduct Authority rose
from the deep to suggest that older people in bigger properties should move out
to smaller ones to make room for those who need them.
This was a
little rich coming from that body given that not long ago our financial
regulators botched investigations and prosecutions involving money men who had
made billions in ripping off residents in retirement housing and who are still
happily engaged in the trade.
markets should take care of this issue but our "market" in property
has been subject to so much government and other action to rig it in many ways that
it is not surprising that the housing we need is not what we get nor at
sensible prices. Moreover both major
parties were firmly on the side of the money men.
this the Bank of England chief economist, Andy Haldane, said in
Northern Ireland, and this summary is taken from Tax Research blog of Richard
Let’s summarise his thinking (as I see it).
First, we’re in for tough times. Second, there is no case
for increasing interest rates now. Third, conventional QE has run out of road. Fourth, any alternative to conventional QE
has to be monetary policy.
Fifth, this means potentially relaxing the inflation
target to 4%. Sixth, even this, to allow
sufficient headroom for monetary policy, will require that we have negative
And, seventh, that might require the abolition of cash in
the economy so that people will be forced to hold money in banks and see its
Well, I suppose this is what you might get at Threadneedle
Street if you work in an unventilated room with the heat full on in high
summer. This is the most rational
explanation I have.
Cash is a means of exchange necessary to many forms of
economic activity. If the state does not
issue reliable cash or if it is in short supply people use other things to
replace it. You might take away the
banknotes and coin but you cannot take away other things.
During the War my grandfather had a nice line in eggs,
high in exchange value. An uncle in a
cold stores was able to get meat classified as bad but was better than in the
local butcher's. My father's engineering
works had a good supply of cigarette lighters.
The lady down the road who welcomed all those Yanks bringing food was
said to be able to make proper coffee, or so I was told.
Cigarettes were a real currency and I confess being a
non-smoker I did very well out of my ration when in the British Army of the
Rhine, it paid for my first year at University.
I could go on with examples from down the centuries.
It seems to have escaped Mr. Haldane that in the real
world people do not hold much in banks in fact debt levels are very high. Quite how you force people to hold accounts
that fall in value by 4% or more annually is an interesting question. Basically, they take the money out or take on
debt to counter it. This is why we have
are having hyper-inflation in the property market.
He is suggesting that we try to run an economy in
Keynesian terms when according to my vast document on Keynes savings are a
critical element in the functioning of his view of the economy What Haldane is saying is that government
spending based on debt and central planning, will replace savings and real
Perhaps the Bank of England is planning to replace the
statue of Britannia in Bullion Court, above, with one of John Law, see
Wikipedia under John Law (economist) and other links.