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Goldman's BOE Tentacle Has Not Even Arrived And Already Advocates Massive Money Printing

Tyler Durden's picture





 

When two weeks ago Mark Carney was appointed head of the Bank of England (despite his firm denials of any interest in the position) many were surprised. Not us: we were certain the former Goldmanite, and incidentally current head of the Bank of Canada, would lead the world's oldest central bank. We were even more convinced Carney would become BOE head after on November 8 the Bank of England halted QE as its "potency was questioned." Needless to say to the banker sponsors of the MIT monetary genius diaspora (as profiled previously), there is nothing more terrifying than the prospect of an end of electronic money conceived literally out of thin air, and debiting it into perfectly willing excess reserve accounts at any/all banks. So what is a statist financial system caught in the final days of its existence and desperate to extend its life as long as possible to do? Why, appoint the one person who would turn this "disastrous" conclusion on its head, and promptly proceed with doing exactly the opposite: printing like a drunken Hewlett Packard laserjet.

As a reminder, this is precisely what happened when Mario Draghi, another Goldmanite, replaced Trichet: days after his appointment, he not only facilitated the global financial system bailout of November 2011, but announced the arrival of the now defunct $1.3 trillion LTRO.

Sure enough it was only a matter of time before Carney showed his true colors, and we were not at all surprised to read last night that the central banker, largely misperceived modestly hawkish, has done not only a full U-turn but is already suggesting the BOE not only resume QE but hit the pedal to the medal to an extent not even seen at the Fed, by pushing for NGDP targeting. Which is nothing but a fancy term for infinite monetary easing.

From the FT:

Mark Carney, the next governor of the Bank of England, has suggested he will act much more aggressively to revive the UK economy when he takes charge next summer, including dumping the BoE’s much-vaunted inflation target if growth fails to pick up.

 

In a clear break with the views of the BoE’s current senior management, Mr Carney, now governor of the Bank of Canada, said on Tuesday that central banks should consider more radical measures – such as commitments to keep rates on hold for an extended period of time and numerical targets for unemployment – when rates are near zero.

 

If those measures fail to have the desired effect, Mr Carney said central banks should consider scrapping their inflation targets – a cornerstone of economic policy around the world in recent decades, including in the UK.

 

Mr Carney suggested that a nominal GDP target, where a central bank sets monetary policy based on both inflation and growth, would do more to boost economic output. “For example, adopting a nominal GDP-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting,” he said.

 

“If yet further stimulus were required, the policy framework itself would likely have to be changed,” Mr Carney said in Toronto in his first speech since being named successor to Sir Mervyn King last month. He cautioned that the benefits of any regime change “would have to be weighed carefully against the effectiveness of other unconventional monetary policy measures under the proven, flexible inflation targeting regime”.

 

The comments are likely to rankle with Sir Mervyn, who masterminded the campaign for an inflation target for the UK, introduced in 1992. The BoE targets inflation of 2 per cent, though prices have risen at a faster rate since 2009.

 

Any decision on scrapping the inflation target would rest with George Osborne, the chancellor, and would be influenced by the Monetary Policy Committee’s other eight members.

And of course, should Osborne dare to refuse this "proposal" and opt for the existing, and proper, BOE course, then his tenure will be drastically reduced. Just recall what happened to Bunga Silvio when he openly defied the other Goldman nemsis Mario Draghi in the first week of November 2011, just days after the inauguration of the Italian to the ECB throne?

 


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Wed, 12/12/2012 - 12:13 | Link to Comment TruthInSunshine
TruthInSunshine's picture

This shouldn't be a surprise. Mark Carnage will be eating cucumber finger sandwiches and drinking Earl Grey tea in all of London's finest establishments, whilst Canada's economy is imploding & Europe's "rabble & plebes" are being sodomized harder and harder in order to continue the transfusions to the too-big-to-fail banks.

He didn't just jump the pond at some random time and for some arbitrary reason.

..."doing God's work," you know...

Wed, 12/12/2012 - 12:24 | Link to Comment strannick
strannick's picture

 Printing like a drunken Hewlett Packard laserjet.

We love you ZH

Wed, 12/12/2012 - 14:22 | Link to Comment Sandmann
Sandmann's picture

You have to be of a certain age to think of HP and laser printers........Samsung and Oki make the bous at HP and their Canon engines look quaint

Wed, 12/12/2012 - 14:43 | Link to Comment The_Dude
The_Dude's picture

Did anyone else have this little mental association:

 

"done not only a full U-turn" = Crazy Ivan

 

I'm sure this will end well....

Wed, 12/12/2012 - 12:30 | Link to Comment Silver Bug
Silver Bug's picture

Of course they will print more. They know nothing else!

 

http://schiffblog.blogspot.ca/

Wed, 12/12/2012 - 12:03 | Link to Comment Tsunami Wave
Tsunami Wave's picture

If Goldman forwards this to Mark Carney: I have a few words for you.

 

Fuck you, you little pussy bitch.

