Central banks head off a liquidity crisis

We live in amazing times. The graph of US money growth is pointing upwards at an unprecedented rate. The graph of the US budget deficit is almost vertical. The last three months has seen the issue of over $ 2 trillion of additional Treasury bills, short term loans for the US government. No wonder the financial markets are booming.

The Fed’s latest figures show annualised  money growth at 40% for the last three months, a record level.(M2, or the amount of money deposited in US financial institutions).  State debt has surged by $2.06 trillion between March and May.

Remembering last time when Central banks starved markets of cash and left the banking system and corporates to plunge into financial reconstruction or bankruptcy for want of liquidity, the Central Banks led by the Fed have this time done the opposite. So far so good – companies have borrowed money instead of going bust,and banks have plenty of cash to lend.

The problems this poses come later. There is first that it must be a bridge to recovery, not to insolvency. Delaying bankruptcies would not be much of a success if we end up entering a credit meltdown when too many companies fail to repay their money on time.

There is also the issue of inflation. So far we just have asset price inflation. If more of this money gets into the bank accounts of companies and people who want to spend it rather than invest it in financial assets, that could prove more generally inflationary. Then Central Banks have difficult choices to make. Putting up rates to throttle back credit is the usual response to cut demand and stop overheating. That in turn means triggering the delayed bankruptcies of the over borrowed companies.

The happy answer is for the Fed and Central Banks to gently throttle back now they have stopped a liquidity crunch. The commercial banks have a lot of work to do deciding realistic and sensible schedules for repayment of loans, and working with business on who has a sustainable business model worthy of support and who does not in these new and difficult times.

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  1. Nigl
    Posted June 12, 2020 at 5:25 am | Permalink

    But surely before that you have to get the economy working. How can a bank restructure on the basis of little ot no income and I see little evidence of a policy for that from HMG who still seem totally risk averse.

    Off topic but current, I note that it is claimed we are abandoning border controls with the EU. A major plank of Brexit and the first sell out? I am expecting more. I look forward to what Farage has to say because only he believes in what he says. Patel etc are just fob off merchants.

    • Peter Wood
      Posted June 12, 2020 at 6:53 am | Permalink

      First man: I’ve got a car to sell, I want £1,000- for it.

      Second man: I want to buy your car, but I’ve only got £900- , will you accept?

      First man, no, its worth easily £1,000- sorry.

      Second man goes to his central bank and ask for some money, central bank says sure, I’ve just created losts, here’s £10,000!

      Second man goes back to first man to buy the car. He offers £1,000- as the owner asked.

      First man: oh, so sorry, that was yesterday’s price, now that the central bank is giving money away, I want £20,000- for it.

      Second man goes back to his Central bank for more money……

    • bigneil(newercomp)
      Posted June 12, 2020 at 7:47 am | Permalink

      In plain English – treachery – which is what the original aim was to start with.

    • Fedupsoutherner
      Posted June 12, 2020 at 7:59 am | Permalink

      More illegal immigrants creeping in through the back door. That should get the economy moving.

    • Peter
      Posted June 12, 2020 at 8:08 am | Permalink

      Rishi has been very good at handing money out in vast quantities.

      We will see what happens when the party is over.

    • Oggy
      Posted June 12, 2020 at 10:20 am | Permalink

      Nigl – exactly.
      We keep hearing the Government say they will not extend the transition beyond 31st Dec to take back control of our borders, our laws and our money. So Boris is backtracking already, but why tell us today ? What other concessions is he about to give to the EU when he takes over negotiations on Monday.

      Is that a rat I can smell ?

      The Tories will be annihilated if they backtrack on a meaningful Brexit.

  2. oldtimer
    Posted June 12, 2020 at 5:43 am | Permalink

    In the early 1980s the US Fed pushed interest rates up to 14%+ in attempt to control inflation (that was driven by rapidly rising oil prices, up from cUSD 1 to 40 in just five years). That caused huge damage globally – one by product was the destruction of at least one quarter of UK manufacturing capacity as markets around the world collapsed. In the last financial crisis, as you point out, they put a huge squeeze on money supply. This time they are trying another shot in the locker – a flood of liquidity. Presumably some is deemed necessary to sustain international trade, dependant on dollar availability.

    Like the other “solutions” this one will probably fail over time too. The fundamental underlying problem is the growing disconnect between the supply of money and credit in the system and the value of goods and services produced. It is a perennial problem for fiat currencies. There will be no easy, painless adjustment to resolve the mismatch.

    • Caterpillar
      Posted June 12, 2020 at 7:45 am | Permalink


      W.r.t..your second paragraph – do you think the savings and cooperative banks in Germany provide this connection?

      • oldtimer
        Posted June 12, 2020 at 4:16 pm | Permalink

        Short answer is I don’t know. The point I was trying to make is that the amount of cash and credit, and its growth rate, has been far greater than GDP. Currently that gap has been growing and at an accelerating and unprecedented rate as a consequence of QE. Much of that debt will not be repaid by businesses and financial intermediaries because they dot not possess the means to do so – the so-called zombie companies. The consequences for many will be dire. It is obvious that any future business and financial model will need to be very different from the recent past if it is to any chance of success. I assume we will get initial clues of the government’s intentions when the Chancellor presents his first budget. My own view, FWIW, is that there will need to be wholesale reform of the tax code, tax rates and regulatory regimes for starters.

  3. Ian Wragg
    Posted June 12, 2020 at 5:45 am | Permalink

    Get rid of this stupid 2 metre rule and let the economy start to work again.
    We all know pubs and restaurants will open on July 4th but why the delay.
    It looks like you are deliberately trying to bankrupt the country.
    Get the kids back to school.
    You look weak and ineffective.

    • Roy Grainger
      Posted June 12, 2020 at 6:04 am | Permalink

      Starmer’s antics over schools, one week opposing reopening them, then the very next week when he got his way opposing having them closed shows this: whatever the government do they will not please the Labour Party, the Unions, the BLM rioters, the BBC, the MSM, SAGE, the Remainer elite, the Civil Service, or Twitter. They need to accept this and just get on and implement their own policies – they might find the majority of the public will support them

      • Sharon Jagger
        Posted June 12, 2020 at 6:50 am | Permalink

        Ian and Roy,

        I’m inclined to agree with both your points.

