29 3 mins 8 yrs

Mark Carney, just like his predecessor at the Bank of England Mervyn King, is a man not to be trusted (of course, it comes with the job). With the housing market in London and the south of England at full, inflationary ramming speed, he’s out with claims that the Bank might have to impose affordability tests on borrowers.

People could be stopped taking out mortgages worth many times their salary to buy new homes, the Governor of the Bank of England has said.

Mark Carney said in an interview that capping the size of mortgage ratios to salaries was one measure the Bank was considering to controlling the housing market.

This is the central state yet again trying to clear up a problem of its own making, by imposing yet more regulations and distortions. Of course the property market is in an inflationary boom. Rock bottom interest rates and the Chancellor’s decision to subsidise house buyers were always going to cause it.

The problem then is the government playing around with our money, but also – and most importantly – the insane idea that a central committee at the Bank can decide what the interest rate on money should be.

Almost no-one outside of loony Left economic circles believes that price controls cause anything but gross distortionary effects in markets, but when it comes to money, which forms one half of all transactions,  we’re supposed to believe that price controls on the cost of money are the way to go. Well it’s this finagling with interest rates which cause all booms and busts, and which send economies onto wild rollercoaster rides.

Like shoes, tomatoes, flowers and cars, the price of money should be left to the market to decide. Unless and until this happens we’ll be stuck on that roller coaster. Mark Carney knows this, but he’s a liar for not saying so and never to be trusted.

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29 thoughts on “ANOTHER CHARLATAN AT THE BANK OF ENGLAND

  1. The stupidity of the latest ‘help for buyers’, – the government offers a grant for folk who have difficulty in raising a deposit, – within days of the announcement house prices jump by roughly the same amount as the government is offering, making it just that little bit more difficult for those folk they say they are trying to help.

    As a bonus Agents are now charging a ‘finders fee’, making house purchase even more unattainable.

  2. The BoE, unlike the Fed, is wholly owned by the government so Carney is merely a paid functionary to do the bidding of his superiors.
    It must be tough working for schizophrenics.

  3. London real estate I might imagine is still being inflated at the top end by hot Arab, Russian, and now Chinese money?

  4. Phantom,
    Foreigners, syndicates with money and perhaps vested interests are buying into the London property market, wildly distorting the market and making it almost impossible for individual, couples and families to buy/move.
    This buying frenzy is rippling out into the provinces and will imo come back to bite our politicians in the bum, and shows again the absolute folly of putting your country up for sale to the highest bidders..

  5. Some stats from the Office of National Stats :-

    The percentage of households renting increased in all English regions and in Wales in the decade to 2011. London had the highest percentage of renters, accounting for 50.4% of households in the region.

    Between 2001 and 2011, the number of households buying their homes through a mortgage fell by 749,000. Some factors that might have impacted on mortgage buyers are: high house prices, low wage growth and tighter lending requirements.

    The most telling factor is the ratio of average wage to house price – for decades it was around 1:3, it recently reached 1:10 – that is based on a country wide average.

    And still the population is encouraged to grow, from some 52 million in 1950 to in excess of 63 million today, not counting an unknown quantity of illegals.

    Whatever our various governments have attempted since WWII, their overall record – from the populations point of view – has been one of dismal failure, and that includes some very worthwhile projects which while successful for a short while, have been quite literally vandalised by fashionable political dogma and practice into becoming more of a liability than an asset, – of course I am referring mainly to our education and health systems, – metaphorically daubed with political graffiti so as to be unrecognisable when compared with the original ideas…

  6. When Carney was appointed to the post of Governor, I thought it strange that in this country of ours, supposedly one of the more financially savvy countries, that we didn’t have anyone of our own ilk to do the job with the best interests of the UK at heart.

    Not that I think Carney is anything but honest, but his prime loyalty will always remain with his own country, and if a conflict should arise, it is they who will get his vote. That his first action was to imply that we should have ‘plastic fivers’ to replace our ‘paper’ currency, did cast some doubt re integrity, but I am sure that was just coincidental.

