Douglas Carswell's Blog

Mr Bean's monetary policy

Forcing folk to save less and eat into their nest eggs is deliberate government policy, admits the Deputy Governor of the Bank of England, Mr Bean.

The technocrats who really decide monetary policy intentionally favour those who consume and borrow, at the expense of the thrifty.

Is it any wonder we've moved from being a nation that saved (and produced things), to one that borrows in order to over consume?

In most markets, the way to ensure more of something gets produced, is via higher prices. How does Mr Bean believe financial markets will produce more credit if the price of credit - interest rates - is forced down? If fewer folk save, where will other people's borrowing come from?

Perhaps Mr Bean believes that it is for government to produce the credit, the way it was once believed government should make cars? Not very Big Society.

Will Mr Bean be any more successful at fixing the price of credit than his predecessors were when attempting to set the price of Sterling?

A generation ago the idea of free floating exchange rates seemed outlandish. Perhaps it's time to ditch the idea that politicians and technocrats should set the cost of borrowing.

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