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Another Former Central Banker Finally Gets It: "The Idea That Monetary Stimulus Is The Answer Doesn't Seem Right"
What is it about central bankers who wait to tell the truth only after they have quit their post. First it was the maestro himself, the Fed's Alan Greenspan (most recently in "Greenspan's Stunning Admission: "Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It"), and now it is the Bank of England's former head, Mervyn King, who yesterday told an audience at the LSE that "more monetary stimulus will not help the world economy return to strong growth." That this is happening just as we learn that in one year the world's 1% will collectively own more wealth than the rest of the world combined, and two days before Goldman's Mario Draghi unleashed up to €1 trillion (if not unlimited) in QE, is hardly as surprise, and will be surely ignored by everyone until the inevitable outcome of another "French revolution" finally arrives.
From the Telegraph:
In his first public speech in England since his term at the BoE ended in June 2013, Mr King said he was concerned about a persistent weakness in global economic demand, six years on from the depths of the financial crisis.
"We should worry about that," Mr King told an audience at the London School of Economics, where he was once a professor.
"We have had the biggest monetary stimulus that the world must have ever seen, and we still have not solved the problem of weak demand. The idea that monetary stimulus after six years ... is the answer doesn't seem (right) to me," he added.
Unlike the US Federal Reserve and the Bank of England, the European Central Bank has until now resisted trying to boost the economy by buying government bonds with newly created money, known as quantitative easing (QE).
"There are quite serious disequilibria both between and within economies that, for good economic reasons, are depressing demand. Simply lowering rates even further or adding more monetary stimulus is unlikely to solve that problem," he said.
Which is not only ironic but hypocritical because under King, the BoE bought £375bn of government bonds between 2009 and 2011. Mr King said this was right just after the crisis, but that using loose monetary policy to bring forward spending was not a long-term strategy.
Actually, wrong: since the entire global economy has been hijacked by the same people who would be sleeping under bridges had they not received a multi-trillion bailout in 2008, and since the global financial system now exists only to serve them, and to raise them from billionaire to trillionaire status, QE is precisely that: a long-term strategy, one which will ultimately pillage all the wealth of the middle class and hand it on a golden platter in some non-extradition country to the 0.001%.
Well, long-term at least until the 99% realize they have been subject to the most epic, historic robbery in the history of the world. Of course, by the time what was formerly the world's middle class realizes what happened, there will be nothing left.
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scumbag
Mervyn King "got it" all along.
As Upton Sinclair remarked: it is difficult to get a man to understand something, when his salary depends upon his not understanding it.
Monetary stimulus is not about fixing anything. Its simply a holding play to allow them to extract as much wealth as possible before we all give the fuck up. There is nothing more useless than an unmotivated slave.
Former central banker. Yeah, they're all tough guys once they're no longer in a position to actually do anything about it.
Exactly. Stating the obvious after benefitting handsomely from massive fraud. look, in the absence of real consequences, nothing changes. Make them return the stolen wealth and title or take their fucking heads. It really is as simple as that.
Lampost & rope. All bankers lie, and this POS lies too.
The indecision and lack of conviction from our monetary leadership is very worrying. We desperately need a unified global monetary policy in order to effect lasting economic changes in the global economy. I fear that if our leaders cannot come to a concensus on what is needed for world economy, we may be forced to set up a global governing body with the power to override the decisions of the nation states. This will allow us to enact monetary policy at a global level and create economic stability and growth across the globe in the most efficient manner possible, although it will also come with a loss of sovereignty and will be widely resented by nationalist and right-wing interests.
king made enough comments while he was in the jungle that he got it...but im sure the darkside keeps all these guys in check....or a galvinized ribbed 16 penny to the head 8 times may influence ur options...
A system based on creation of money from nothing at the whim of a few will always degrade the morality of the culture as a whole, and end in catastrophe. We have front row seats for this round (in history), but the important question is, will we prevent it from happening again?
Cue the Krugman smackdown video. How can doing more of the same things that created the problem be the cure for the problem?
So how big of a retirement package did he get? All that QE money must have padded it nicely. He should shut his dick hole.
