Wednesday, August 7, 2013


Early into the dog days of summer with little to write about and desperate for a rest as the four grandkids have been here for a few days now and they have won; they have beaten me down to a nub and left me for a goner.  They're out for a while undoubtedly inflicting untold damage on this unsuspecting town.  Perhaps a terror alert is called for.

Anyway, while this is going own, Mark Carney, the Canadian Governor of the Bank of England, made is maiden speech the other day.  It case you have missed it--and most have--the economic numbers in Blighty are looking very good as of late, so good in fact that the New York Times hasn't written a word about the Old Girl, no doubt at the request of Little Paulie Krugman, who, while it is still early in the game, seems to have gotten another one wrong.  While I have never met him, I am told that Carney is a very, very smart guy and all were waiting to see where he stood from a policy standpoint in following another very, very smart guy Mervyn King.  It was interesting.

Lord King (he is one now) was the moving force behind the British version of Quant Easing and the bestower of the 1/2% interest rate at the Old Lady.  But, like a good European Central I don't believe he ever made a speech in which the threat of inflation was not referenced.  I don't believe he was ever totally comfortable with his actions but recognized that the times demanded drastic action and enacted measures that he thought the times required.  Of course, Little Paulie kept screaming that not enough was being spent by the government, QE was too little (compaired to our economy/efforts it was huge) and it was clear to him that there would NOT always be an England.  So comes Mr Carney and rather than inflation, his overriding language was growth and while he spoke little on QE he announced that interest rates would remain exactly where they are until the unemployment rate falls below 7%.  The reaction among the Bank watcher universe was decidedly mixed but generally unfavorable.

Frankly, I was surprised to read some of the comments, the best one being, "Mr. Carney makes his first mistake."  I am also surprised at the performance of the Pound, 1.5501-04 to you My Son as I write this.  Our interest rates go up, Pound goes up.  Not the way it's supposed to happen.  Anyway, there are a lot of folks Over There who think that with the new growth rates it would have been wiser to be seen in a more protect against inflation mode as that would have instilled even more confidence in direction in the country was the "Escape Velocity" kind of growth  for which everyone hopes.  But the Gov. isn't there yet and the next few months will be most interesting to see how this plays out.  Of course a big problem is that the British work force is neither as well-trained nor flexible enough for the rapidly expanding...and changing...workplace of this century, therefore dropping the unemployment rate is not going to be easy.  Then again, perhaps they will follow policies such as those of the geniuses who run things Over Here and down will go unemployment as the work force heads to zero.  Somehow I doubt it.

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