        It does look at times, does the government want economic recovery. And yes, whatever the government does, the labour and the long list of whiners will complain.

        Do the right thing by the country and the majority will be behind the government. It’s like the Brexit years, the whiners make the most noise!

      • Fred H
        Posted June 12, 2020 at 8:27 am | Permalink

        I no longer understand what the Government policies are – could Sir John help me, please? So far it feels like they are doing the opposite of what the electorate wanted.

    • Andy
      Posted June 12, 2020 at 6:15 am | Permalink

      They look weak and ineffective because they are weak and ineffective.

      • Anonymous
        Posted June 12, 2020 at 6:36 am | Permalink


      • NickC
        Posted June 12, 2020 at 7:34 am | Permalink

        Andy, They are weak and ineffective because they put political correctness first – like you do.

        • Martin in Cardiff
          Posted June 12, 2020 at 6:30 pm | Permalink

          Please define “political correctness”.

          • NickC
            Posted June 12, 2020 at 8:13 pm | Permalink

            Similar to “woke”; usually expressed by a range of people from snowflakes to the far left, including some Tory politicians; an attempt to curry favour with the currently fashionable minorities; an attempt to prevent free speech; an example of language control to control the debate; having the intention of dismantling our culture to be remodelled on cultural-marxist lines.

          • Glenn Vaughan
            Posted June 12, 2020 at 9:21 pm | Permalink

            If you require a definition then you’ve been asleep throughout this century.

          • Martin in Cardiff
            Posted June 13, 2020 at 7:19 am | Permalink

            OK, so you can’t.

            Which “rule” of “political correctness” are they “putting first”, then?

          • NickC
            Posted June 13, 2020 at 11:31 am | Permalink

            Martin, OK, so I just did. You’re pretending to be obtuse (I hope!). The goverment puts political correctness first so everything else (justice, the economy, etc) is secondary.

        • bill brown
          Posted June 14, 2020 at 1:48 pm | Permalink


          Kindly define cultural -marxism?

          thank you

      • Hope
        Posted June 12, 2020 at 12:00 pm | Permalink

        True the Tory govt is. Abusing our freedoms to impose its left wing agenda.

        It was interesting to read how Avon and Somerset police watched criminal acts where the superintendent in charge said people of Bristol should be proud when his force arrested three people in Frome from a house for breaking national house arrest scheme!

        JR, expalain to us why your govt allows this? Will all those who were arrested or fined now be let off following last weeks events? It is only fair in an equal society.

        Khan given an extra billion by the Tory govt for mismanaging his finances of London, has allowed Khan to create a left wing body to change our cultural heritage and to board up statues!

        • Original Chris
          Posted June 12, 2020 at 5:43 pm | Permalink

          Well said, Hope.

    • Nigl
      Posted June 12, 2020 at 6:28 am | Permalink

      I agree but the politics of risk? Dammed if you do and dammed if you don’t, opposition is easy, snipe from the sidelines from a position of no responsibility. Easy.

      I just think they are not giving us the ‘why’ Nor vision, therefore hope for the future allowing the negative to constantly take the news.

      Not helped by Patel obviously in trouble, Williamson looking weak allowing the unions to continue to control the agenda, negative messages on brexit and apparently no other good news stories to distract us.

      • NickC
        Posted June 12, 2020 at 7:31 am | Permalink

        Nig1, Priti Patel in trouble? Not from where I’m standing. She’s having to cope with the appalling degree of government virtue signalling led by Boris, whilst doing a difficult job. And her Home Office mandarins are looking to undermine her every step of the way.

      • Hope
        Posted June 12, 2020 at 12:06 pm | Permalink

        Johnson is not very good on conservative strategy, vision or values. If that is what you expected you voted for the wrong person.

        Two days ago he allowed his disfumctional personal life to set national policy to allow single parents to have a bubble of family to visit. That allows him to visit the children of his previous wife and mistress as well as continue to see his latest child from his current mistress! Normal traditional families shunned and prevented from seeing theirs!

        Again, different nannies and cleaners, irrespective of homes visited, allowed to visit a house, grandparents not. Do you think this was an accident?

        Papers were asking/stating before Chinese virus vote Johnson’s get Corbyn.

      • a-tracy
        Posted June 13, 2020 at 9:39 am | Permalink

        The way people piled onto P Patel this week was abominable- the left think everyone else is bullying, racist, antagonistic, they need to take a good look in the mirror.

    • a-tracy
      Posted June 12, 2020 at 7:43 am | Permalink

      Ian, not even the people making the signs know how long 2m is, some of the signs on tv news programs last night read [2m = 6ft] – no it doesn’t that’s 1.82m, [2m = 6ft 5.6″] and as everyone knows that extra 5.6″ makes all the difference between catching a cough or not.

      These shops thinking they can police 2m gaps are kidding themselves, where will people queue? most pavements aren’t so wide that people can queue either side along shop windows and people can walk 2m distance from the queues to the next shop. Now the weather is turning lets see how willing people are to stand in the rain for their shopping.

      • Martin in Cardiff
        Posted June 12, 2020 at 7:38 pm | Permalink

        The way to get rid of these awful measures is to get rid of the virus, as many countries have now done, and which are returning to normal.

        Yes, that takes work and organisation on the part of government.

        You should perhaps have voted for a different one.

        • a-tracy
          Posted June 13, 2020 at 9:34 am | Permalink

          I keep asking Martin, where did the new 36 cases in my region last week catch this virus from, let us make our own decisions of the risk.
          Did we import the new patients? Did the new patients meet with people who flew here or got off Ferries from Ireland, France etc.
          We’ve been under lockdown, strict distancing measures for eleven weeks, the incubation period is two weeks, who is still spreading it. WE MUST BE TOLD!
          Planes have been arriving in Manchester a couple per day PIA is this causing a spike in the North West, what occupations do people in the NorthWest have?

          We are being treated like fools now.