Ah, MDB is back on target - good to see you so drolling trolling...
And I submit "disequilibria" as the ZH 'Word of the Week' (TM)
Nothing different than the guy who gets religion in the last two weeks of his life....
Fine, if it works for him, but he get no points from me. No difference than if he didn't change his view.... Actually maybe less.
We don't understand how making the rich even richer and blowing bubbles in housing, oil, and derivatives hasn't created more jobs, reduced inflation, and helped stimulate growth.
Pssst .... Hey Mervyn ... that warm soothing glow you see in the distance isn't a beautiful sunset ... it's the torch and pitchfork parade getting ready to break the horizon ... you've dug yourself a very deep hole old man ...
note, though: "Unlike the US Federal Reserve and the Bank of England, the European Central Bank has until now resisted trying to boost the economy by buying government bonds with newly created money, known as quantitative easing (QE)."
+1. See my post below.
You make that sound like it was an active choice. If the ECB could have done it on their own as easily as the Fed or BOJ did over their (fully integrated) sovereign nations, it would have been done years ago. Only German push-back has stood in their way.
In the US there are no governments or entities that can push back on the Fed. Imagine California trying to push back on the Fed and prevent them from doing QE. The mere thought of it is ridiculous in the US. But Europe is clearly NOT the US.
Almost like he is lighting a bag of poo on fire at the ECB stoop.
first, it was, imho, an active choice. lots and lots of thinking was put into the LTROs
second, it's not always and only Germans. plenty of other europeans are against QEs and monetization. for criminy, we wrote it in the treaties
third, I agree. Europe is not the US. Actually I spend quite a lot of comments on this theme
another two days and we'll hear from Draghi what his merry bunch of national governors has concocted this time. I expect some national bank "action"
Those damned treaties and constitutions always getting in the way of things. I know you guys are doing your best to sweep that stuff aside as quickly as possible, just as we are in the US.
If I may make a suggestion: you need to stop allowing individual nations within the EU to have any say on what the ECB does. We unleashed the Federal Reserve in the US about a hundred years ago with no restrictions on it's power. And look how well we're doing!
(Yes, that was sarcasm. I rarely point that out but I've found my humor sometimes doesn't translate into European.)
An advisor to European Court of Justice stated, that QE under specific terms is not against the treaties. So, before this could be challenged Draghi needs to create facts fast.
I challenge the whole "need" thing. there is no need for QE, except in the mind of some die-hard megabanksters and Dr. Krugmans
Even if it does: Who cares? Who cares about rules and treaties when the stakes are so high?
E.g, was the bailing out of banks foreseen in any constitution? Nope. Are wars compatible to intl rules? Or massive spying? So same goes for QE, whether it's allowed or not...they'll do it.
some continental europeans have no humour to write home about, so don't worry about the translation effect
we have actually the national banks to restrict the power of the ECB. and the sovereigns to restrict the power of the EU. does not always work perfectly, but humans seldom do
So what, exactly, is on the ECB's balance sheet? And how was it purchased?
if my memory serves me well, all national banks contributed to the original equity, with a key. funnily, even the Bank of England is a shareholder, albeit without voting rights
to gain voting right, the BoE/UK would have to adopt the EUR, and such horror is too much to contemplate, for both Britons and increasingly for us continentals as well
Nothing new: Germany has a tendency to always resist new global trends for a long time before jumping on the train when most everyone's already getting off. But once on it, they'll ride it more dogmatically than anyone else...(note that this could be either good or bad, in principle)
Of course QE by itself doesn't work, nobody ever believed that right? What it does is inflate markets even more thus stabilizing them in the short term and buying govts some time. Either they use it to better their policies, or they don't. Usually the latter.
Fine, European Central Banksters can be executed right after the US ones.
It really is that binary....
Is that like a reformed whore? Did he have "daddy" issues too?
Logged in just to up arrow you for that pithy quotation.
Those chosen to assend to high office must unfriend themselves with truth. Only after leaving office is it permisible to attempt to rehabilitate one's reputation.
