The Fed carries on printing dollars

 

The recent minutes of the Fed’s Monetary Policy Committee show they think there is still insufficient recovery to justify any reduction in the amount of dollars they create each month. They plan to continue with  an extra $120bn a month and renew their discussions at their next meeting. Meanwhile the Bank of England has signalled an end to creating more pounds by the end of this year, and has throttled back the monthly amount in the meantime. The UK has received much less monetary stimulus than the USA relative to the size of the economy. UK inflation on the official numbers is at 2% and US inflation is at 5.4%.

In addition the US Congress and President are contemplating further large increases in public spending and the deficit whilst the UK Treasury is rightly letting recovery bring the deficit down as it will do without further government intervention to spend more.  This week’s foreign policy disaster by President Biden will not  be good for confidence and consumer sentiment in the short term in the USA and may give the Fed further excuse to seek to run the economy hot. There is a lack of clarity over just how far the Congress will go in crafting a big spending big deficit budget for next year, though with Bernie Sanders as Budget Committee Chairman there are plenty of pressures to spend on a huge scale.

The main Advanced countries and the EU have shown they can get away with substantial money printing and large deficits for a limited period of artificially depressed demand brought on by their choice of anti pandemic policy.  There is however no proof that they are all now like Japan and can enjoy zero inflation, huge budget deficits and endless money printing as the state buys back much of the debt it issues. Japanese society and its economy has a strong savings culture, an ageing population that is cautious and a long post 1990 crash  tradition of no inflation. The US economy is showing that it still has a lively turn of speed on prices when stimulus is applied. The Fed assures us the rises will be temporary. That would be a more certain outcome if the Fed recognised as the Bank of England has done that Quantitative Easing has to come to an end as the economy recovers. It seems quite a lot of the dollars end up wanting to invest in UK companies, with a rash of bids outstanding.

139 Comments

  1. Sakara Gold
    August 21, 2021

    As the party continues to slump in the polls, when the next election nears Sunak will not be able to resist the temptation to print yet more money for electoral bribes. He has aready printed more money than any Chancellor in history. Who knows where his monetary experiment will take us?

    History teaches us that hyperinflation is the inevitable end to all this.

    1. NickC
      August 21, 2021

      That’s right, Sakara, but you’d be hard pressed to convince the MMT adherents.

      1. acorn
        August 21, 2021

        NickC, you have demonstrated previously, along with nine out of ten commenters on this site; that you know nothing about fiat currency economics. With JR’s permission, have a short read of the following “What Does Money Velocity Tell Us about Low Inflation in the U.S.?” (Google “”), from the US FED.

        You will see on the above that the velocity of circulation (VoC) of the US “monetary base” (notes, coins and reserves), has dropped considerably. The same has happened in the UK, not to mention Japan. Households are hoarding the governments fiat money and not spending it. Hence, the VoC of the government’s money has dropped from circa 27.2 just before the crash of 2008 to circa 2.1 now. That is why inflation is much lower than the neoliberal monetarists say it should be. The latter still think we are on the Gold Standard and the VoC is always at a constant value.

  2. Mark B
    August 21, 2021

    Good morning.

    It is nice to see good old, ‘inflate your way out of debt’ is still the prefered method of those who could not run a whelk stall let along an economy.
    /sarc

    The ‘Nutter in Number 10’ still believes that 1970’s splashing (other people’s) cash is back in fashion like flared trousers and winged collared shirts, long hair and Donny Osmond. Well it seems like it with all the personal wealth destroying measures this government seems to be embarking. For Wilson’s, “White Heat of Technology” and ‘The Pound is the same value in your pocket” swindle, read “The Saudi Arabia of Wind(bags)” and the like. The problem with the USA is, we in the UK are very much linked as to what goes on there and, if they take a dive, we will be right behind them.

    There is also another thing on the horizon – The USA Mid-Term Elections in late 2022 in both the Senate and the House. If President Biden cannot get things moving his administration could well be toast as he could very well lose both Houses.

    Interesting times ahead.

    1. Roy Grainger
      August 21, 2021

      I believe, and John would know much better than me, that the Government have issued so many inflation-linked bonds that inflating away the debt is now far more difficult than it was in the good old days.

    2. Lifelogic
      August 21, 2021

      Biden certainly deserves to lose both Houses.

      1. DavidJ
        August 21, 2021

        +1

      2. Jim Whitehead
        August 21, 2021

        LL, +1

    3. NickC
      August 21, 2021

      Mark B, I think Boris’s theory is that the world will copy us if only we’re sufficiently woke and determinedly CAGW believers. Not just Boris of course but other appeasers/wokesters/climate zealots. Afghanistan, and hundreds of new coal-fired electricity generatio plants in Asia, say that Boris’s theory has failed.

      1. Everhopeful
        August 21, 2021

        Does the West (U.K. in particular) have to shoot itself in the foot with greencr*p to allow the “levelling up” ( aka catching up and overtaking) of later industrialised countries?
        Like we are allowed no benefit from our genius.

        1. glen cullen
          August 21, 2021

          There was in bygone time a widely used capitalist term ‘’competitive advantage’’
          I don’t see any advantage of the UK economy going green

          1. Everhopeful
            August 21, 2021

            Not a scintilla of advantage.
            Specially designed to put us at a disadvantage in fact.