        • NickC
          Posted June 13, 2020 at 11:38 am | Permalink

          Martin, Other countries are recovering first because they got cv19 before us. No country has “got rid of the virus” – they benefit from herd immunity and the virus dying down as is typical of respiratory pathogens.

        • Narrow Shoulders
          Posted June 13, 2020 at 2:37 pm | Permalink

          Get rid of the virus! Nice one Marty.
          China who you extolled for controlling it has just started its second wave, this time in Beijing.

    • Caterpillar
      Posted June 12, 2020 at 8:19 am | Permalink

      Yes dump the 2 metre rule and open up. There is political risk with council and mayoral elections, there is risk to the vulnerable, but the Govt needs to live with this, the whole economy, country and millions of lives will go down the pan without normalising

      • Ian Wragg
        Posted June 12, 2020 at 3:46 pm | Permalink

        Life is one big risk.
        You do a rolling risk assessment every time you cross the road.
        It’s time Britain manned up.
        As for letting a few low life criminals dictate government policy I’m astounded.

      • Martin in Cardiff
        Posted June 12, 2020 at 7:34 pm | Permalink

        Why do you accept, in such a wet lettuce, apathetic manner, this fatalism that the choice is inescapably binary?

        That is, between wrecking millions of livelihoods or letting hundreds of thousands die?

        It absolutely is not, as a long, growing list of countries from Austria to New Zealand have proven.

        This country’s only chance – and far better late than never – is to join them.

        • a-tracy
          Posted June 13, 2020 at 9:37 am | Permalink

          In ELEVEN weeks we haven’t been able to eradicate it.
          Our NHS is still on its knees
          Our care home still can’t cope
          If it is people in hospital and care homes that people are still dying of this pandemic why is this not being identified and dealt with in a fully controlled, haz-suit total close down for a fortnight stop everything going in and out manner for a fortnight all their contacts locked down in specific hotels closed down for a fortnight.

        • NickC
          Posted June 13, 2020 at 11:43 am | Permalink

          Martin, We should have locked down the border when Trump locked down the USA’s. As most of the lower death rate countries did too. But you were dead against that. So you are partly to blame along with the rest of the panicky politically correct crowd.

        • Narrow Shoulders
          Posted June 13, 2020 at 2:39 pm | Permalink

          New Zealand is going to have a second wave as soon as they open up their borders again. The only way to live with this virus is for everyone to be exposed to it.

    • Stred
      Posted June 12, 2020 at 9:24 am | Permalink

      There is very lucid young professor on the morning tv who explained that the difference between the risk of catching the disease is about 1% and the 2m risk is about 2.5%. It also depends what the people are doing and shouting is a good way to increase risk, so out BLMs are not going to do the R a lot of good. It depends on the wind and which way you face and how much time is spent in the company of the inflected person. Also half of the inflected have no symptoms and, unlike flu, this virus is highly infectious during the asymptomatic period, so track and trace will not work in these cases.

      As the excess death rate is now back to average and many of the cases are in hospitals and homes, if the staff can be tested frequently and care taken to isolate them in hotels, surely it would be possible to reduce the distance to the WHO limit of 1 m inside pubs, restaurants and toilets.

      • Narrow Shoulders
        Posted June 13, 2020 at 2:43 pm | Permalink

        Apparently hospital admissions are increasing, which would tie in with the VE bank holiday. In two weeks we can expect those admissions to increase further after the protests last weekend and this.

        Although they tended to be younger so they may not need hospitals, it depends who they give it to and how long that takes.

  4. Adam
    Posted June 12, 2020 at 5:47 am | Permalink

    Companies borrowing money to survive instead of adding value to attract demand for what they sell adds to waste. Companies must create and deliver what future consumers will demand or have none. Repaying lenders depends on maintaining a custom of satisfying need.

    • Mike wilson
      Posted June 12, 2020 at 12:58 pm | Permalink

      Thank you for stating the bleedin’ obvious.

  5. Lifelogic
    Posted June 12, 2020 at 6:01 am | Permalink

    Amazing times indeed. So if the banks have plenty of money to lend (in the UK too) why are personal bank overdrafts from the large banks still at 40% this encourage by the FCA. Why will one large bank not lend (or even renew loan) on mixed commercial/residential property at any price. Why is buy to let lending so tied up in red tape and professional landlord restrictions? This when the banks are paying 0.1% or even 0.01% to depositors.

    Why did the BoE governor apparently encourage or at least allow this at the FCA? Is he economically illiterate too as Carney, Osborne and Hammond very clearly were? What damn fool would insist on the same overdraft rate for different risk borrowers it is totally anti-competitive and hugely damaging.

    • Nigl
      Posted June 12, 2020 at 8:08 am | Permalink

      You wouldn’t last long on that radio programme where you get buzzed for repetition. The monthly diary note must have come out!

      • Lifelogic
        Posted June 12, 2020 at 4:24 pm | Permalink

        Yes but it is so insane and economically damaging. It rather show us the foolishness of the FCA, the now Governor of the BoE and indeed Sunak. I know he is another Oxford PPE but surely even they can see this is moronic?

        Also they have still not made it easier for people to borrow from their own pension pots to help their business (as more enlightened countries have done). Why not it is a win win?

  6. Mark B
    Posted June 12, 2020 at 6:02 am | Permalink

    Good morning.

    Inflation. Followed by massive deflation. This is my biggest fear.

    The whole world economy is in a very precarious position. It has grown drunk of fiat money and the belief that the borrower will always lender back. But with business closing and people losing their jobs, and homes, what then ?

    All this and more and yet, this government is pursuing dangerous policies that will further destroy jobs and weaken, if not wreck, the economy.

    We also have to factor in he inevitable tax rises. This will strangulate growth. It will throttle investment and force entrepreneurs abroad.

    But don’t worry everyone. As people lose their business, jobs, homes, families etc our government will still be paying borrowed billions to pay for overseas aid. Because international bragging rights / virtue signalling trumps (not Donald) all !