I don't particularly subscribe to all the conspiracy theories about the 1%. I don't deny that QE is a bad policy in the long run but I think the motivation is purely to keep the system from crashing....as much for the benefit of the average person as the rich. Could be wrong of course.
It's not the 1%, it's the 0.01%.
Respectfully: you are naive.
Top 0.1% of Americans Hold as Much Wealth as Bottom 90%
http://www.breitbart.com/big-government/2015/01/19/top-0-1-of-americans-...
"It was an accident" - ZWO bannking overlords
And while we can ponder all the possible conspiracies at play, the fact that wealth is increasing as a percentage of the population for this top .01%, should be all we need to know to understand the motivations for the current policies. They always say if you want to discover the root of any problem simply follow the money. Nothing is an accident, (or in "political correct") unintended consequence.
the root of it is the globalized economy and the effects of the Pareto distribution. which has nothing to do with the real problems in the US
the first affects the world, the second... too. but if we don't disentangle the two we won't find any solutions
as a reminder, Bill Gates sells his product in the whole world, making lots of money more then if he would be restricted to the US market alone. does he pay a special tax for this privilege? no, he actually pays less, in proportion, to most Americans. And there you have a perfect example for this entanglement, the global effect of the Pareto Curve and the special situation of the USA
Not sure I understand your point. If the Pareto curve exists in nature, I would assume it will remain with us. If a 80/20 distribution is the natural ratio, then I would assume it is also the most efficient ratio as otherwise it would not exist in nature. When we see that ratio shift to say 90/10 or 95/5 then yes, we may well have a problem. But the socialist view is that no such curve should exist. All things are uniformly held by all factions. This doesn't work. Or the principle of ownership to work, to have a beneficial outcome, requires responsibility for that ownership. AS corporations and governments grow in size their accountability, their responsibility declines, as it becomes shared by groups of individuals so large that it becomes impossible. If a business is owned by too many partners, ultimately no one is responsible and it ultimately fails if no one person or relatively few people does so. In my world, we are payed, not so much for doing as taking responsibility for what we do. The more responsibility we take, and are successful, the more we earn. Hire someone and tell me this isn't true. Once the scale becomes so large, the model exists but its functionality doesn't. There are many examples where models break down. One is in dealing with high tech high trend businesses that due to market dominance and ownership of specific technology have huge advantage. Show me a company with Microsoft or Google profits in say, mining, or furniture manufacturing. new industries always have statistics outside of norm. And they are continually thrown back in our face as being the model of how things should be...which is stupid...as stupid as suggesting that we all could retire and live from clipping coupons because the top 1% do. The exceptions exist because they are exceptions, not the rule.
Oldwood, take one island, 10 inhabitants, closed economy
2 own 80% of the island and everything it is on it, 8 own 20%
the two, most call... Dad. Joe and Jim, with their wives Jane and Jill, and their 3 children each
take 10'000 inhabitants. 2'000 own 80%. But the Pareto distribution works finer then that, and 20% of the 20%, i.e. 4%, own 80% of the 80%, that's over half of the island already
that's the new top-of-the-top, the upper class of 10'000 -> 400
three wealth classes are born. the 400, the 1'600 and the 8'000 (which btw is classic ancient Athens. the "400" had to sponsor a warship each in war)
now make that calculation for nearly 10 billion and see how many top-of-the-top new "super-rich" classes this can create... if left to it's "natural" course
the point I'm trying to make here is that if you have two closed economies next to each other, each will have it's Pareto distribution
and if you merge the two economies to one... the Pareto distribution shifts. up to the nearly completely globalized economy we have now
And let's use the maths to the 3rd level...
20%^3 = 0.8% (as close to fuck as "1%" possible.)
80%^3 = 51.2% (smells like "half" to me)
The way I see it, the globally richest 1% own half the global wealth.
Wow, now maths has a political agenda??
What about increment of association?
When Tesla gave us Polyphase power, he multiplied the labor value of mankind by many thousands of times. Did he become thousands of times richer, even though his contribution to humanity is beyond measure?
