Daily Archives: February 23, 2013


Fashionable Economics

The ludicrous thing was that Britain had a AAA rating in the first place.

It is four years since I started pointing out the blindlingly obvious, that quantitive easing would cause inflation and devaluation. Four years ago this blog had far fewer readers than it does now, and I am quite proud of that piece, so do read it.

At the time it was a deeply unfashionable view – in part because it was New Labour doing it, so all the BBC and Guardianista media were backing quantitive easing. Even when I wrote this two years ago:

Inflation as measured by the retail price index remains stubbornly at 5.2%, despite all the obvious deflationary pressures on the economy and continuing weak consumer demand. Strangely, the attempts to explain this being offered by media pundits all miss out quantitive easing, or to use a more old-fashioned term, printing money.

It is deeply unfashionable to hold to the view that simply to create more money reduces the value of the money already in circulation in relation to the supply of available goods; but that is what all history tells us (the benchmark example being the rampant inflation after Spanish opening up of the New World greatly increased the amount of gold coinage in circulation). Common sense tells us that too. Otherwise we could simply solve many of our problems by printing another couple of trillion pounds.

A couple of years ago, I suggested “Enough quantitive easing and we can eventually get back to stagflation”. We are just about there. Why have none of the experts noticed?

nobody much agreed.

Fashion in economics is fascinating. Now every financial pundit on the BBC and Sky has noticed that quantitive easing causes devaluation and inflation. Suddenly they have remembered that if you create a lot of something, it decreases its unit value.

Hey, but the banks have the money that was created, and bank bonuses are back to normal. So all is fine.

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Bahrain Opposition Meeting at Frontline Club

Please, please, do watch the video that starts about three and a half minutes in. Absolutely horrifying yet hilarious brief account of British complicity in torture and repression in Bahrain over sixty years.

It finishes with today’s House of Commons Foreign Affairs Committee (FAC) announcing firmly that their current investigation into UK relations with Saudi Arabia and Bahrain will exclude human rights. The FAC has now published 36 papers of evidence it received in support of the government of Bahrain. It refused to publish any of the 19 papers received from the Bahraini opposition, on the grounds that the complaints of Bahraini government torture and repression might be “libellous” of the people commiting the torture.

I find that fact alone absolutely stunning. It genuinely almost makes me feel suicidal when I understand the extent to which we are losing the battle for human rights and some kind of ethical approach to government and society.

The video in question is poor quality because someone taped it from the screening shown at the meeting. I had asked for the original but was told they are updating it. On the meeting itself, the accounts from Bahrainis are fascinating. There were three Bahraini ex-MPs in the audience who had not only been expelled from parliament but stripped of their Bahraini nationality for supporting the majority of Bahrainis against the despot.

I was originally asked to chair, but while I was ill they had invited someone else, so I ended up making a short speech instead, The other speakers had much more knowledge of Bahrain and are a great deal more interesting.

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