      2. Jim Whitehead
        August 21, 2021

        NickC, +1, and I respect and endorse so many of your well reasoned comments on J. R.’s posts

  3. Sea_Warrior
    August 21, 2021

    The only good news for America this week is that the dreadful performance of the White House all but guarantees that Congress will flip at the end of next year – and then some fiscal sanity might be restored.
    Here, I’m a fierce critic of Johnson’s ‘government’ but Sunak appears to have imposed some discipline on No 10. We have no need for ‘stimulus’; we just need to be allowed to do stuff.
    P.S. I was in London on Wednesday. Threw some money at a railway operator, the Tube, a restaurant and a theatre. There were some inexplicable closures at Waterloo, which stopped me spending more.

  4. George Brooks.
    August 21, 2021

    Thank heaven we don’t have Starmer and his happy band in charge , otherwise we would be heading down the same track as the US and ramping up a huge unsustainable debt. The labour party has more than its fair share of Bernie Sanders wanting to engage in reckless spending.

    1. MiC
      August 21, 2021

      Where have you been for the last two years, George?

    2. Donna
      August 21, 2021

      The classic “the others would be worse” is no excuse for the pretendy-conservatives in Government.

      We voted Conservative. We appear to have a left-wing bunch of clowns who are little better than Corbyn and McDonnell.

      As a genuine conservative at the libertarian end of the spectrum, they will never get my vote again.

      1. DavidJ
        August 21, 2021

        +1

      2. Jim Whitehead
        August 21, 2021

        Donna, +1, although I didn’t trust Johnson sufficiently to give him my vote. I had given my personal cheques to the Party of Margaret Thatcher but not to the succeeding leaders of the Party. It has been my belief that it’s only sensible to cast votes for what you want, which meant Nigel Farage over the recent years leading up to Brexit. Socialist or woke parties will never get my vote, nor will the pretendy-conservatives.

      3. No Longer Anonymous
        August 21, 2021

        +1
        We have Corbyn on speed.

    3. X-Tory
      August 21, 2021

      NO. This ‘the other lot are worse’ argument is now dead. Boris has been so appallingly bad – on immigration, on the EU, on civil liberties, on promoting British industry, on crime, on defending British interests, on everything – that I now no longer care if Labour get in next time. They will not be any worse. Boris has betrayed Britain and the British people. I cannot vote for him again and nor should any self-respecting patriot.

      1. Jim Whitehead
        August 21, 2021

        X-Tory, +1

      2. No Longer Anonymous
        August 21, 2021

        For example.

        The shootings in Plymouth.

        A beat police officer would never have advised the licensing officer to give a gun to a steroid addict.

        The City of London Police were mocked by the Metropolitan Police for having an easy beat but the fact was that the City of London Police HAD a beat !!! THAT was why the boundary between chaos and tranquillity was so distinct.

  5. Everhopeful
    August 21, 2021

    US is now experiencing a slowdown. Or so I have read.
    Some thought that they were doing ok but actually it was probably a bit of an illusion. Rising prices were mistaken for rising output. ( What?). So the economy hasn’t been expanding as the pundits thought but just getting ever more pricey.
    Manufacturing is much weaker. House building is suffering and retail sales are slumping. Growth forecast is down too and confidence in government must be pretty poor ( Afghanistan) which can’t help.
    Would the U.K. or the US government really have expected a recovery if they had nuked their own countries?
    I doubt it.
    So why do they see rainbows and unicorns on the horizon after what they have done?
    Our wonderful world was not made of Lego! Smash and rebuild.
    It was far more precious than that!

    1. Nota#
      August 21, 2021

      @Everhopeful – it doesn’t quite play out that way. They didn’t press the pause button and stop because of Covid, as a result the peaks and troughs are not as extreme as in the UK.

      Some manufacturing has a problem, its the same problem as in the UK – lack of ‘chips’ Which shows up more in the US than the UK, which completely stopped.

      Strangely and as a contradiction to the UK ‘talking heads’ the average guy in the street in the US while regretting the surrender in Afghanistan is pleased that the US has shook of its major role as the Worlds Policeman. It was never reciprocated by other nations at any level. A bit of a left wing numpty at best Biden while trying to defend the indefensible stated there was nothing to stop other Nations carrying on in Afghanistan – that is true. The however, the UK in particular no longer has the capability or equipment and is no longer an independent nation in the respect it relies totally on the political will of other nations to protect UK interests. Weak uninterested UK Government

      1. Everhopeful
        August 21, 2021

        +1

  6. Richard1
    August 21, 2021

    The unfolding catastrophe of the Biden presidency is a threat to the West, to world peace and now to the global economy. the Fed QE and the massive deficit spending are all linked to it. Biden’s presidency has already done far more damage than trump did in 4 years.

    1. Nig l
      August 21, 2021

      Apart from the fact Trump started it at Doha accepting the Taliban at their word and promising them there would be no air strikes, setting frees masses of their prisoners etc not forgetting throwing the Kurds to the wolves etc in the Middle East.

      And then let’s go back to sainted Obama whose refusal to enforce his own red lines (where have I heard that re negotiations over Brexit/Ni) emboldened the Syrians and let Putin in.

      American foreign policy has been putrid for a decade or two. To blame Biden alone and absolve Trump etc is crass.

      1. No Longer Anonymous
        August 21, 2021

        Biden ditched all of Trump’s other policies. It is not the withdrawal but the manner of it.

    2. Mitchel
      August 21, 2021

      Everytime I see Sleepy Joe and Crazy Nancy together I get flashbacks to the Soviet gerontocrats on Lenin’s mausoleum and the awful old waxworks of their Chinese politburo equivalent-except the former have finer clothing and (multiple) facelifts!

      Is it just me?!

      1. Jim Whitehead
        August 21, 2021

        Mitchel, you’re not alone . . .