What about goods of the earth? Since humans are born unto this earth, they should not have access to it denied by a class that thinks the "earned" it somehow.
This whole idea about paretos and ability being the only contribution to wealth generation is false.
All wealth is Labor + Machine + Earth. Earth provides energy and materials, and machines multiply the output. In many cases wealth is made without much in the way of labor inputs anymore, especially as smart machines and computers take over.
Financial capitalism will aggregate this wealth of the earth + Labor to itself. It is a defect in Finanical Capital itself.
All inventors and creators, when they die, don't think to themselves - Gee I hope the permanent improvement in efficiencies that I created, I want that wealth to pareto to financial actors. I also hope that this wealth goes to people who somehow think they are more clever and deserving, even though they have no idea they were born on third base, and their ancestors gifted much to them.
The natural growth curve is fast at first, then flattens out and goes into steady state. Did your feet keep on growing into old age? After awhile you would not be able to walk.
Financial capitalism wants to overlay an exponential curve onto human civilization and also what is a natural organic planet.
We will need a new kind of money.
So what? I've worked my ass off, saved and invested wisely to get where I am (somewhere in that 1%), how many of the bottom 20% who have negative to zero net worth does it take to equal my net worth? - a whole fucking lot of them...
The presentation of statistics is often manipulated to achieve aims - are you suggesting everyone should be made equal by redistribution by the State?
If you want understand wealth tranfser by financialization, you need to look at the differences in net worth between the 1% (~3 million people), the .1% (~300k), the .01% (~30k), the .001% (~3000 people), and the .0001% (the 300 "financially" richest Americans) - and how that distribution has changed over time (as the economy has become more fincialized and the Central Bank has become more active to mask the deterioration of real economy).
The .0001% have stolen/transferred moar wealth and savings from the rest of the top 1% than they have from the bottom 50%. (isn't math fun...)
If you want to address the broader wealth disparity I would suggest looking at why the USSA has educational and tax and state benefit regimes that favor incursion of debt over savings and investment, and once that is understood look into how debt can be and often is "transformed" into wealth for those with scale and leverage (converting subprime slime CDOs into tangible wealth is only the beginning).
+1 or the broad implications of US student debt. or those of "everybody ought to own his home". or those of the 401(k) accounts. or those of "companies are people and my friends". or...
And that is why, my American friend in CH, I favor that kids (in high school) be educated in Financial Math, Game Theory, Trading and Small Business skills.
Those who learn these skills are far more likely to climb the socio-economic pyramid. Those who do not, have probably been taught their "preferred place", because their parents thought it a good and ideologically-comforting idea to keep them at the same niche that they occupy: the 99%, or more likely the 80%, if even that.
Although, being born in or joining the "2% Club" helps that vertical take-off into the 0.1% or higher.
You weren't too far off until here:
".as much for the benefit of the average person as the rich.
It's to keep the system of enriching oligarchs and cronies that they are saving.
It's also worth noting that the "average" person in the US has no assets or investments.
"stimulus after six years ... is the answer doesn't seem (right) to me,"
Of course not ya Dickhead. You Bankster Scum Fucks produce or contribute absolutely nothing to the real Econmy or Free Market Place.
You Pure Evil Psychoapthths only export inflation & contribute death, murder, rape, pillage & destruction Globally.
I think I'll side with you on this one, facing the ZH firing squad, because I've never understood why it would be in the interest of the 1 % or 0.1 % or 0.01 % to bankrupt all the others? It's like Johnny Weissmuller intentionally pissing off all the piranhas while crossing the Orinoco.
Sure, they're greedy and remarkably amoral, but it just doesn't make sense to condemn everybody else to abject poverty.
"Sure, they're greedy and remarkably amoral, but it just doesn't make sense to condemn everybody else to abject poverty. "
If becoming rich comes at the cost of making everyone else poor, you think these, in your words, greedy and immoral people won't go for it?
I should have added "cunning", because generally these people aren't stupid. Wouldn't you think they know the faith of the parasite and therefore want to make sure the general population at least retains enough not to riot?
