Tuesday, September 28, 2010

Bank of England's Arrogance

Here is a particularly outrageous piece of arrogant, "let them eat cake" style bullshit from the inept Bank of England, headlined "Savers told to stop moaning and start spending".

The whole thing is worth reading, but to pick out the most offensive parts of the Deputy Governor's views (emphasis mine):
"Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested. They should "not expect" to live off interest, he added, admitting that low returns were part of a strategy."
That's right, the Bank of England's strategy includes keeping returns on savings low, so the responsible ones get screwed and the profligate mongs are rewarded.
Mr Bean said he "fully sympathised".
No you don't, you couldn't give a shit as you've already made clear.
But he continued: "Savers shouldn't necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit." He added: "Very often older households have actually benefited from the fact that they've seen capital gains on their houses."
So they must be punished for benefiting from a housing bubble created in no small part by, oh that's right, the Government and its lapdog Central Bank.
Mr Bean said that encouraging Britons to spend was one reason why the Bank had cut interest rates. They have been held at 0.5 per cent for 18 months, hitting rates offered on savings accounts. The strategy had led to Mervyn King, the governor, receiving many letters of complaint. But it was designed to return the economy to a reasonable level of activity as quickly as possible, he said. "The faster we can achieve that, the sooner interest rates will get back to more normal levels."
Ah-hah, I believe this is what Al-Jahom would call cognitive dissonance.
So, Mr. Bean, what you are saying is, if everyone spends instead of saving, that will enable the Bank to raise interest rates, making saving more attractive, reducing how much people spend. What about the older people who have spent all their money? Now they can benefit from the higher rates they have helped generate.

Fail, Mr. Bean. Fail.

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