  7. mickc
    August 21, 2021

    They don’t invest in UK companies. They buy them, then asset strip them.

    1. Sea_Warrior
      August 21, 2021

      If you’re suggesting that the government should prevent the takeovers of Meggitt and Ultra then this ardent capitalist, with some skin in the private equity game, supports you 100%. The destruction of our manufacturing base must end.

      1. NickC
        August 21, 2021

        Well said, Sea Warrior.

      2. DavidJ
        August 21, 2021

        +1

    2. Nig l
      August 21, 2021

      Presumably you will refuse any increase in value of your pension if a take over increases its value, are happy that poor management can continue without threat and don’t want new investors to find/drive value with new/different strategies, are happy that as a quoted company it will continue to suffer the costs draconian reporting etc, and are driven by the short terms needs of shareholders, let’s ignore that fact that often hedge funds often invest for the longer term and I guess would ban British companies from improving and finding value in companies abroad so sell all out holdings, refuse the invisible earnings the U.K. enjoys.

      A typical left wing knee jerk simplistic response.

    3. MFD
      August 21, 2021

      We must stop that practice, we had a great Chip design and manufacturer, gone! And now a lot of manufacturers cannot finish their products as no chip sets are available.
      Time has arrived for Britain First and to hell with world trade freedom.
      All takeovers by foreign finance must be scrutinise by the treasury

      1. Sea_Warrior
        August 21, 2021

        HMT doesn’t seem to care about the Balance of Payments; it seems addicted to ‘growth’.

      2. MWB
        August 21, 2021

        Months ago, or maybe years, I highlighted the stupidity of allowing ARM to be sold to foreigners (Softbank). I believe it was Thatcher, or one of her cronies, who said that the ownership didn’t matter, as long as the jobs were in England. Rubbish.

    4. Enrico
      August 21, 2021

      Mickc+1.Why oh why do we as a country allow this? When Morrisons sell to these venture capitalists they will strip out all of their assets regardless of the promises they are making. This government should stop all sales to other countries.

      1. Pauline Baxter
        August 21, 2021

        Yes that is what I thought. Sir John has said in the past that E.U. had asset stripped U.K. Now his party seems happy to allow U.S. to do the same.

      2. forthurst
        August 21, 2021

        Not only that but they will not follow Morrison’s tradition of stocking domestic produce so major knock-on for British farmers. What will all the thieving banksters do when they’ve finished flogging off or asset-stripped all British companies? Where will the Tories get their cash from, after all no patriotic Englishman is going to support them after they’ve destroyed the economy with that and SavethePlanet mania?

    5. X-Tory
      August 21, 2021

      Quite right. As I’ve said before, this stupid, treacherous government doesn’t unferstand what *real* investment is. Real investment is when a foreign company comes here and opens a NEW factory, INCREASING our overall manufacturing output. This real investment is extremely welcome. But merely buying an existing factory or company is NOT ‘investment’, as it does not add to our economic or industrial output. It is asset stripping. It is economic rape. It does NOT benefit Britain or the British people. It is NOT welcome and should be banned.

  8. Mike Wilson
    August 21, 2021

    One cannot help wondering if all that has really happened is that the can has been kicked down the road. When, eventually, the money printing stops, I think the housing market will (at best) stagnate. At worst there will be a late 1980s/early 1990s type correction – with a very low number of transactions, falling prices, a loss of confidence and a recession.

    I didn’t realise the Bank of England was creating new money ‘monthly’. How is it doing this? Where is the money going? Is it still buying up UK government debt in the secondary market?

    The whole thing has a ‘house of cards’ feel about it now.

    1. Everhopeful
      August 21, 2021

      Apparently the banks are now buying up houses like they were going out of fashion.
      Have they always done this or is it a way of spending excess cash…sorry, pretend money.

      1. Dave Andrews
        August 21, 2021

        50,000 houses by Lloyds Bank planned. I thought banks were supplied with virtually free money so they could use it to support business with loans. Buying houses will increase demand and inflate prices, already too far above the reach of many people. They shouldn’t be allowed to do it.
        Time for the law that says housing can only be owned by UK natural persons (with legitimate exceptions eg council housing).

        1. Everhopeful
          August 21, 2021

          +1

        2. beresford
          August 21, 2021

          By 2030 you will own nothing and you will be happy. You will rent your house from a large corporation.

          1. glen cullen
            August 21, 2021

            Sounds like the 5th episode of Red Dwarf XII; titled “M-Corp”

      2. Dave Andrews
        August 21, 2021

        50,000 by Lloyds Bank planned. I thought the point about supplying banks with virtually free money was so that they could lend to business. Buying houses increases demand and pushes up prices, already beyond the reach of many people. It shouldn’t be allowed.
        Time for the law that says housing can only be owned by UK natural persons (barring legitimate exceptions eg council housing).

      3. MiC
        August 21, 2021

        Yes, Lloyds want it to be a pillar of their plan.

        The dispossession of the people by capitalists and by economic repression continues apace.

        1. Mitchel
          August 21, 2021

          Unrestricted capitalism and communism are two sides of the same coin-as Solzhenitsyn valiantly pointed out many decades ago.They are both materialist/endless growth based ideologies.Both result ultimately in a form of feudalism

          “Whig-bolshevist” is a very apt term you used to see used occasionally – but not for a long time-replaced by “progressive”.

        2. Peter2
          August 21, 2021

          MiC
          There is a growing demand by people for rental properties.
          Lloyd’s are fulfilling that demand
          With 300,000 new arrival a year this isn’t surprising.
          Presumably you are OK with Councils or Housing Associations renting properties to the same people.