If not, the whole situation reminds me of someone being the only prepper in town, well stocked and well armed, but surrounded by a bunch of people with starving kids. Not a situation I'd like to be in.
You should have also added "delusional", because I think they believe that all of their wealth and the government will save them from the riots. And there is a lot of history to suggest that oligarchs will push it to the very limit, and over the edge.
Why, that's because you're reasonable, and can't fathom the infinite greed of a criminal mind. Trust me, they will run this until they have all the money. They have no "off switch," hence the need for incarceration and stiff penalties todeter their behavior. The laws on the books have long been sufficient for this purpose, but are not enforced against the few.
The system is specifically for their benefit in a world of illusionary wealth. The nature of a fiat currency is increasing exponential debt growth in order to support the promises of those that control the population, aka the State.
A great example is Old Man Buffet, Warren not Jimmy. He was swimming naked with AIG and would have been completely insolvent if it were not for the bond purchasing of the Fed and the TARP bailout. Coincidentally, Warren toes the government line with his seminars and gets his sheep to "invest" in these ponzis. His wealth continues to grow and the sheep continue to get fleeced through Warren's advice. It is not a theory to say that his wealth would have disappeared if it weren't for his close ties to the corporate welfare teat.
Many commenters on this page are part of the global 1%. I personally am. Although I miss the cut for the U.S. 1% by a fair margin, I make the global 1% easily. In a world where the median income is something like $3,000/year, it's not that hard.
Fear of "losing everything" is what motivates the ignorant.
When in the history of money has QE worked? Been tried many times, all batting .000 at the end of the day.
Nothing is ever "lost' in money- it just changes shape and/or ownership.
Fear those who are in power and are afraid of losing it by doing what is best for all.
> I don't particularly subscribe to all the conspiracy theories about the 1%...as much for the benefit of the average person as the rich.
beneficial for the average folk...much in the same way as the drive to "spread democracy and freedom" throughout the world, yes?
central bankers are expecting a shortage of rope
Because he knows the truth:
"... if more money were going to the market, then they would lose much of their value and we would lose profits because we are the ones who print money! That's why we invented inflation, to keep governments in fear and directing money back to us through the so-called Quantitative Easing Policies. [...] When money start to spread in the society "above acceptable limits", we create financial crises to take them back. We dictate governments to take measures and apply austerity policies directing money back to us. We keep money valuable to everyone and secure our profits."
Funny how these guys always come back after they shit all over the place to inform everyone that it stinks.
Slow roast King you asshole!
sounds like that old fucker has been cut off from the oligarchs' spigot.
Bernanke might have been correct in theory - dropping money from a chopper may well help. The execution, however failed, as a few guys hoovered most of the dough out of the air before it ever hit the ground.
I would replace "Bernanke" with "Krugman" in your statement. It would then be a little closer to reality.
In a more closed system analysis that is devoid of corruption, it very well could be fair to say that the relative value of a currency (and debt of course) is immaterial. It is all just faith anyhow. Even gold.
However, the moment that we open the analysis, expose it to human nature, globalization, politics, etc. - it all goes to shit. It is never about WHAT money is. It is about WHO controls it.
The helicopter was only designed to fly over the rich.
Mervyn King?... NOW he says this???
Nail gun please!
And in other Shocking news ,
Water is in fact,.....wet.
He always stated that since 2008 I recommend everyone to read his letters. He said that solvency is the issue not liquidity therefore criticizing QE. Reason why he was replaced with Goldman asset.
Hmmm... That one would have swung real nice too. Heh, heh Darn it! They're gonna take all the fun out of it through these "come to Jesus" moments/revelations...
FORMER is the key word here....
When the monetary stimulus is going to the same four or five criminal fucks at the top, yes, it really does NOT do much for the real fucking economy.
Gee, what a genius. Please, can we start executing these fuckers already?
When will everyone simply understand that Central Banks are nothing more than tools used by Governments to consolidate power, consolidate wealth and destroy the middle class?
We live under the rule of ruthless dictators who tell us every day that if not for them we would be eaten by wolves.