    • NickC
      Posted June 12, 2020 at 7:23 am | Permalink

      Mark B, You are correct that this government puts virtue signalling (and being politically correct) above everything else. That is why the government borrows to pay for foreign aid; borrows to pay for HS2; and refuses to publish its own report into modern nation-wide sex slavery while indulging rioters’ obsession with a statue of a slave trader dead these 300 years. Ohhh look, there’s a squirrel . . . ohh, there’s another one.

    • Everhopeful
      Posted June 12, 2020 at 7:35 am | Permalink

      Is it “bragging rights “ though? Or one of those crazy, international agreements they have eagerly scribbled up to in their sweet little globalist way?
      Like they had no wriggle room to make proper decisions over the handling of this virus.

    • Fedupsoutherner
      Posted June 12, 2020 at 7:56 am | Permalink

      Agree Mark. Surely the time is right to end foreign aid at least until we are back on our feet and then to reduce it.

    • Hope
      Posted June 12, 2020 at 12:11 pm | Permalink


      Look at the March budget with all its borrowing before Sunak went mad on his borrowing for His furlough scheme. I have seen at least two ministers, the last Dowden, claiming how proud the govt is to keep overseas aid! Trevalyan boasting how much she gave away! Does the idiot realize it is borrowed money with interest that has to be paid back by the taxpayer? Govt ministers think that as long as they hit the target to give away money that is all that matters, not where the money co es from. Thatcher used to say socialists like giving away other people’s money. Tories look in the mirror! All left wingers and extreme left wingers rubbing their hands at Sunaks magic money tree!

  7. Alan Jutson
    Posted June 12, 2020 at 6:10 am | Permalink

    You have more faith in the Commercial Banks behaving sensibly than I do JR.

  8. Andy
    Posted June 12, 2020 at 6:13 am | Permalink


    2016: Take back control of our borders.

    2017: Our borders, our control.

    2018: We hold all the cards.

    2019: Erm, full control. Really.

    2020: UK abandons customs border plan

    Bravo Brexiteers, bravo.

    • Nigl
      Posted June 12, 2020 at 6:51 am | Permalink

      Yes unless Sir JR has clarification a major plank ‘sold out’

    • NickC
      Posted June 12, 2020 at 6:56 am | Permalink

      Andy, So what part of the UK deciding how it should handle imports – rather than the EU instructing us – isn’t taking back control from the EU? Do tell.

    • a-tracy
      Posted June 12, 2020 at 7:48 am | Permalink

      “The United Kingdom has abandoned its plan to introduce full border checks with the European Union on Jan. 1 as British ministers face pressure from businesses not to increase chaos already caused by the coronavirus outbreak, the Financial Times newspaper reported on.ft.com/37k1mxW.

      Instead, Britain will introduce a temporary “light-touch regime” at ports such as Dover for incoming EU goods, the newspaper reported, adding that this will happen whether or not there is a Brexit free trade agreement with the EU.

      The newspaper said that officials have conceded, however, that goods flowing to the EU from the UK could face full checks as they enter France”. Reuters

    • Richard1
      Posted June 12, 2020 at 7:48 am | Permalink

      Good show we should be going for unilateral free trade. Let the EU be the protectionist dinosaur.

      • Ian Wragg
        Posted June 12, 2020 at 3:49 pm | Permalink

        I think many exporters will go via Belgium ports. They don’t have the same reputation as Calais.
        They would be glad of the business.

    • formula57
      Posted June 12, 2020 at 7:52 am | Permalink

      2021: UK abandons relaxed customs border plan as planned six months on having introduced it as a temporary measure in the face of Covid-19.

      Bravo indeed for having the power to decide for ourselves and exercising it for our own benefit.

    • Roy Grainger
      Posted June 12, 2020 at 10:21 am | Permalink

      “Take back control of our borders” was nothing at all to do with customs, it was to implement a fair non-racist immigration policy which did not prioritise EU citizens over the rest of the world. I mean it should be crystal clear to you by now Andy that the young see UK as a satellite of the USA and they get all their culture and politics from there – because of that prioritising immigration from the EU, a region that they have absolutely no interest in or knowledge about, is backward looking and panders only to the liberal middle-class middle-aged like yourself – your day is done Andy, ever-closer union with the USA is what the youth want.

    • Original Chris
      Posted June 12, 2020 at 11:56 am | Permalink

      I believe it is not the fault of Brexiteers but of our weak left leaning globalist PM. He has duped many people, particularly his own Party Brexiteer MPs, in my view.

    • Glenn Vaughan
      Posted June 12, 2020 at 12:28 pm | Permalink


      I really do believe it’s time you and your fellow pupils returned to school.

      • Fred H
        Posted June 13, 2020 at 7:22 am | Permalink

        probably been on a very long exclusion?

  9. Kevin
    Posted June 12, 2020 at 6:16 am | Permalink

    Off-topic again, but with 1st July fast approaching, it is worth remembering that there are 203 days till the Conservatives’ gift to the EU of legislative power over the UK expires (Arts. 126 and 127 of the Withdrawal Agreement).

    Under Art. 129(6) of the Withdrawal Agreement, the UK is also obliged not to impede EU foreign policy.

    The Conservative Party ought to proudly remind the British people that it was with sovereign control of our foreign policy that our Royal Navy was put to use in blocking the slave trade.

    • Ginty
      Posted June 12, 2020 at 7:20 am | Permalink

      You’re missing the point.

      BLM are just useful idiots. This is a Communist revolution. It isn’t just the removal of statues but the limiting of debate ie we are not allowed to examine crime statistics because they are hidden and so when they tell us we’re racists etc ed. And now we are being told what we can and can’t watch and soon what we can read.

      Baden Powell’s statue is being removed ‘for its own safety’ but we know it won’t be back.

      Mob rule.

      This is what Boris has brought us with his 80 seat majority.

      Mass unemployment soon with no bread and no circuses. The country is a tinderbox with no effective policing as we’ve seen. We also have a government that only seems to respond to violence and intimidation.

      • Ginty
        Posted June 12, 2020 at 7:38 am | Permalink

        Tobias Ellwood says we are overdue a long conversation on our Imperial past.