        3. Everhopeful
          August 21, 2021

          +1

        4. NickC
          August 21, 2021

          So the dispossession of the people by a government running half the economy doesn’t count?

        5. MiC
          August 21, 2021

          Banks, operating like this as a cartel, will inflate one of their main assets, mortgages, in turn increasing their power, by pumping the property bubble ever further.

          If nothing else, it is simply manipulation.

          It is financial repression of the ordinary person.

          1. Peter2
            August 21, 2021

            You are avoiding answering the question MiC
            Are you completely against renting property to people wanting to have a home or are you just against this particular bank renting to people.

    2. NickC
      August 21, 2021

      Mike, I tend to agree with your comment. And your description of a “house of cards feel” about our economy is apposite. I descibe our economy as hollow – buying stuff from foreign countries does not make us “leaders” in anything. Government exhortations about “low carbon”, “levelling up”, “crackdowns”, etc, are just empty words with no rational and practical basis – and no concrete actuality. It is hard to do real things; harder still to get them right.

      1. Mike Wilson
        August 21, 2021

        @NickC

        And, to top it off, my young, adult sons have been getting into cryptocurrency lately. One of them has a mate who is in some (social media based) group, or other – it’s serious stuff in that they pay £150 a month to be a member. He has been feeding info to my son. Who has fed it to me. And a cryptocurrency I bought 6 months ago has recently doubled. My son’s mates are all convinced they have found THE way to make money. Some of them are up to 30k now – from initial investments of as little as a grand.

        As well as the ‘house of cards’ feel – it also feels a bit surreal.

  9. Lifelogic
    August 21, 2021

    Indeed as you say “with Bernie Sanders as Budget Committee Chairman there are plenty of pressures to spend on a huge scale.” It will be waste on the huge scale.

    So the question is how best to invest to at least preserve real value given these inflationary pressures while under a dire – tax, borrow and piss down the drain (& regulate to death) governments we have in the UK, EU and the USA. Plus the moronic expensive energy net zero agenda. Then we have the very serious threats from China to Hong Kong, Taiwan and the south Pacific, the appalling mess Biden has created in Afghanistan, problems in South Africa, Iran and so many other places.

    Plus banks in the UK paying under 0.4% on deposits while charging 40% on overdrafts – surely a rigged market?

    Any suggestions?

    1. Lifelogic
      August 21, 2021

      Lots of people making very good money from good having good government contacts, the fake green climate alarmist lunacy, crony capitalism and even blatant government corruption in many cases I suppose. Also from the endless stream of new (usually daft and pointless) government regulations.

      But not of this really appeals to me. The NHS is failing so appallingly perhaps some good opportunities in private medicine. GPs who actually see you that day or the next and surgeons who will perform operations when needed not many years later after waiting in pain (and perhaps dying first) perhaps?

      1. graham1946
        August 21, 2021

        GP’s are private operators and can see you today or tomorrow if they want. They don’t. Lots are working part time only. Our doctors for instance according to their schedules on their website average 16 hours per week dealing with patients. Surgeons doing operations when needed – you mean queue jumping if you can pay.

        1. Dave Andrews
          August 21, 2021

          GP services are stretched due to a lack of staff and increasing demand. Not much can be done about the aging population, but their workload of lifestyle diseases ought to be reduced.
          Not enough interest in young people to take up the profession – it’s a long way from thumbs on a key-pad.

        2. Lifelogic
          August 21, 2021

          @Graham

          You are not queue jumping when you pay you are joining another queue as the first one is useless. You are also reducing the queue in the first one and generating another industry to cope with the demand. Plus getting more money into healthcare so they can employ more doctors and surgeons in health care.

          “GP’s are private operators and can see you today or tomorrow if they want.” yes but they are only paid by the government (not patients) and they get paid if they see you or not so many choose not to. They only way the NHS have to reduce demand is to ration services they have you money already so patients are essentially a cost and a nuisance. They are often/usually treated as such by the dire NHS. Hence 5 million + and growing awaiting procedures. Many are urgent ones.

          1. SM
            August 21, 2021

            Exactly.

          2. graham1946
            August 21, 2021

            Jumping the queue – generating another industry to cope with demand.

            Well the fact is that there are only a set number of surgeons and most of them operate in the NHS and do private on the side, having trained in the NHS. The private side have few full time surgeons and no high dependency units and if you have an operation in the private hospital (I have had one) it is the same surgeon you saw in the NHS and if anything goes wrong and you need intensive care it relies on the NHS, so yes there is queue jumping. The private sector is only a very tiny fraction of the health care service and could never cope with the volume the NHS does. Even if paid for privately there are only the same numbers of staff trained and available. You could not suddenly produce thousands more from the back cupboard. We don’t train enough. The outcomes of course can be better in the same way that selective schools get better results by having the best students, as they select the most lucrative cases and won’t come and collect you if you are smashed up on the motorway. I agree about GP’s, but they are the private operators, however paid.

          3. lifelogic
            August 21, 2021

            @ Graham – No not a fixed number of doctors, nurses or surgeons at all. More money in healthcare will mean more will stay, more are recruited, more will train, they will get used more efficiently and fewer will go off to Australia, Canada, USA, New Zealand …

    2. MPC
      August 21, 2021

      Yes Asia Pacific. Biden and Sanders’ extensive welfare programs are designed to create a European style society with swathes of citizens dependent on state largesse. Lower economic growth will follow. I’ve invested in the USA for many years and it’s now time to review the balance of my global investments.