    His scepticism re low interest rates is encouraging, but I doubt that he will have the last word on that matter.

    Our politicians, of all shades and brands, seem very intent on selling everything of any value that we have, and if they cannot sell it they will hire nayone rather than a Brit to run it! No longer can we say that we are ‘property rich, but cash poor’ – now it is ‘Broke and in hock’…

  7. Ernest,
    Re Mr Carney; I too thought it very odd, but then I wonder perhaps if the move is all a part of the grand plan to turn the UK into an international branch of Manpower within the EU.
    Governments have sold off the family jewels, wasted the oil revenues, sold off our gold reserves at bargain basement prices, and now they watch as Astra Zeneca fights off a hostile bid from Pfizer.
    I have no doubt that Mr Carney is good at what he does, but the East India Company didn’t become great by headhunting foreigners to senior management positions…
    We have suffered such a collective loss of confidence in our nation that our political class can only see a future for the UK as part of something bigger.
    I still say we should come out of the EU trade worldwide and try and rebuild fences with those commonwealth countries we so shamefully abandoned at the hands of Ted Heath.

  8. Ah, it’s probably just one of those amazing coincidences again.

    Those whom the gods would destroy, they first make mad. Although the aphorism is overused, it accurately describes the dog’s dinner that British leaders have made of their society in the last half century. A good example of what I mean is the news overnight that the British government has appointed Mark Carney the next governor of the Bank of England.

    For anyone concerned for the British national interest, Carney has three strikes against him:

    1. Canada.

    2. Goldman Sachs.

    3. The Bilderberg group.

    http://www.forbes.com/sites/eamonnfingleton/2012/11/27/the-bilderberg-group-strikes-again-or-why-do-the-british-keep-drinking-the-globalist-kool-aid/

  9. It is very common practice for corporations ( British Airways, headed by an Irishman ), police departments ( NYPD, headed by a Boston native ) to reach out for leadership. Someone who came up with the ranks may not be what you need to shake things up, to have learned best practices from outside.

    If you think that the best possible talent always resides inside your organization or country or city, you’re nuts.

    Is monetary policy the only driver of house prices in London? Of course not.

    But our monetarist friend thinks that they are the only major factor, otherwise he might have mentioned the other factors. Truth must always be mangled to fit the theory.

    House prices in north England are one third those in metro London. This part of the country is similarly affected by Bank of England policy as is Kensington, but it doesn’t attract eager investment from rich foreigners, and it doesn’t have the more robust economy than metro London enjoys.

    I don’t know that the free market purists would even see the extraordinary real estate prices in London as a problem, apart from the fact that money policy may have something to do with it. After all, free trade and investment never has a downside. If a young couple can’t afford a starter house, then screw ’em. The free market is always right, after all.

  10. A Canadian background is a problem?

    Why, too many hockey pucks in the head?

  11. Phantom,

    “If you think that the best possible talent always resides inside your organization or country or city, you’re nuts.”

    Of course! – equally as nuts is your belief that ‘best talent’ is always for sale.

    In the global economy the best talent is usually poached from another company, and as such comes at a very high price, and usually when said ‘best talent’ is past their ‘sell-by’ date.

    In-house talent that has, as likely, grown with the company and helped it to achieve say, global status, are more likely to remain loyal to that company, it is the dissatisfied and delusional who are the most likely to ‘change horses in mid stream’. The transferee may well be good, but surely his loyalty will always be suspect?

    In the instance of govenmental posts, such as governor of the BoE, I would have thought, at the very least, some nationality qualification would be required. Something more than a visa, something that would prove to the nation that the holder of the post would really have their best interests at heart.