Sounds to me like his angle is more about getting Western central banks on the same page... which, in itself, is just more misdirection. Setting the stage per se.
These guys don't quit and find a conscience. They just move into PR roles.
... central wankers ...
I'm still convinced that "Print Mortimer Print" will continue until blood runs in the streets.
Something's up. A few days ago it was some Goldman Sachs underling at the BOJ.
Pull the string!!
Pull the string!!
Return to strong "growth?" You mean like 1969?
If the ECB isn't buying gov debt then who exactly is buying Greek bonds?
SIR Mervyn King (of inflation) has always talked with a forked tongue and should have been sacked in 2008 if not earlier for his acquiescence in some of the frauds committed by the banksters, eg LIBOR rigging. Let alone for saying/doing nothing about the property price bubble being inflated by his fellow Marxist Gordoom Brown.
Not only does this article expose King's forked tongue on QE but he was also exposed in this RT news article recently which appears to allege that he ran the BoE Board rather like a fan club or cult: http://rt.com/uk/220543-bank-england-financial-crisis/
I'm afraid that King was very typical of so many of the senior nameless, faceless apparatchiks who run the British Establishment: utterly useless and only in it for themselves. Then they retire on fat index-linked taxpayer-funded pensions with their Knighthoods and MBEs etc.
When is Krugman retiring?
...When you do your thing, Dexter- what the fuck is taking you so long? Lots of swamp down here to "retire" him into....
What is a shit rope?
Pure cultism. A somewhat intelligent human that cannot understand the realities outside of what he believes. If printing really worked the results would produce at the beginning and taper printing accordingly. Six years later all you have is insurmountable debt and no improvement to society. For the financiers to be reluctant to admit defeat means they are waiting for the mothership to take them to the big bank in the sky.
None of these Central Bankers speak the whole truth and nothing but the truth... Truthful insight can be gained by revisiting President Jefferson's thinking:
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."
He knew it all along. Just like Alan Greenspan, just come clean before the pitch fork riot comes
"...the world's 1% will collectively own more <claims on> wealth than the rest of the world combined..."
Not real wealth.
FYP?
It's not stock, its flow.
Flowing QE into buying debt instruments does two things: 1) It props up the price as if there is a lot of demand, only we know the demand is false. 2) It rewards the holders of instruments. For example, mortgage backed securities were fraud, that was rewarded. Effectively, this is like giving insurance to the owners of the Casino.
QE then goes into financial Oligarchy. Financial Capitalism is effectively predatory, in that those who create the money use it to then buy up the world. Labor, who uses money, must then transfer their wealth and energy.
Bankers are presiding over a system that can only have bad outputs. Debt instruments flow into markets, and then grow with usury. Debts might get re-hypohtecated at a SPV in a TBTF bank to make a MBS. The maneuvering will be opaque in order to confuse the sheeple. Lines of longstanding law will be broken in order to take rents.
The credit that issued, if done with private debts, will tend to push FIRE. Finance, insurance and real estate, are what is on the double entry ledger. So, banker credit will tend to aim at this sector. Again, it is a flow problem, where the flow vectors into asset inflation.
If it is public debt, it comes with a TBill bond, and that puts the whole population on the hook for the future. The debt will grow but the money it spawned will not. Government may or may not spend on a productive "channel" path.
If it is QE money, it comes from nothing on a keyboard, to buy a debt instrument out of banker reserve channels. This changes the composition of money supply to less debt instruments and more money. A lot of QEmoney is being trapped in reserve channels at banks, as reserve money now earns interest. The FED does this gifting to banks to keep rates from collapsing toward zero on overnight market. Banks now have plenty of cash reserves, and they can gift themselves large salaries and bonuses from the profits. They also use the gift to create low interest loans and do a carry trade, thus distorting other economies.
So, it is not stock. QE is swapping for debt instruments that grew with usury, so some of the stock is increasing to match debt growth. But, the flow path is mostly trapped, or it vectors into oligarchy.
Those that need money, the working class, are actually under drain pressure. So, the upper loop of the economy, may may deign to shower their riches down on the "huddling masses" or not.