  10. John Miller
    August 21, 2021

    The Democrats are an unmitigated disaster. Nobody has a clue about anything. Inflation will now hit 1970 levels.

    1. Sea_Warrior
      August 21, 2021

      And Rahm Emanuel’s off to Tokyo as the American ambassador. I have yet to find any evidence that he can ………… speak Japanese!

  11. MiC
    August 21, 2021

    Seems to me like a rather convoluted way of saying that money-printing is OK, so long as only right-wing governments do it – yet again.

    1. NickC
      August 21, 2021

      You’re the one who wanted ever more drastic and lengthy lockdowns, Martin. Such inactivity has to paid for, you know.

      1. MiC
        August 21, 2021

        No, I wanted proper control at the start, but when the Government did nothing in that regard it left only shutdowns to have any effect at all.

        1. Philip P.
          August 21, 2021

          MiC – Johnson ordered the first lockdown on 23 March 2020, the same day as a federal lockdown was announced in Germany.

          Germany had zero excess mortality in 2020. We had about 9%.

          The duration and/or severity of lockdowns had little impact on public health outcomes, as has been shown over and over again in international comparisons. It’s sad that you still need to be told this.

  12. DOM
    August 21, 2021

    To truly understand what is happening with the global economy we must climb inside the minds of our political leaders. Yes, that’s an unpleasant and disturbing prospect to most decent human beings but we live in extraordinary times and to grasp the very essence of what we are now seeing it is important to see the world through the eyes of political leaders who have decided to usurp the very fundamentals of finance to maintain their grip on political power

    QE is a political weapon of economic warfare. Without QE the financial system would have collapsed sweeping away the political class that has infected our every waking moment. Yes, social chaos would have ensued but that would have been a small price to pay for the fascist horrors that are now being unleashed by those who have been building their power bases since the mid 1990’s.

    I have no doubt that the those in charge today are pure bred charlatans. The real heroes of our world are those who produce our daily bread. They are the ones we take for granted. Without the private sector we are condemned to poverty

    1. MiC
      August 21, 2021

      Yes, the financial system could perhaps have collapsed, destroying everyone’s pensions, savings, livelihoods and the running of the country.

      Marvellous.

      1. Dave Andrews
        August 21, 2021

        I think we are going to see all those things unfold in Kabul.

      2. Mitchel
        August 21, 2021

        Debts that cannot be repaid will not be repaid and are worthless-all western sovereign debt is subject to extend and pretend and is worthless.The only significant state in Europe that is solvent is Russia which is why they will come out on top when the financial system is re-set ,be it in an orderly or disorderly way

      3. NickC
        August 21, 2021

        Now who was it who said: “Seems to me like a rather convoluted way of saying that money-printing is OK, so long as only right-wing governments do it”, Martin? So maybe enlighten us with your financial and fiscal acumen – money printing is good (to avoid a financial system collapse); but bad if right wing governments (where they?) do it rather than the far left Biden administration. Make your mind up.

        1. MiC
          August 21, 2021

          I gave no view of my own but simply my understanding of John’s piece.

  13. Oldtimer
    August 21, 2021

    The US will face it’s day of reckoning when the US dollar collapses as a currency that is trusted by the rest of the world. The Fed printing more dollars to fund extravagant Presidential spending programmes will only hasten that day. Successive UK governments have been all too ready to tolerate, even facilitate, the foreign takeover (passed off as inward investment) of UK businesses to offset growing trade deficits. It leaves large sectors of the economy under foreign control including critical defence companies. I have a grandson who is doing a year’s work experience as part of his physics degree course. When checking out the high tech companies he was going to for interviews I was astonished by the proportion that were foreign owned. The political class here, as in the USA, has been all too ready to resort to the magic money tree to buy votes. The sooner a tighter grip on unconstrained spending is achieved the better off we shall all be.

  14. Alan Jutson
    August 21, 2021

    Some many Countries in the World in a bit of a shambles, with either internal fighting, financial, economic and or political, health management problems.

    Does anyone have a sensible policy. ?

    1. SM
      August 21, 2021

      I imagine there are a few rational and decent individuals in most countries’ administrations, Alan, but sadly too many of those who get into government or opposition, no matter their political stance, are narcissistic, publicity-hungry, aggressive, corrupt and fanatical (and that just the words that will permit this comment to be published!).

      I have just finished reading the autobiography of a well-known and assiduous S African Opposition Party Leader – her descriptions of the in-fighting and factionalism within her own Party was enough to make my stomach turn, and then I remembered many of the fights during my own backstage political life and thought: “but it all sounds so familiar!”.

      1. Alan Jutson
        August 21, 2021

        SM

        Yes seen it at local Council level as well, political point scoring for political point scoring sake.
        Many have absolutely nothing positive to say about the other Parties at all, even if some reasonable suggestions or idea’s are made, it just seems to be all going down hill, with the blame game being played out by many, especially at election time, where dodgy headline statistics are often used to good effect, and by good I mean its seems to work, sadly.
        We do not yet seem to have reached the hate levels between parties as seen abroad in some Countries, but its sometimes pretty toxic stuff, and certainly not an atmosphere for consensus or sensible progress with agreement..

  15. The PrangWizard of England
    August 21, 2021

    As I was reading the opening paragraph early this morning my thought quickly turned to the matter which I later discovered in Sir John’s final sentence of his article. It may be investment at a dispassionate level of thought but it is total acquisition by the US of UK businesses.

    This is not opposed by the government even though a recent Act has given it some more powers to intervene should it wish to do so. Such wish is not much in evidence however to protect our sovereignty and independence which it claims it wants to do and no public notice given to prove determination to change previous views that we are ‘open for business’ (translation – everything is for sale) – if we have it has clearly made no impression.

