The BoE Will Be Graced with a Superhuman Governor
Yesterday the financial press was aflutter with reports about the nomination of the current chairman of Canada's central bank, Mark Carney, as the new governor of the Bank of England.
Most of the reports were gushing about the alleged ability of this central planner, to, well, plan better than his peers. Apparently he is needed now to 'rescue' the UK. A good example for this is this article at Bloomberg, from which we quote a few excerpts below:
“Carney is a fantastic central banker,” Edmund Clark, chief executive officer of Toronto-Dominion Bank (TD), Canada’s second-biggest by assets, said in an interview yesterday. “He’s clearly been recognized around the world for that, and so Britain, from its point of view, did a smart thing.”
A day after watching one of his four school-age daughters play ice hockey in downtown Ottawa, Carney, 47, was named yesterday by U.K. Chancellor of the Exchequer George Osborne as the first ever foreigner to run the 318-year-old Bank of England and its youngest boss in more than half a century.
“We needed the best, and in Mark Carney we’ve got it,” Osborne said at the end of a 10-week official search after the Canadian’s virtually unique blend of experience in banking, policy making and regulation beat out other contenders.
Carney “is head and shoulders above the other candidates,” David Blanchflower, who helped set U.K. interest rates until May 2009 and now teaches at Dartmouth College in Hanover, New Hampshire, said yesterday on Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays and Vonnie Quinn. “He’s going to come in with a big broom and sweep clean at the Bank of England, which is what is needed.”
“In an environment of international financial regulation, having somebody who has a strong track record in that is clearly important,” Donovan said. “The nationality is entirely incidental.”
Well, we do believe that 'nationality is entirely incidental' when someone has been with Goldman Sachs for 13 years. Ex-Goldman employees have taken over important regulatory posts all over Europe after all, including the presidency of the ECB.
Hundreds of articles in style and tone of voice akin to the above have appeared in the financial press yesterday. We have yet to come across even a single critical remark. It astonishes us to no end that central bankers have become such exalted figures in our modern society. How can bureaucrats inspire such unrestrained awe? Consider some of the statements above.
See, he is human (watching his daughters play ice hockey), but in reality, this bureaucrat is a regular super-human. What would we ever do without irreplaceable, exalted personalities like him? How could the market economy ever function properly without such people 'directing' it?
Allegedly Carney has left Canada in ruddy economic health. No-one deigned to mention that Canada owes its seeming economic health largely to high commodity prices these days, which to be sure owe far more to the actions of Ben Bernanke and the PBoC than to Mark Carney. What is 'incidental' is that Carney happened to occupy the post of central bank chairman in Canada just as this phase of high commodity prices occurred.
However, what will this 'giant of central banking' (he was voted 'central banker of the year' by some magazine a year or two ago) really leave Canada with?
How about: the biggest credit bubble in the country's history, one result of which is that over 30% of Canadians confessed in a recent survey that they have trouble sleeping due to worries about their huge debts?
How about a real estate bubble that has in places grown to such proportions as to stand as almost unique in human history? A bubble that absolutely dwarfs the real estate bubble that has come to such ignominious grief in the US and elsewhere?
His 'great feat' consists of having nudged the central bank's administered interest rate to all of 1%. Well, BFD. We realize of course that in order to arrive at this carefully planned, 'just right' one percent interest rate, countless meetings had to be held and reams of economic statistics had to be poured over. And yet, it is almost certain that this interest rate deviates from the natural rate indicated by society-wide time preferences and therefore distorts prices across the economy and causes malinvestment– which as it were should be blindingly obvious considering the real estate bubble.
We should not cower in awe before these bureaucrats, who have on the whole probably held back economic progress by decades and created untold misery in many regions of the world, while in the main greatly benefiting the banking cartels over which they preside.
That Mr. Carney's stint at the Bank of Canada is today fondly remembered and destined to become part of its lore of 'success' is a complete coincidence. Had Mr. Greenspan vacated his post at the Fed just five or six years earlier than he did, he would today also be remembered as one of the 'greatest central bankers ever', simply because his chairmanship coincided with a big boom.
This has nothing to do with the 'planning abilities' of these men. This is not to say that Mr. Carney is not an intelligent and talented man. He undoubtedly is that, which is already proven by where his career has led him. However, it is the height of conceit to believe that anyone can 'plan' the economy, or know what the proper interest rate and the proper height of the money supply should be. These are things that can only be optimally determined by the market. The reality is that we have a socialistic monetary system that is in the process of failing – we are witnessing what are probably its death throes. Carney will now head a central bank that has bought up almost one third of the government debt in issue, not surprisingly to no discernible positive effect. He will likely find out that this sinking ship will prove more difficult to steer than the one he is leaving.
Even Canada's finance minister Jim Flaherty stares in awe at the super-human bureaucrat who is now leaving his employ …
(Photo by Fred Chartrand / The Canadian Press)
Dear Readers! We are happy to report that we have reached our turn-of-the-year funding goal and want to extend a special thank you to all of you who have chipped in. We are very grateful for your support! As a general remark, according to usually well informed circles, exercising the donation button in between funding drives is definitely legal and highly appreciated as well.
Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke
4 Responses to “Mark Carney – Exalted Central Planner”
Most read in the last 20 days:
- Fresh Mainstream Nonsense on Gold Demand
They Will Never Get It... We and many others have made a valiant effort over the years to explain what actually moves the gold market (as examples see e.g. our article “Misconceptions About Gold”, or Robert Blumen's excellent essay “Misunderstanding Gold Demand”). Sometimes it is a bit frustrating when we realize it has probably all been for naught. Gold wants to know what it has done now... Photo credit: Ajay Verma / Reuters This was brought home to...
- Drowning the Fir
Presidential Duties Our editor recently stumbled upon an image in one of the more obscure corners of the intertubes which we felt we had to share with our readers. It provides us with a nice metaphor for the meaningfulness of government activity. First, here is a look at the picture – just quietly contemplate it for while and let it work its magic on you: Yes, these two gentlemen are actually watering a tree in the middle of a downpour... Photo via...
- Switzerland About to Vote on “Free Lunch” for Everyone
Will the Swiss Guarantee CHF 75,000 for Every Family? In early June the Swiss will be called upon to make a historic decision. Switzerland is the first country worldwide to put the idea of an Unconditional Basic Income to a vote and the outcome of this referendum will set a strong precedent and establish a landmark in the evolution of this debate. The Swiss Basic Income Initiative in a demonstration in front of parliament. As we have previously reported (see “Swiss...
- Gold – The Commitments of Traders
Commercial and Non-Commercial Market Participants The commitments of traders in gold futures are beginning to look a bit concerning these days – we will explain further below why this is so. Some readers may well be wondering why an explanation is even needed. Isn't it obvious? Superficially, it sure looks that way. As the following chart of the net position of commercial hedgers illustrates, their position is currently at quite an extended...
- Heretical Thoughts and Doing the Unthinkable
Heresy! NORMANDY, France – The Dow rose 222 points on Tuesday – or just over 1%. But we agree with hedge-fund manager Stanley Druckenmiller: This is not a good time to be a U.S. stock market bull. Legendary former hedge fund manager Stanley Druckenmiller at the Ira Sohn conference – not an optimist at present, to put it mildly. Photo credit: David A. Grogan / CNBC Speaking at an investment conference in New York last week, George Soros’ former partner...
- Staying Home on Election Day
Pretenses and Conceits The markets are eerily quiet… like an angry man with something on his mind and a shotgun in his hand. We will leave them to brood… and return to the spectacle of the U.S. presidential primaries. On display are all the pretenses, conceits, and absurdities of modern government. And now, the race narrows to the two most widely distrusted and loathed candidates. US election circus: Deep State Rep vs. Rage Channeller The first, a loose...
- How the Deep State’s Cronies Steal From You
Expanding in Ireland DUNMORE EAST, Ireland – We came down the coast from Dublin to check on our new office building. For this visit, we wanted to stay somewhere different than we normally do. So we chose a small hotel on the coast, called the Strand Inn. Irish landscape with alien landing pads. Even the guys from Rigel II have heard about Ireland's corporate tax rate. Photo credit: Tourism Ireland It is an excellent place for seafood and soda bread on a...
- The World's 100 Most Influential Hacks, Yahoos and Monkey Shiners
Hacks and Has-Beens NORMANDY, France – What has happened to TIME magazine? Henry Luce, who started TIME – the first weekly news magazine in the U.S. – would be appalled to see what it has become. Time cover featuring the sunburned mummy heading the globalist IMF bureaucracy (which inter alia advocates that governments should confiscate a portion of the wealth of their citizens overnight, even while its own employees don't have to pay a single cent in taxes). Once you...
- The Japanese Popsicle Affair
Policy-Induced Contrition in Japan As we keep saying, there really is no point in trying to make people richer by making them poorer – which is what Shinzo Abe and Haruhiko Kuroda have been trying to do for the past several years. Not surprisingly, they have so to speak only succeeded in achieving the second part of the equation: they have certainly managed to impoverish their fellow Japanese citizens. Shinzo Abe and Haruhiko Kuroda, professional yen assassins Photo credit:...
- Kuroda-San in the Mouth of Madness
Deluded Central Planners Zerohedge recently reported on an interview given by Lithuanian ECB council member Vitas Vasiliauskas, which demonstrates how utterly deluded the central planners in the so-called “capitalist” economies of the West have become. His statements are nothing short of bizarre (“we are magic guys!”) – although he is of course correct when he states that a central bank can never “run out of ammunition”. BoJ governor Haruhiko Kuroda Photo credit:...
- Revolution at the Ranch
Alarming News BALTIMORE, Maryland – An alarming email came on Tuesday from our ranch in Argentina: “Bad things going on… We thought we had the originarios problem settled. Not at all. They just invaded the ranch.” Originarios on the march... Photo credit: cta.org.ar To bring new readers fully into the picture, Northwest Argentina, where we have our ranch, has a revolution going on. Some of the indigenous people – that is, people with Native...
- The Long-Buried Secret of Napoleon Bonaparte
Family Secrets DUBLIN – The smart money is getting out while the gettin’ is still good. That’s the message we get from reading the recent headlines. Here’s the Financial Times: Redemptions from stock funds have hit nearly $90 billion this year as portfolio managers and hedge funds struggle to navigate a market that no longer seems driven by radical central bank policy. S&P 500 Index: causing navigational problems - click to...