It's a path problem, and the path in turn is a function of how money is created. Our current money system is a division of debt instruments. Said instruments predicate a path. The system itself is faulty, and it was built up over time in an ad-hoc fashion, to serve the needs of a predatory rentier class. This class will never admit their shortcomings, and in fact have shown themselves to be murderous.
Finance capitalism or financial capitalism is the subordination of processes of production to the accumulation of money profits in a financial system.
Under a Federal Reserve System, finance capitalism equals crony capitalism equals socialism.
The current confusion in word definitions and deliberate misuse of the language, such as socialism, capitalism, state welfare capitalism, fascism, liberalism, conservatism, according to former editor of The New Statesman Paul Johnson, is made use of by the Marxists “to promote their own ends.”
Crony Capitalism - Wikipedia
States often said to exhibit crony capitalism include the People's Republic of China; India, especially up to the early 1990s when manufacturing was strictly controlled by the government (the "Licence Raj"); Indonesia; Argentina;[4] Brazil; United Kingdom; Malaysia; Israel;[5]Russia;[6] the United States; and most other ex-Eastern Bloc states. Wu Jinglian, one of China's leading economists[7] and a longtime champion of its transition to free markets, says that it faces two starkly contrasting futures: a market economy under the rule of law or crony capitalism.[8]
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of dirigisme.[1] Crony capitalism is believed to arise when political cronyism spills over into the business world; self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals.
The term "crony capitalism" made a significant impact in the public arena as an explanation of the Asian financial crisis.[2] It is also used worldwide to describe virtually any governmental decisions favoring "cronies" of governmental officials. In many cases, the term is used interchangeably with corporate welfare; to the extent that there is a difference, the latter might be restricted only to direct government subsidies of major corporations, excluding tax loopholes and all manner of regulatory and trade decisions, which in practice could be much larger than any direct subsidies.
http://en.wikipedia.org/wiki/Crony_capitalism
Does he own or use a boat?
Small plane trips now and then.........................
Financial greed and Fed lust for power have led the van to world economic collapse. Some, including the Swiss, have opted out of the system. Paul Craig Roberts explains:
“Why did the Swiss remove the peg? It was not a costless action. It cost the central bank and Swiss export industries substantially.
“The answer is that the EU attorney general ruled that it was permissible for the EU central bank to initiate Quantitative Easing–that is, the printing of new euros–in order to bail out the mistakes of the private bankers. This decision means that Switzerland expects to be confronted with massive flight from the euro and that the Swiss central bank is unwilling to print enough new Swiss francs to maintain the peg. The Swiss central bank believes that it would have to run the printing press so hard that the basis of the Swiss money supply would explode, far exceeding the GDP of Switzerland.
“The money printing policy of the US, Japan, and apparently now the EU has forced other countries to inflate their own currencies in order to prevent the rise in the exchange value of their currencies that would curtail their ability to export and earn foreign currencies with which to pay for their imports. Thus Washington has forced the world into printing money.
“The Swiss have backed out of this system. Will others follow, or will the rest of the world follow the Russians and Chinese governments into new monetary arrangements and simply turn their backs on the corrupt and irredeemable West?
“The level of corruption and manipulation that characterizes US economic and foreign policy today was impossible in earlier times when Washington’s ambition was constrained by the Soviet Union. The greed for hegemonic power has made Washington the most corrupt government on earth.
“The consequence of this corruption is ruin.
“’Leadership passes into empire. Empire begets insolence. Insolence brings ruin.’
“Ruin is America’s future.”
http://www.lewrockwell.com/2015/01/paul-craig-roberts/revolution-in-europe/
"golden platter in some non-extradition country to the 0.001%"
carrying wealth concentration to its conclusion, one person owns everything, pretty much back where we started.
absolute monarch -> aristocracy -> democracy (1970's equality levels reach their peak) -> global aristocracy -> supreme being
What a Dick!