Wed, 12/12/2012 - 12:07 | Link to Comment kliguy38
kliguy38's picture

I believe that references to stature are a little extreme....but arrow up

Wed, 12/12/2012 - 12:11 | Link to Comment buzzsaw99
buzzsaw99's picture

there is nothing left to revive the bankers already killed their host/victim

Wed, 12/12/2012 - 12:32 | Link to Comment Tsunami Wave
Tsunami Wave's picture

Goldman is working aggressively to move into Africa.. the last place in the world besides Antarctica and Northern Siberia, to give credit and extort people into being debt slaves..

http://www.zerohedge.com/news/beijing-conference-see-how-china-quietly-t...

Wed, 12/12/2012 - 12:11 | Link to Comment sangell
sangell's picture

Telegraph commentator noted Carney looks like a serial killer.

Wed, 12/12/2012 - 12:18 | Link to Comment tocointhephrase
tocointhephrase's picture

Only just read the post. Like I said below!

Wed, 12/12/2012 - 12:15 | Link to Comment Inthemix96
Inthemix96's picture

Another limp wristed goldmanite, cocksucking zionist whore at our local friendly bank then?

What in jesus "H" christ will go wrong now then?  Lets hope them aliens turn up sooner rather than later and anally probe mr carney and the whole fucking banking and political class to death.

On CNN of course.

Wed, 12/12/2012 - 12:16 | Link to Comment HD
HD's picture

Desperation. Buying time to spend all that printed fiat buying up real world assets before the whole damn system implodes.

Wed, 12/12/2012 - 12:20 | Link to Comment tocointhephrase
tocointhephrase's picture

http://www.bbc.co.uk/news/business-20691835

He looks like Count Dracula in this pic. Just needs some blood to drip from the canine teeth!

This is not going to end well!

Edit: williambanzai7 if you will?

Wed, 12/12/2012 - 12:17 | Link to Comment Confundido
Confundido's picture

Who were worse? The Medici or Goldman? Still not sure...

Wed, 12/12/2012 - 12:18 | Link to Comment darteaus
darteaus's picture

"Carney" - how appropriate!

Wed, 12/12/2012 - 12:20 | Link to Comment tocointhephrase
tocointhephrase's picture

Brilliant

Wed, 12/12/2012 - 12:40 | Link to Comment BrigstockBoy
BrigstockBoy's picture

"Circus folk. Nomads, you know. Smell like cabbage. Small hands."

Wed, 12/12/2012 - 12:20 | Link to Comment DavidC
DavidC's picture

Sadly, I wonder how long Andy Haldane has left in his current position.

DavidC

Wed, 12/12/2012 - 13:01 | Link to Comment caShOnlY
caShOnlY's picture

it sure looks like the sides are being drawn. 

Asians against the money printers.  We know Europe, America, England and eventually Canada will just keep the spigots wide open.  2 of the 3 are Asia's largest markets.   Who will blink first?

Wed, 12/12/2012 - 13:22 | Link to Comment Toolshed
Toolshed's picture

Asians against money printers? Which Asians are in that little group? Certainly not China or Japan. After those two, who else really counts? South Korea maybe?

Wed, 12/12/2012 - 13:20 | Link to Comment Toolshed
Toolshed's picture

Well that just won't work. We can't all be China. There must be some non-Chinas for the China model to succeed (temporarily anyway). If all countries become China who will maintain the other side of the imbalance? We are doomed I tell ya! DOOOOOMED!!!!

Wed, 12/12/2012 - 13:52 | Link to Comment Clesthenes
Clesthenes's picture

When you refer to China, do you really know who you point to?

When China was given control of the Panama Canal (1999), it was to give China collateral for the US Treasury debt it was accumulating.  As soon as China gained control, it set out to organize an alliance consisting of 1) Mexican and 2) Columbian drug cartels, 3) Chinese Triads, and 4) the Chinese Communist Party, as revealed by testimony before a Congressional committee.

I’m guessing that this alliance was merely another step in the process of giving China (actually, the alliance) more control over the American economy; like, thru the NDAA?

Wed, 12/12/2012 - 13:25 | Link to Comment _underscore
_underscore's picture

A very useful & timely heads-up from Mr Carney, you rarely get such strategy tips for free. He's turned my educated guesswork about what I should do with my resources, into a nailed-on certainty about what I should be (..and am..) doing  with my resources. Thank-you Sir.

 

Wed, 12/12/2012 - 14:08 | Link to Comment Clesthenes
Clesthenes's picture

Underscore,

I’m sorry, but unless you have access to the power to protect your resources, “what you should be doing” won’t be enough.  I made the same mistake, and they violated every right, rule and procedure in their attempt to silence me with a judicial assassination – I’ll probably be accidented or suicided next.

If we are to survive this and pending economic disasters, we have to learn lessons of American Founders.  Here is a short account of how English rebels (1620-50) brought down judges and tax collectors, bishops and kings who thought they could impose taxes against the consent of those taxed, among other grievances; the same English rebels who, 150 years later, guided American rebels.