    I suspect that even in the case of the defence business where the power can and must be exercised the US has so much hold over the government that the Tories will concede, and compromise is after all considered a high virtue, and bizarrely a strength, by them. They have a lot of City spivs as friends too no doubt. To the rest of us compromise in such circumstances is surrender and further weakness.

    I would ask government to show some courage at last and reject the approaches. Tragically it has been its long-held policy and view that it is easier to sell our family silver to anyone and everyone from overseas to get our hands on their currency rather than build our manufacturing capability and sell goods abroad instead.

    I would ask shareholders to vote against the offers and demands. Institutional investors will probably have no similar capability or ability, being probably unattached to the UK in the main. They will of course claim they are required to act in the best interests of their investors, which naturally is always ‘sell to the highest bidder’, which of course gets some of them a nice big fee.

    1. Peter
      August 21, 2021

      PWoE,

      Flogging off the family silver is not a new policy. Much of the U.K. is already in foreign hands.

      Hence the nervousness in dealing with China.

      An American concern famously bought a big U.K. confectioner, having promised to keep plants open in the U.K. Once the deal was in the bag, production was moved abroad and the CEO refused to appear before politicians to explain the decision.

      1. The Prangwizard
        August 21, 2021

        I remember it well. If only we had more access to direct action to remedy betrayals. I’d go first for gutless political and government leaders who are clearly specially bred and positioned. Maybe then the next lot would learn something.

  16. Micky Taking
    August 21, 2021

    Why does the US need to keep printing dollars? It is well known they have been flying pallet loads worth billions to the Taliban, and any terrorist organisation they can keep quiet to suit their inept politics. So, the saving in stopping the plane loads of greenbacks should stay in America, or is the bribery still going on?

  17. agricola
    August 21, 2021

    The USA under the Biden presidency is a growing disaster on all fronts, he is not fit to run a bath.

    1. IanT
      August 21, 2021

      Unfortunately, so many were straining to get rid of Trump that Biden & Co were not really scrutinised as fully as they should have been. There were plenty of voices urging caution with regards Biden but they were drowned out by the anti-Trump brigade.

      Trump is many things but he’s not a complete fool and was able to pass the MoCA tests when pushed by the Democrats – tests which Biden himself has apparently refused to take. Given Biden’s recent (and increasingly rare) media appearances, you have to wonder if he actually could pass them?

      Is it really possible for someone of real quality to rise to the top of the US (or indeed the UK) political system these days? I have my doubts given the recent choices on offer. Trump vs Biden – Johnson vs Corbyn.

    2. Enrico
      August 21, 2021

      +1

    3. DavidJ
      August 21, 2021

      +1

  18. MiC
    August 21, 2021

    Yep – nationalisation is fine too, as long as that is also only done by right-wing governments.

    Anyone see a pattern emerging here?

    1. SM
      August 21, 2021

      No, nationalisation is not fine, under any circumstances by any government, regardless of their political inclination.

      1. MiC
        August 21, 2021

        You’d like a privatised army, intelligence, judicial system, police force, emergency services…???

        1. NickC
          August 21, 2021

          Martin, It is the basic function of a nation state to provide a strong, rational, fair, and equable legal system, and to enforce it, for everyone’s benefit (hence internal and external defence). Everything else can be provided by the public’s direct efforts. Government provision of education, medical care, food, etc, etc, is not necessary – even though a democratic government may legislate for minimum standards (eg schooling 5 – 18; potable water; etc).

          1. SM
            August 21, 2021

            +10

          2. MiC
            August 21, 2021

            So who inspects everything from the schools to the sewage works, to make sure that they are doing for what they are paid, and not breaking any rules, then?

            And if you outsource the inspectors, then who inspects them?

            Many people interested in money would rather get it for nothing rather than for working.

          3. Peter2
            August 21, 2021

            If there is competition then customers are effectively the inspectorsThey leavecand take their custom elsewhere.
            You assume everything has to be a state monopoly MiC
            Then you desperately need independent inspectors.

          4. MiC
            August 22, 2021

            We have perhaps millions living in fire death trap tower blocks.

            Our rivers are turning back to open sewers again.

            We gave away thirty seven billion for a tracing system which made no real difference.

            We have had Boeing planes falling out of the sky.

            The world can only run properly when people can be trusted.

            People solely after money cannot be trusted not to break rules and to cut corners when that will give them more of it.

            So important matters have to be organised so that bad conduct by its operators cannot reward them.

          5. Peter2
            August 22, 2021

            Those tower blocks were built by local councils.
            They were badly built badly maintained by the local councils.
            Many have had to be torn down within a few decades of being built.
            Councils posted their people into these towers unwillingly.
            No choice.
            Rivers are not open sewers you are being silly.

            As a socialist you blindly believe only the State can do things well.
            History here in the UK and around the globe shows you are wrong.

          6. MiC
            August 22, 2021

            Peter, as ever, your write irrelevant tripe.

          7. Peter2
            August 23, 2021

            And you revert to cheap insulting shots every time your comments are exposed as nonsense.

  19. formula57
    August 21, 2021

    Perhaps the Federal Reserve is a bigger threat to America’s well-being than the Taliban. It does seem likely, alas.

  20. Bryan Harris
    August 21, 2021

    With $trillions already being thrown at Democrat drains and friends- the US economy is going places never before imagined, from which it will be impossible to recover from.
    Even Biden’s magic money tree is almost bare, despite so much Co2 in the atmosphere that otherwise keeps our world green and blooming, despite the alleged over-heating of the planet.