Looks like King wants to keep his head come the revolution. I expect we will see more and more people distancing themselves from their contribution to the mess as it becomes obvious to even the most 'trailer-parky' person among us that the elite are stealing everything they can and leaving the middle class to pay for this. Future debt slaves will rue the day that they have to live in conditions not seen for several hundred years while the elites continue to benefit from modern energy systems and technology (don't think so? Just look at what the warming alarmists have proposed for solutions).
To all the people of the world, especially the Western world: Just keep on bending over, it's not so bad once you get used to it.
1 in 1000 in this world are probably more exceptional than the masses. The problem is the way wealth and debt has been created for the last 15 years and who has benifited from it. I know most people on this site would agree with me that the masses are somewhat of a problem. I'm not trying to be an elitist but when you do deal with the average Joe on a daily basis its hard not to. I have no problem with people that are smarter and more driven than I am succeeding, unfortunately, the last 6 years have allowed the opposite to happen. Don't get me wrong I'm not saying that those who run THE CENTRAL bank are exceptional, they are NOT. They have crushed what true capitalism is all about, by bailing out the unexceptional lazy businesses and banks that should have failed. Instead of people learning lessons from their mistakes they have been rewarded for their failures. They have hijacked the system (not really since they own it), and skewed the playing field. Failing up should never be the case. Unfortunately THE FED has allowed those in power (not those that are trully exceptional) from being accountable for their mistakes.
"Another Former Central Banker Finally Gets It"
"What is it about central bankers who wait to tell the truth only after they have quit their post."
It is that they got it all along. Bernanke knew in the 1980's, that QE wouldn't work, yet did it anyway. Greenspan knew that 1920's FED policy lead into the Great Depression, yet doubled down on it anyway.
What the central bankers are doing is political, not economic.
Quite right. These CB chair satans need to be thrown to the wolves.
Oops....
Typical, same pattern with retired generals, spies, priests etc... only after they feel they've secured their retirements, do they speak up and get ignored by their own mainstream media, which is why they feel they can speak out at all... they know they will only be heard on the fringes, which is what cointel is all after, the attempt to control all sides of the picture simultaneously... different strokes for different folks... anything but the clearcut truth... which none of them really know anyway, and why they feel safe speaking up at all, even if it's only in their retirement.
Rats and sinking ships spring to mind....
These broad stroke articles which criticize gov't stimulus are getting tiresome. Obviously pumping money in an appropriate manner can in part provide some economic growth. The execution of this tactic in various countries has been an absolute disaster. The cronyism prevents it from ever working. Pump money into small businesses and you might get some results.
You don't seem to understand the depth of the problem. It's not up to you or me, for now. It's up to them, for now. And when one retreats, that's a good thing.
Arrest him.
Hang Him!!!
I think some of the Zhers got Mervyn King all wrong. Not all central bankers are cut from the same cloth. Back in 2010 when he was still the governor of the BOE he was surprisingly frank about the possible need to eliminate fractional reserve banking and the fact that the problems we faced then (and now) is not a problem of liquidity in the banks but a problem of solvency. As far as I can tell, he has always been forthright about his views despite the pressures from his political masters.
Been to several LSE events to see him speak and I can only tell you that the impression I got from him is rather different to what one would expect from a central banker. His views and the views of the majority of intelligent ZHers are surprisingly very similar. He is not your typical obsfucating, two-faced, megalomaniacal, thieving central banker.
http://www.zerohedge.com/article/head-bank-england-said-march-2008-we-ha...
http://www.zerohedge.com/article/bank-england-head-mervyn-king-proposes-...
Tomorrow Geithner tell us the banks shouldn't have been rescued and the FED shouldn't have printed money
King knew all along that his duty was to expose the financial crime in the city of London, and call out the stupidty of the neo Keynsians besotted with money-printing -and in the local parlance- he completely bottled it.
Even now, these statements are carefully worded so as not to cause offence.
Dear Mervyn,
"the answer doesn't seem right to me" is not the statement of a confident man.
"we should worry about that" is the stement of a snivelling s*1t.
At your age you should be worrying about your place in history, so the sooner you start calling a spade a spade, the better.
Grrrrrrrrrrrrrrrrrrr.