Nov 09

There is a moment in the excellent initial episodes of the early “The Thick Of It” when it was actually funny when Tucker tells the minister when his expert disagrees with policy to get a different expert. Expertise is well not a singular or even right.

Take Monetary Policy. There are the absurd who think all problems can be solved by Central Banks buying Govt debt and hence creating money. This may have some use at creating temporary liquidity but as the surge in Asset prices has shown it further dampens what those of us would call the real economy that creates real wealth. The absurdity of all the GDP stoking shown in static tax revenues and per Capita GDP. You tell the man on the street this policy and his reaction will actually be nearer reality than Nobel Economists. No accident the so called Nobel Prize in Economics was created by the Swedish Central Bank in the same way that Obama and Kissinger won the Peace Prize created by arms manufacturer Nobel. Sweden loves irony.

As an aside the funniest part of many Modern Monetary Theorists like say Paul Krugman or Kruggers for short is that until he was argued into a pathetic position he did not acknowledge any role for banks in the economy other than as some black box conveyance. Missing that money can be created by issuing banks and Central Banks. For instance HSBC decide to lend me 10 grand where does that money come from? Some one types +10000 into a computer and then I buy drugs and behead people or at least that’s how it worked in Mexico.

There is a lot of expertise in looking at numbers not in the economy. Sadly those with the easy solution of buying Bonds are just digging a deeper hole. Money and Wealth creation are 2 different things.

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