        We are overdue a long conversation on true crime data – to see if we actually are being racist as accused.

        If we don’t then the only conclusion is that all statues will come down.

    • hefner
      Posted June 12, 2020 at 9:23 am | Permalink

      Thanks to the revolts in Saint-Domingue and Jamaica from 1748? to the first attempt to abolishing slavery in 1793 by the French revolutionaries? to Napoleon’s failed attempt in 1801 to maintain the 1793 French abolition? to the 1807 British Abolition of the Slave Trade Act or to the 1833 Slavery Abolition Act (for which the British Government paid £20m [£16bn of today’s money] to pay 46,000 British slave owners as a compensation for losing their ‘property’, which the UK taxpayer kept on paying (for this largesse to 19th century slave owners) till … 2015)?

      Yes, the present day UK tax payer till recently could certainly receive a pat on the back for dutifully paying their taxes and in the process having helped those ‘poor deprived slave owners’ in need. If you are a National Trust visitor, have you ever wondered how many of these nice houses are linked to this wonderful period?

      • NickC
        Posted June 13, 2020 at 11:47 am | Permalink

        Hefner, Shouldn’t you be more concerned with modern slavery – which is happening here, and now?

        • hefner
          Posted June 13, 2020 at 4:24 pm | Permalink

          Indeed, I am.

          Simply, the story of the benevolent Royal Navy abolishing the slave trade is a bit more complicated than the nice image that most of us were given in our school years: it took more than 60 years, and a lot of efforts to have other countries following Britain. As it was, the end of the US War of Secession might also have been an element in stopping the slave trade. Finally history (History?) shows that some RN captains also had interests in (via their family) or even were owners of plantations in the New World including ‘human properties’ as the slaves were known in those days.

          As so often things are simply not all white or all black. But I guess you must be an ardent supporter of some of these charities trying to fight against today’s slavery.

    • Ian Wragg
      Posted June 12, 2020 at 9:58 am | Permalink

      Keep your fingers crossed. Boris speaks to von Leyden on Monday lets hope Cummings is operating his levers.
      No backsliding at this point.
      The Tories are looking very vulnerable at present giving the country over to mob rule and denying the children an education, plus trying to bankrupt the hospitality sector.
      Nigel is on the loose again having been finished by LBC so he can and will make life very uncomfortable if Boris wavers.

    • Lynn Atkinson
      Posted June 12, 2020 at 10:28 am | Permalink

      Now they need to block Oxfam et al (demanding sex for food and not even using their own money).

  10. Anonymous
    Posted June 12, 2020 at 6:34 am | Permalink

    The worst government in history.

    An utter calamity for all to see.

    • Peter
      Posted June 12, 2020 at 3:47 pm | Permalink

      The worst government in history was that of Mrs. May.

      This one does not even get close.

      • Mark B
        Posted June 13, 2020 at 4:55 am | Permalink


        I agree with you. Much like Mrs.T had to deal with all the problems created by previous governments, so too will this one. Alas though, they cannot see that and are doubling down on a lot of that nonsense.

    • Glenn Vaughan
      Posted June 12, 2020 at 4:22 pm | Permalink

      Your “knowledge” of history requires urgent attention!

  11. Sakara Gold
    Posted June 12, 2020 at 6:48 am | Permalink

    Buy gold bullion, store and insure it in a vault in Zurich before the USA resembles Mugabe’s Zimbabwe with inflation at 100,000,000% pa

    • dixie
      Posted June 13, 2020 at 10:42 am | Permalink

      Can you eat gold?

  12. NickC
    Posted June 12, 2020 at 7:12 am | Permalink

    This seems to be a giant experiment in Zimbabwean MMT by the USA, the UK, and the EU. It would be less necessary for us if the government had locked down our borders as Trump did for the USA in February (which I endorsed, to howls of “xenophobe” from the usual culprits here); and if the NHS management had been any good at their job.

    Instead the government is obsessed with being politically correct, so falls foul of the law of first and second things. The government puts pc first, so perforce everything else becomes secondary. That includes the economy being an also ran.

  13. The PrangWizard
    Posted June 12, 2020 at 7:28 am | Permalink

    Another OT.

    Boarding up the Cenotaph, boarding up Churchill among others.

    Spineless government, meaning the PM, and Priti Patel and the Home Office, spineless police, where are they, more likely than not locked away in a safe place continuing to find ways of supporting and appeasing the revolutionary mobs BLM and XR and staying out of harms way themselves. The mobs are in charge now.

    What happened to the enforcement of law and the protection of lives and property?

    The majority of people are being sacrificed by the craven appeaser Boris and his green friends and partners.

    • Original Chris
      Posted June 12, 2020 at 5:59 pm | Permalink

      You are right, PW.

      It seems to me that the “police” have created a new role for themselves, that of enforcing social engineering policies that this government, and the Cons ones before it, are implementing e.g. the Marxist agenda of curtailing free speech using political correctness as the tool, social distancing with compliance circles and “instructional arrows”, restricting movement of people, keeping people locked down in their homes and so on. (Odd how it did not seem to apply to BLM and ANTIFA demonstrations and rioting).

    • Caterpillar
      Posted June 12, 2020 at 6:06 pm | Permalink


      I think you are correct, appeaser Boris is a different person. The Boris-of-olde would have been in front of an unboarded Churchill giving a history lesson.

    • steve
      Posted June 12, 2020 at 7:01 pm | Permalink

      Prang Wizard

      Much credibility to what you say.

      My own sentiment is that perhaps it’s time for us hard working and law abiding tax payers to down tools, refuse to prop the country up and stop paying for spineless politicians who appease racist mobs.

      • Lynn Atkinson
        Posted June 12, 2020 at 7:03 pm | Permalink

        Atlas Shrugged, the passion of Ayn Rand.

  14. Javelin
    Posted June 12, 2020 at 7:39 am | Permalink

    26% Fall in GDP in Mar and April. We still have May and June to go.

    The Sun …

    THE UK economy shrank by 20.4 per cent in April due to the coronavirus lockdown – the biggest monthly fall on record.