    It’s a typical socialist trait to throw money at every possible problem, the more the better, it seems, but when has that produced real results? NEVER.
    When America defaults, then that will rebound around the world and drag us all under!

    What the Democrat DEEP STATE is doing is a deliberate action to ruin the US economy, and bring in the great RESET.

  21. acorn
    August 21, 2021

    QE (Quantitative Easing) is a nice little earner for Spiv City. It works like this. The Treasury creates and spends brand-new “units-of-account” called Pounds and deposits some in my Bank account as my state pension. It deposits the same amount in my bank’s account at the BoE, where it is called “a reserve”. My Bank’s Balance Sheet continues to balance. All electronic, no notes or coins this far.

    I spend my pension deposit buying a Treasury Bond a tradeable savings account that pays interest and matches mine and thousands of others the Treasury paid out; (caused by the voluntary and unnecessary “full funding” rule). The BoE then moves the “reserve” which is mirroring my deposit, from the Treasury “reserves” account to the Treasury “securities account.

    The BoE QE man then makes me an offer for my Bond which is more than I paid for it. I sell it back to him and he puts my original pension deposit that bought the Bond, plus a little bit, back into my bank account.

    No new money was “printed” at any point. The total number of units of account, Pounds, has not changed during the QE monetary round robin. I go and spend my new deposit to inflate corporate share prices. Which was/is the designed affect of QE. Simples!

  22. Roy Grainger
    August 21, 2021

    The small but merry band of bleeding heart liberals who post here have been strangely silent on the utter catastrophe that is the Biden presidency. They told us that the adults were in charge at last – what went wrong ? They don’t seem able to even summon up the stength to say “Ahhh …. but …. but …. but … Trump …. Trump ….” like Mrs May managed.

    1. Mark Thomas
      August 21, 2021

      “Orange Man Bad” has become a classic case of “be careful what you wish for.”

    2. No Longer Anonymous
      August 21, 2021

      It’s a horror story. Chance, the gardener, has become President of the USA. (The BBC is ignoring it.)

    3. MiC
      August 21, 2021

      Catastrophe?

      It hasn’t been on Biden’s watch, that over half a million Americans have died of covid19.

  23. Nig l
    August 21, 2021

    And in other news we read that despite being their paymasters we (our government) can’t get Doctors to provide a proper service, I guess politicians never have the problems of getting an appointment that we ordinary people have (animal farm) and teachers are going to trash our children’s tuition by going back to bubbies ignoring requests. So who does run the country?

    We read the Treasury won’t fund a digital improvement programme to bring us in to the 21st century and blue on blue attacks (raab) as other departments seek to defect criticism, just how many illegal Afghan people has the Home Office let in already.

    All clear signs of a lack of leadership from very top.

  24. Nota#
    August 21, 2021

    The threats to the UK come from the lack of interest by Government in the economy. The Chancellor my give the appearance of maintaining stability, but its looking like smoke and mirrors before the Big Tax rises.

    The Boris cabal is not concerned with the UK economy, they are making out that between them and the UN’s COP26 they can solve something. This religious zealotry is about crippling the UK economy and handing more advantages to out competitors. Every single proposal so far requires the UK to ramp up production in the Countries that are having none of this nonsense and rubbing their hands with glee at the respect of their extra earnings from the UK.

    You have to question why is this Government so preoccupied in taking the UK down!

  25. Nota#
    August 21, 2021

    Were are all the cuts in bureaucracy, cuts in red tape, the releasing of UK entrepreneurial spirit. When does the UK get back to some form of self sufficiency, to being self reliant. When does the UK get back to wealth creation.

    I guess it doesn’t, everyday more ineffective rubbish, bureaucracy and red tape and costs are piled on to the UK taxpayer. These are big unnecessary cost. The only reason any one can fathom is that it appeals to the ego and esteem of the man at the top to prove he can wreak a country in less time than it took to build.

    Build back to make the poor poorer, the pensioner poorer. Build back to remove quality education for all by levelling down. Build back to sell the UK’s strategic assets so it can no longer rely on being safe and secure – paying twice is building better!.

    We know what is being taken away by these religious zealots, other than knowing the UK’s Citizens future is being trashed – no other point to this religion can be seen.

    There is an old adage ‘just because you can doesn’t mean you should’ If Government ‘buts out’ gives the Country back to the people, the UK will thrive and create a bright effective future for all. Just because others daily want to trash the UK is that what we expect of our Government?

    I would say role on the election accept the way the UK System is corrupted endeavoring to choose the least worst wont move us forward – so I guess some sort of revolution is required

  26. Andy
    August 21, 2021

    I’m not quite sure why you all consider that Mr Biden doing what he said he’d do is a disaster. He has long opposed US military involvement in Afghanistan, he stood for election saying he’d withdraw by Sept 11, people voted for that pledge and he has done it. No American troops were harmed in the withdrawal. That sounds like a success to me.

    The anger now seems to be about the other citizens who are in the country. ‘What about the Americans or Britons who are there?’ Erm, if you’re bloody stupid enough to go to Afghanistan that’s on you. Why should my taxes be wasted rescuing people from a place you have to be a bit dumb to go to? If you don’t know that travelling to a war zone is a bit silly then, really, there isn’t much we can or should do to help.

    However, I do have much sympathy for the local Afghans who helped US and British forces. Obviously they and their families should all be granted refuge. And I am sure they would all have been had we had a morally upstanding government in Westminster. But we don’t. You can’t do the right thing by these foreigners when the whole point of this government is to say how bad foreigners are.