    Something similar perhaps to that required of your POTUS maybe where place of birth is the prime qualification – although I understand even that isn’t entirely fool-proof!… 🙂

  12. Go for it Ernest!
    Our country was not built off the backs of imported talent, although talented people both Jews and Christians found refuge here.
    Our Industrial and Agricultural Revolutions came about without any help from the Holy See, the European Union, The Entente Cordial or the Marshall Plan.. We did it ourselves, although I have been told recently that many of the great inventors were Christians of one sort or another, so we must also thank the Almighty for His insprirational input….. 🙂

  13. The top talent in private industry is always rare and it always comes at a top salary. The problem is when the mediocre talent gives the same top salary to itself.

    The NYPD commissioner salary at $205,000 is the same as it would have been had some local guy been given the job. But no local cop would have been Bill Bratton. You Brits turned down your chance to have him, since local talent is always best. Have fun with that.

  14. But no local cop would have been Bill Bratton. You Brits turned down your chance to have him, since local talent is always best. Have fun with that.

    Billy Bratton would have found himself hawgtied and toasted by our excellent Health’nSafety Brigades and the Massed Battalions of Political Correctness..
    He wouldn’t have survived a month here..

  15. Agit,

    Yep – the blood pressure did go up a notch or two!

    I just hate it when anything and everything is judged by its monetary value, and when honesty, integrity, respect and plain old commonsense are largely ignored.

    He who threw the money lenders down the steps of the Temple, knew what he was doing didn’t he? and here we are two thousand years on and we still cannot do anything similar…

  16. I am astonished that the UK turned down Bratton. An error for the ages.

    This was a chance to have maybe the best police leader in the world work for you, and your lovely Theresa May said no because he was ” too macho ” and a mere foreigner who couldn’t possibly teach anyone anything in the aftermath of the police performance in the London riots, etc.

    Your error, and NYC’s benefit, as we ultimately got him back. We thank Theresa May every day for this.

  17. That may be true Phantom, but Billy Bratton didn’t establish no colonies,
    nor build railways all over the world,
    nor give people the parliamentary system of government ,
    nor no end of all kinds of brilliant inventions,
    medicines,
    musicians
    and acts of military bravery, and downright stoopidity:
    we did!

    Now you go munching on that Big Mac and do a little humble reflectin’…
    😉

  18. AGI

    Hardly a defender of amurican ceptionalism, but for the last 100 years you have been living in a very deep shadow of amuricans. Having said that , a lot of exceptional “Muricans” are muricans by immigration not by dint of breeding

  19. EM

    ..the last 100 years you have been living in a very deep shadow of amuricans.

    Quite true,
    because our country had started its long decline.
    But probably better than any other Empire, we managed to disband ours reasonably peacefully
    (Don’t bring in the ‘whatabouts’)
    My point was that whilst I acknowledge that decline I don’t believe it has to go on and on for ever. We could cut back on our dependency on foreign doctors, nurses, surgeons, plumbers and ATM ‘mechanics” and with the right incentives start raising our own.
    We don’t need no “Texan tin star” coming here and annoying out Politically Correct crowd. Anyway as I said it simply wouldn’t work because our law system is different, our police work differently, and I seriously doubt they could have found a helmet big enough to fit his ‘ead…

  20. Perhaps your police need to start working differently than they do. They didn’t exactly cover themselves in glory in 2011.

    As I said then, upon taking control of the NYPD back when, Bratton said essentially that no one had the right to riot at any time for any purpose. This, in the aftermath of the recent Crown Heights riots.

    But perhaps that goes against British custom, so yes, its best that you left things as they were. It is so harsh to say that you can’t riot sometimes.

  21. Agi

    As a Canadian I would argue that your empire dissolved itself despite your best intentions

  22. Churchill actually wanted to keep the empire going but even his fellow small c conservatives saw what an completely untenable position that was.

    It was either grant independence in an orderly fashion, or lose them all anyway amidst disorder.

  23. As a Canadian I would argue that your empire dissolved itself despite your best intentions

    Whatever.
    Having an Empire just didn’t do it for me anyway.
    My people still had to labour, go hungry and cold, and fight wars as directed..
    It wasn’t exactly CentrParcs for the British common man y’know.

  24. Agi

    never said it was but you sound like you bestowed it on us like some kind of benevolent diety

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