    The latest GDP figures come after the economy fell by 5.8 per cent in March.

    • Everhopeful
      Posted June 12, 2020 at 4:13 pm | Permalink

      I’d say we just can’t afford a “Second wave”!
      Or if we do, that’ll be finito.

  15. George Brooks.
    Posted June 12, 2020 at 7:42 am | Permalink

    Roy Grainger’s comment at 6 04am is so right and I would urge ministers being interviewed to cut their platitudinal and long-winded replies and give these journalists a short and direct answer. A first class example of how to answer was Sir Nick Carter’s reply when questioned that there were spare troops available to build the Nightingale hospitals but only 3000 were involved. ”I had the right number for the job, thank you”.

    The reverse was illustrated yesterday evening during the Downing St briefing when the BBC suggested that the first week of ‘test and trace’ had failed because a third of those tested positive during the week had not been contacted and the fact that of those being asked to isolate for 14 days, 85% had willing agreed, was totally ignored. We got a long disjointed and defensive reply instead a short rebuttal that this was week 1 of a nation wide system launched a week early being extremely well received by the population at large.

    Ministers must toughen up or they will sink and we will end up with the media running the country. God forbid.

    The PM is booked to have a ‘Zoom’ conference with the EU on Monday.

    There is absolutely no need whatsoever to give even a hint of a single concession or any extension to the transition period. I hope he is only attending because it was in transition programme and he is being polite.

    If he gives an inch that will be the end of his political career and this Tory government.

  16. a-tracy
    Posted June 12, 2020 at 7:51 am | Permalink

    Come on John you’ve let all the youngsters have a go at running things for a while, each one needs pairing up with an experienced previous minister that used to run their office of State for more than six months to assist.

    • a-tracy
      Posted June 13, 2020 at 9:25 am | Permalink

      This government is just fortunate that the other side are even less experienced and capable. The attacks on Patel this week just really show their MPs up in a terrible self-serving ‘it’s about me not you’ light. All of these women to me have attained top positions in this Country their colour or race wasn’t an issue in that at all or do they think deep down they only achieved it to tick boxes?

  17. Everhopeful
    Posted June 12, 2020 at 7:53 am | Permalink

    Aren’t the banks the cause of all our woes?
    Along with greedy, inept and disloyal govts.?
    How can we recover with all the regulations? ( Not to mention the new Covid ones).
    How would the famous manufacturers and stores have ever started up under present conditions? Would any govt WANTING recovery/ good economy act like this?
    Capitalism (inevitably) is a busted flush.
    We need to go back to gold…or pretty shells.

  18. Fedupsoutherner
    Posted June 12, 2020 at 7:54 am | Permalink

    On yesterday’s topic. I see the BBC proudly states it’s going inside Iran to film and show ‘their cultural history ‘. Oh, jolly good. At least they’ve still got some left unlike us if the minority get their way.

    • M Davis
      Posted June 12, 2020 at 6:13 pm | Permalink

      Talk about hypocrisy! That’s the Socialist BBC all over!

  19. formula57
    Posted June 12, 2020 at 7:55 am | Permalink

    “The happy answer is for the Fed and Central Banks to gently throttle back…” – but post-2008 shows they cannot.

    Confidence in central banks is ebbing as they are seen as prisoners of their own actions rather than masters.

  20. Andy
    Posted June 12, 2020 at 8:04 am | Permalink

    Happy half- anniversary of Boris Johnson’s election win! Here are his highlights:

    DECEMBER : Caribbean holiday

    JANUARY 31: Brexit Day and first UK Covid cases

    FEBRUARY: Yes to HS2 and Huawei. Save Priti Patel’s job. Holiday. First Covid death.

    MARCH: Ignore Covid for 3 weeks. Full lockdown. Catch Covid 19. 1000 now dead.

    APRIL: Intensive care. Sick leave. Have baby. 20% fall in GDP. 10,000 now dead.

    MAY: Save Dominic Cummings job. Care home scandal. 30,000 now dead.

    JUNE: Save Robert Jenrick’s job. Ignore race protests. Express pride in Covid response. 60,000 now dead.

    How do you all reckon he’s doing?

    • Edward2
      Posted June 12, 2020 at 3:50 pm | Permalink

      Why do you bother andy?
      You will never vote for him or the Conservatives.

    • Glenn Vaughan
      Posted June 12, 2020 at 4:20 pm | Permalink

      Would be far worse if you were in charge!

    • Richard1
      Posted June 12, 2020 at 4:47 pm | Permalink

      Happy to respond.

      His premiership has clearly been knocked off course by the Wuhan virus. (unlike any other country in the world where its hardly been noticed)

      HS2 and Huawei were bad decisions. happily it seems at least Huawei will be reversed

      Unlike you, I have every sympathy with his having been taken seriously ill, i dont begrudge him his sick leave (or his earlier holiday) and I congratulate him and his partner on the birth of their baby.

      According to the police Cummings did nothing wrong so his job did not need to be saved

      Jennrick did not break the law so no job to save there

      1/2 the 60k excess deaths are reckoned to be due to the lockdown. its clear our Wuhan virus deaths have been exaggerated versus other countries such as Spain Italy and Germany. We had lockdown because the left – including you – were screaming for it. We will look back on it as an error and on the modelling which caused it as discredited.

      You left out the Brexit negotiations. There he seems to be doing an excellent job, proposing a straightforward, comprehensive FTA with the EU (and others). Let’s see whether the EU have the sense to agree one or whether they prefer protectionism and a trade war.

    • steve
      Posted June 12, 2020 at 6:13 pm | Permalink

      “How do you all reckon he’s doing?”

      Better than you would.

