Why Is Carney Determined To Destroy Our Economy?
by Vernon Coleman
A few days ago, I reported that there were rumours that interest rates might be reduced still further. (They are already at their lowest ever level.)
Why, I asked, would anyone do such a thing? Normally, when a currency falls the response is to raise interest rates in order to please investors and raise the currency back up to its previous levels.
I asked if it was possible that interest rates might be reduced in order to punish elderly savers who had voted for Brexit.
It was the only possible explanation I could think of.
Now, the Governor of the Bank of England has made it clear that he is considering reducing interest rates still further Ė thereby punishing savers who are trying to live on the tiny income from their savings.
Now, why would Mark Carney, the ex Goldman Sachs banker who is now Governor of the Bank of England, want to do such a thing?
The immediate response in the markets was for the pound to fall still further.
I wasnít surprised.
As I pointed out the other day, the sensible response to a falling pound is to increase interest rates.
Didnít Carney see that coming?
Can he really be a complete twat?
Well, the answer is maybe. But surely it isnít likely.
Maybe the answer is rather more subtle.
Maybe this has something do with the fact that Goldman Sachs spent a fortune trying to persuade Britons to vote Remain. I suspect that Goldman Sachs probably lost even more money when Britons voted for Brexit.
Is it conceivable that a falling pound will help Goldman Sachs make back some of their losses?
If that theory doesnít appeal to you, how about this one.
A falling pound will push up the cost of everything we import.
And since we now have to import almost everything except Cornish pasties and Melton Mowbray pork pies the cost to the economy will be phenomenal. Oil will cost more. Food will cost more. And so on and on. Our imports will become much more expensive.
The result will be that our economy, which is fine at the moment, will be in serious trouble. Businesses everywhere will be in dire straits.
And George Osborne will have a good excuse to cut services and put up taxes.
Just by coincidence, that is exactly what Osborne threatened to do if Britain voted to leave the European Union.
Of course, the Bank of England and its former Goldman Sachs employee, now the Governor, will claim to be apolitical.
But we know thatís not true, donít we?
After all, we all saw former Goldman Sachs man Carney campaigning furiously for the Remain camp.
Sorry, he wasnít actually campaigning was he? He was just making dire forecasts about the terrible world we would live in if we had the courage to vote the wrong way.
Copyright Vernon Coleman
Vernon Colemanís books include Moneypower: The Secrets of Power over Money and the Essential Secrets of Macro Investing. Moneypower is available on Amazon as an ebook.
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