Mervyn King's QE initiative is unravelling as Johnny Foreigner sees it as an opportunity to ditch his increasngly worthless bits of Darling Brown toilet paper marketed as Gilts. Sunday Telegraph business report under this programme in March the BoE bought £15bn gilts with its newly created Mugabe money but that the biggest sellers were Johnny Foreigner, £7bn, Investment banks, £2bn and the UK non-bank institutions, pension funds etc , who were intended to be the main recipients of the BoE's largesse sold £5.9 bn. The BoE never admits to failures but in bank-speak this was a limited success. And where does JF etc get his gilts from? Why he buys them from the DMO, Darling Brown's gilts shoppe and sells them to the BoE at the higher price they offer. I would like a piece of that action if I could get it!
So what happens next? Well its more of the same. The other slight problem is that when the cash ends up in the bank accounts of these institutions the bankers just hoard it and dont lend it on. Money only does good when it changes hands as any Mafioso will tell you. Worse the inevitable effect of Mugabe type central banking is Mugabe type inflation. To those who lived through the era of our very own R Mugabe aka E Heath in the early 70s with his Darling figure, A Barber, the resultant effects on inflation are a bitter memory. Worse came around 10 years later when interest rates had to be in double digits to control the rampant inflation. The sun rises and the sun sets and there is nothing new under the sun!
Squirrel Nutkin Blears and Elephant Ears Clarke seem to have fired the first shots in the get rid of Gordon campaign. Labour MPs will be feeling their fragile majorities very carefully and if they have any sense will crown Alan Johnston as leader. He has the best chance of pulling their nuts of all sorts out of the fire. Even an imbecile like Hume almost managed it in 11 months for the Tories in 63/64. Alan Johnston is far less in-bred than Hume and is a Labour man of the working class, not the benefit claimants and gays. He reminds me a bit of John Major who did turn things round for the Tories and defeated the Welsh windbag Kinnock in 92 in roughly the same time from a starting position well behind in the polls. Johnston leading Labour plus a cleanout in 10 and 11 Downing Street would certainly make things interesting and give Dave a few sleepless nights. I dont want to see a government of old Etonians.