  21. Mick
    Posted June 12, 2020 at 8:09 am | Permalink

    Off topic a little
    After watching the car crash interviews with labours Dodds and Ashworth over the last few weeks or so , all I can say is thank god that labour aren’t at the helm of this crisis, instead of giving there full support to the government all they are interested in is making political point scoring, hello Labour Party and your supporters this government is in power until the next general election in 2024 and hopefully for longer with labour reduced even more in numbers

  22. Caterpillar
    Posted June 12, 2020 at 8:12 am | Permalink

    I noted some weeks back that a 25% contraction (that isn’t reversed) in the UK economy , on some definitions, would push UK out of being a developed country. With the policy of collapsing the economy in March and April this has been achieved. Hopefully there will have been some recovery with a little loosening in May. Nonetheless, it is now urgently time to unlock everything and live with any consequences. The PM needs a quick cabinet shakeup, bin the ‘roadmap’, and (try) to save the country – now. Coronavirus second wave fears, BLM extremism, green economy etc. will all be luxuries. Putting the potential specific failures (care homes, nosocomial infection, stopping other treatments, time to intervention) to one side for later review and learning (the world heterogeneity of performance may well be random luck – it will take some unpicking) there has nevertheless been no clear costing of each life year saved, the effects of this irrational decision making are now starkly showing. Every day of delay is.impacting the future lives.of tens of millioms.

  23. John E
    Posted June 12, 2020 at 8:42 am | Permalink

    The commercial banks are being pressured to make loans backed by government guarantees that they know are very unlikely to be repaid. So their main focus when it all goes wrong is to avoid being made again the convenient scapegoats for government policy failures.
    They have been left with very little commercial independence to make their own decisions. They are captives of the state.

    • Lynn Atkinson
      Posted June 12, 2020 at 7:06 pm | Permalink

      We are all captives of The State.

  24. confused
    Posted June 12, 2020 at 8:56 am | Permalink

    Too much jargon John- I know what liquidity and inflation/ deflation is but have no idea about M2 money growth- also the first time I heard the term ‘melt up’

    You say “The happy answer is for the Fed and Central Banks to gently throttle back”- but I though the Fed was also a Central Bank- am a bit confused.

  25. ukretired123
    Posted June 12, 2020 at 9:14 am | Permalink

    The new essential workers are those that drive the economy and it is critical that Boris gets this message across before it is too late. We are sleep walking to nowhere fast with lots of sideshow diversions. We need to get folks back to work asap…..
    We are damned if we do and damned if we dont. Folks need clarity and the government needs the public’s support on this to make it work. The MSM need to be aware of their national role in helping the nation and not helping our competitors and those hostile to us starting with the BBC.

    We need to get a grip and praise the wealth creators and not those who only destroy things. We are fast running out of options and need to get real. The risks of life and death are a daily experience in the world over but folks here in the UK are getting paranoid beyond reason whipped up by MSM. Risk and risk taking occurs everywhere esp in time of war which we are waging too albeit invisibly.

    In its darkest hour Churchill led the way out of the fear syndrome and that was his legacy to the world! We shall not be defeated by cv19, anarchists and the virtue signalling MSM.

    • ukretired123
      Posted June 12, 2020 at 9:22 am | Permalink

      Hope not hate!

  26. Narrow Shoulders
    Posted June 12, 2020 at 10:14 am | Permalink

    Close to topic in that it is about printing money. If Scotland wants the furlough scheme extended then it must come out of Scottish funds or taxation. There must be no further transfer from the rest of the UK to fund their giveaways. They get more than us already

  27. William Long
    Posted June 12, 2020 at 10:26 am | Permalink

    Everything depends on how quickly production of goods recovers, and facilitating this must be the Government’s priority. Masses of money chasing a shortage of goods can only mean one thing: inflation.

  28. Polly
    Posted June 12, 2020 at 10:39 am | Permalink

    I thought you would be interested in the latest C-19 therapy hopes if you haven’t already seen them…………


    Although I am dismayed that it is now over four months since C-19 was recognized as a very serious issue…. and the UK has only got this far.

    If only doctors had been freed from restrictions by the NHS as previously discussed, successful alternative therapies would very likely by now be delivered to all C-19 patients in the UK, with other nations also benefiting.


    • SM
      Posted June 12, 2020 at 3:44 pm | Permalink

      I’ll be polite and say you have a naive and over-optimistic view of clinical trials, Polly.

      If any therapy is hastened through and causes even the slightest bit of trouble to a patient, The Guardian will be among the first to trumpet that a Conservative Government is happy to kill people.

      • Polly
        Posted June 12, 2020 at 9:32 pm | Permalink

        Thank you for pointing out that the UK’s problems are due to bowing to the Guardian.


      • Fred H
        Posted June 13, 2020 at 8:26 am | Permalink

        That the G reports less than 60 people are available to meet each initial trial informs us that any possibility of the drugs making a ha’porth of difference within a year is remote.

        • Polly
          Posted June 13, 2020 at 6:05 pm | Permalink

          Very sadly, many people are still dying of C-19 every day so everything should be done to find a successful therapy and some of those drugs being tested may well save lives right now.

          In any case, better late than never in case this horrible disease reappears next winter, and if so doctors will be ready and prepared to successfully treat it.

          Having a viable therapy also has an immediate effect of lockdown and consequent rapid economic recovery as I’m sure you appreciate.


  29. Sir Joe Soap
    Posted June 12, 2020 at 12:29 pm | Permalink

    Not really a worry if we let our whole society be boarded up like the Churchill statue.
    Stop COWERING, Conservatives. Whether May and the EU, or Johnson and the virus/BLM. STOP COWERING.
    Get people back to work.
    Get the police back to work.

    • Robert McDonald
      Posted June 12, 2020 at 4:40 pm | Permalink

      Lets just start with getting teachers back to work. Absolutely no justification behind their unions determination to inflate the purported dangers in opening schools up again. Teachers are supposed to be intelligent, and intelligence will find a way to deal with the issues, if applied. They pretend to be caring for our children’s future and all I see is their prevarication that is damaging a whole generation. Clearly they like paid holidays a lot.

  30. ian
    Posted June 12, 2020 at 2:47 pm | Permalink

    Just a few million plebs fell out of the back of the lorry as it went uphill.

    M2 money growth in the USA has been going down since the year 2000 and was still down in 2020 your figures must be for one year, the year 2000 is when this depression started.

    It might have some people on this blog thinking that it could be them to fall out of the lorry at the next crisis which could be soon.