Wed, 12/12/2012 - 13:31 | Link to Comment Canucklehead
Canucklehead's picture

... This is one of the greatest American political speeches. At the time it was considered the definitive analysis of the New Deal. Al Smith was the 1928 Democrat Presidential nominee, former governor of New York State and the leader of the Democrat Party until Roosevelt and the Communist wing took over in 1932. Smith was the person who gave Roosevelt his second chance in politics and therefore was responsible for FDR becoming President...

 http://www.reocities.com/Pentagon/6315/smith36.pdf

Wed, 12/12/2012 - 14:20 | Link to Comment Sandmann
Sandmann's picture

If Roosevelt hadn't worked overtime to engineer war with Japan and thereby activate Germany's Treaty with Japan the Us would have been stuck in Depression until Joe Stalin came to offer Franklin a New Deal - after all with Harry Dexter White and Morgenthau, Uncle Joe had the Treasury sewn up - he even got US Dollar printing plates for the NKVD to use in Occupied Germany and make a fortune out of US taxpayers

http://en.wikipedia.org/wiki/Harry_Dexter_White

 

Wed, 12/12/2012 - 13:31 | Link to Comment Clesthenes
Clesthenes's picture

You wrote, “there is nothing more terrifying than the prospect of an end of electronic money conceived literally out of thin air”.

You misconstrue, or understate, the method by which “electronic money” or any other kind of money comes into existence.

It does not come into circulation “out of thin air”.  It is much worse.

Before any kind of money – whether bank notes or bank reserves (electronic money) – is issued into circulation, the central bank requires the recipient to provide collateral, dollar for dollar, for the new “money”.

From the founding of the Federal Reserve to the first week of 2007 Dec, such collateral consisted of US Treasury securities and a gold certificate (a lien on Fort Knox gold – I mean, if any is left).  Since that point in time, eligible collateral has expanded to more than a dozen categories of collateral: student loans, car floor plan loans, credit card receivables, SBA loans, Mortgage Backed Securities (MBS) et cetera.

Can you believe it?  The dollar, the reserve currency of the world… backed by students loans, credit card receivables?!

Here is evidence the Federal Reserve has been captured by thieves or idiots, or both.

Student loans are bad enough as collateral; but, US Treasuries are far worse.  Such debt is marketable only as people believe that the US Treasury will be able to extract taxes from future generations of Americans.

In other words, when any government borrows money, it creates the necessity of imposing taxes on someone in the future to retire the debt.  It is the process by which one group of people financially cannibalizes a following group of people; by which one generation cannibalizes its children and grandchildren.

This government debt (on a worldwide basis) can’t be liquidated; it is practically and constitutionally impossible.  Following generations will not cannibalize themselves; and, American taxes require the consent of the taxed (among other requirements); since future taxpayers had no opportunity to give, or refuse, such consent, guess what?

There is now enough governmental debt to cannibalize following generations of Americans to the end of time (see one or two or both).

To describe Federal Reserve money as issued “out of thin air” does not adequately convey the picture of people eating their children.

Wed, 12/12/2012 - 14:14 | Link to Comment donsluck
donsluck's picture

Correct. Thus, the only way money can actually enter the system free of continuous compounding debt is bankrupcy. The more the bankrupcy, the more "free" money in the system. I would include bailouts as bankrupcy under a different name.

Wed, 12/12/2012 - 14:02 | Link to Comment smacker
smacker's picture

As a Brit, when Mr Carney takes control of the BoE; if he fires up the Ctrl-P printing press and abandons the (never achieved in ~10 years) 2% CPI inflation rate, I suspect he will be torn to shreds by some parts of the media and hounded out of offce by the citizenry. This could be the issue that galvanizes public action.

Such BoE action would quickly impoverish millions of people living on fixed pension incomes and those who have saved for their old age at the specific request of government and already receiving derisory interest returns.

And if the Chancellor fails to give him a bitch-slapping for even suggesting this, let alone actually doing it, it will cost the Tory Coalition the next election.

Wed, 12/12/2012 - 14:16 | Link to Comment Sandmann
Sandmann's picture

Tory Coalition - Next Election ? You are a dreamer. There won't be a Tory Party at the next election

Wed, 12/12/2012 - 14:30 | Link to Comment smacker
smacker's picture

There'll be a Tory Party at the next election, but it looks more and more like it will not get a working majority (entirely their own fault IMHO), while the LimpDems will return to their roots and form a coalition with Red Ed Milipede and his Marxist thugs, with policy orders coming from the Unions via daily faxes.

Britain is going down the pan fast...it's time for me to open up a new business venture selling piano wire and rope.

Wed, 12/12/2012 - 14:16 | Link to Comment Sandmann
Sandmann's picture

So how did those jets miss 200 West on 9/11 ?

Wed, 12/12/2012 - 15:05 | Link to Comment web bot
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