  31. ChrisS
    Posted June 12, 2020 at 4:08 pm | Permalink

    It’s about time the Home Secretary and PM sent a letter to every Chief Constable stating very clearly that their job is to maintain law and order for the benefit of the majority of the population. They are not paid to appease mobs of whatever colour or political persuasion.

    It is an expression of utter failure for Dorset Police to tell weak and cowardly councillors like the hopeless crew running Poole, Bournemouth and Christchurch, that they had better hide their statue of Baden Powell in case a mob comes calling.
    It’s hardly surprising that they are so incompetent: The largest group is the Conservatives with 36 members yet the council is run by a mishmash of 39 councillors from the libDems, Labour and a mottley group of independents. Hardly democratic, is it ?

    Clearly Dorset Police need reminding that is their responsibility to maintain law and order and to protect property.

  32. David Brown
    Posted June 12, 2020 at 4:45 pm | Permalink

    My instincts is not to trust the US. The Americans will always push state debt into the long grass.
    I have even less trust on the big US Corporations not to stitch up a free trade to guaranteed profit for them no matter a future UK Gov wants to legislate for. We should avoid a free trade deal with the US and get one with the EU.
    I have far more trust in the EU than I do in any thing the US does.
    As for special relationship and oldest ally, I question this, we need to keep the US at arms length and preferably have nothing to do with the country.

    • Lynn Atkinson
      Posted June 12, 2020 at 7:09 pm | Permalink

      You are in a very small minority.

      • David Brown
        Posted June 13, 2020 at 5:06 pm | Permalink

        Minority mm growing by the hour and by the day.
        Independent Scotland can join the EU
        The Union Flag can be confined to history without Scotland.
        A growing number of young Americans don’t even know where Britain is and don’t care.
        The US elections will be very interesting for the future direction of the US and if Democrats win a close alliance with the EU, not whats going to be left of the UK

    • Will in Hampshire
      Posted June 12, 2020 at 10:06 pm | Permalink

      Agreed, I think you’re absolutely right. The Americans can’t be trusted.

  33. acorn
    Posted June 12, 2020 at 4:49 pm | Permalink

    JR, you appear more concerned about the state of the US Banking sector than the UK Household sector? The UK non-government Household sector has stopped spending. It is saving and paying down debt like crazy. It has lost confidence in the UK economy. https://www.bankofengland.co.uk/statistics/money-and-credit/2020/april-2020

    The Treasury is going to have to spend a lot more than the £90 billion new money it spent last month into the economy, to replace the lack of Household spending and its desire to pay down debt and save; and, pay for the imports and a probable No-Deal Brexit next January as well.

    • a-tracy
      Posted June 13, 2020 at 9:00 am | Permalink

      Why does the Treasury have to ‘pay for imports’?

  34. Lindsay McDougall
    Posted June 12, 2020 at 4:53 pm | Permalink

    “There is also the issue of inflation. So far we just have asset price inflation.”

    I very much dislike that word ‘just’ because asset price inflation is the means by which the ultra-rich have robbed the middle classes ever since 2001. The Bank of England’s chosen method of QE has effectively handed the richest 5% of the population a bung of circa £200,000 per head while the rest of us will have to pay off the increased State debt.

  35. M Brandreth- Jones
    Posted June 12, 2020 at 5:04 pm | Permalink

    All depends on selling goods and competition in utilities though??? Surely money wouldn’t be borrowed lightly when there is a chance to make good and turn things around and banks would not lend when there is nothing to compensate them in foresight of bankruptcy?

  36. Mark
    Posted June 12, 2020 at 6:35 pm | Permalink

    The latest coronavirus case map for England:


    Case numbers seem to be falling back almost everywhere. This provides an uncluttered background to see if recent riots and demonstrations lead to a rise in cases.

    This map shows the change in cases per million for the latest week over the previous one:


    Apart from some new clusters in Kent, the most obvious feature is sharp falls in many areas, presumably where cases had not been spreading in the general population, but had instead spread quickly through a care home.

  37. Matters
    Posted June 12, 2020 at 8:31 pm | Permalink

    I can sense a feeling of panic creeping in here John and I hope it’s got noting to do with us but only the USA and Fed..

  38. Sean
    Posted June 12, 2020 at 9:54 pm | Permalink

    glad i’m living here on west coast of ireland where i have a few acres and i grow some fresh for myself and for the market -I have a small boat where i do a little sea fishing and at age 75 feel i have no need for the EU or anyone else- think I have it the best

  39. BillW
    Posted June 12, 2020 at 11:04 pm | Permalink

    On another note listening to Mark Francois tonight talking about another FTA with the EU- have to say I am shocked..we voted to leave..we didn’t vote to rejoin in some other way- Out means Out

  40. matt
    Posted June 13, 2020 at 12:26 am | Permalink

    Hey John.. don’t know about this Fed stuff?- but if you consider we are our own rulers- we are ‘Earthlings’ alone in this world- also very much alone in the Universe and if there is nobody else outside of ourselves making decisions for us- and speaking for myself- I don’t believe in fairies or the God stuff either – so then it can also be said it all depends on how we as Earthlings want to order things for ourselves for the future.. We could go back to bartering if we like- for sure- or we could create a new world order- one with a kind of ‘one world currency’- just to put a stop to all of this drama each time about the Fed and Central banks inflation recession etc etc as if ‘they’ acting on our behalf like some kind of high priests or Kings etc? anyway Happy Bloomsday 16th June to everyone over there from matt Dublin

  41. wqayitgoes
    Posted June 13, 2020 at 4:07 am | Permalink

    No point in talking- just hope the EU kicks yer ass- which i expect they will do- Barnier

    ‘taking back control ‘- stupid thinking – as if it matters in this modern world

    we can never recreate the past- empire and all of that is gone

    we have to get over this idea that we are superior to others- especially eu types

    • Edward2
      Posted June 13, 2020 at 6:45 am | Permalink

      You remainers are always going on about returning to the Empire days and being superior.
      It’s a nonsense.
      We are just looking forward to being an independent sovereign nation once more.
      Like the 160 other nations on the planet that are not part of the EU.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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