    What has actually upset the Tories is that the Americans didn’t involve them. The British disaster in Afghanistan is the exposure of our country as an international irrelevance. This appears to have shocked Tory Brexitists who may have even believed their Global Britain nonsense. Don’t worry you all have Paddleboard Dom – the hapless Foreign Secretary – to save the day. Does he lack the honour to resign? Does the PM lack the honour to sack him? A resounding yes to both.

    1. Peter2
      August 22, 2021

      Biden didn’t consult with the EU elite or their individual member nations
      The EU was ignored by Biden.

  27. Donna
    August 21, 2021

    In every respect, Senile Joe has been a disaster for the USA and the free* world. I’m sure a great many American voters are experiencing buyers remorse having been duped by the Democrat Grandees that their man would be an improvement on Trump.

    We all know what massive money-printing leads to …. inflation. And inflation hurts most those who are least able to cope because they are on low or fixed incomes.

    Sunak and the pretendy-conservative in No.10 are continuing to print because they know that inflating away the debt this country now has, thanks to the 2007/8 banking crisis which was never properly addressed and now their disgraceful Covid policies, is the only way we will EVER be able to repay it.

    And they are already admitting that those least able to cope and those on low or fixed incomes ….. pensioners …… are going to be hurt.

    As someone who voted Conservative for the first time in decades in order “to get Brexit done” I too have buyers remorse. I won’t be doing that again.

    *I use “free” advisedly, since there is nothing free about the disgraceful rescinding of our Civil Liberties for the last 18 months over a Low Consequence Infectious Disease with a mortality rate of around 0.2%)

    1. MiC
      August 21, 2021

      Its mortality rate is around 1.5%, similar to polio.

      1. No Longer Anonymous
        August 22, 2021

        1.5% of infected people ? Really ???

        I can tell you now. When we hear of people being ‘ping’d’ at work the very last thing anyone is thinking is “OMG. A***’s got Covid… she’s gonna die !!!!” Our thoughts usually go along the lines of “Oh. A***’s got a week off.”

        Not a single one of the thousands I know who have had Covid have died of it.

        1. glen cullen
          August 22, 2021

          Ain’t that the truth

    2. NotA#
      August 21, 2021

      @Donna. A lot of people who voted Conservative expecting to be released from tyranny of Socialism only to find we got an self centered ego that is so left wing they shame us all. It’s time we had our freedoms and Country back – we never voted ‘for the great reset’

  28. Original Richard
    August 21, 2021

    The Marxists in control see QE as another way to destroy capitalism and democracy by initiating hyperinflation/financial instability in order to make even more people dependent upon the state.

    This is in addition to causing social instability by importing tribes into the democratic West with extreme religious beliefs and 7th century ways of life and pursuing an economy destroying green agenda.

  29. bigneil - newer comp
    August 21, 2021

    Our govt has the solution to everything – import the world – bow and scrape to their demands, while making us pay for them. Change our culture to suit them so THEY are happy. Threaten us with arrest, court, fine or jail then a criminal record to finish us off if we complain. SORTED.

    1. The Prangwizard
      August 21, 2021

      I’ll support and second that. And is now clear we must organise if we are to protect our culture and beliefs.

  30. glen cullen
    August 21, 2021

    Slightly of topic
    Maybe the Fed was printing all that money to send to Afghanistan, apparently they’ve been paying the wages of all government employees, providing food aid to feed the whole nation and bunging the warlords not to fight…not a way to create a sustainable country.
    No wonder the people want to leave; they want to follow the money.
    Muslims fleeing a muslim country due to the oppressive nature of islam, seeking refuge in a non-muslim country but still wanting to practise the beliefs & culture of islam
    Etc ed

  31. X-Tory
    August 21, 2021

    Not today’s topic, but one very close to your heart (and mine too). The news today is that the government will invest in 300,000 air *monitors* for schools to detect levels of CO2 and thus identify areas suffering from poor ventilation. Also – related – in today’s news, the government will trial air *purifiers* in 30 schools, to reduce the spread of covid.

    These two news stories beg the following questions:
    (i) Where will the air monitors, and purifiers, be manufactured? The government is spending £25 million on the monitors (there is no indication how much will be spent on purifiers), and it would be disgraceful – indeed, TREASONOUS – if they were not made in the UK. Will you ask the minister and find out?
    (ii) Why are only 30 schools being fitted with air purifiers? Why not install these in ALL schools? Is there any probability that they will make the air worse? Of course not. So therefore they can only make it BETTER, and reduce infections. So why not install them everywhere – INSTEAD of the air monitors? It doesn’t really matter how much they reduce infections – even a small reduction is better than nothing.
    (iii) Why are these purifiers not being fitted in HOSPITALS? That’s where most of the nosocomial infections took place. That’s where the most vulnerable people are. That’s where they are needed most. Why is the government too stupid to understand this???

    1. The Prangwizard
      August 21, 2021

      Sir John should know where these items are being sourced since he’s been pushing for better ventilation for ages. Well Sir John, what is the snswer?

    2. glen cullen
      August 21, 2021

      £25 million virtue signalling – school children are not at covid risk, the elderly in care homes are !

  32. Nota#
    August 21, 2021

    Off Topic – the MsM is still deciding the Political Agenda for the UK. Every which way they are trying to foist the blame for the continual ineptitude of successive Governments and there own media agendas at Dominic Raabs door.

    Which ever way you wish to shake things out there was never anything he could have done about the situation on anything that has happened or is happening in Afghanistan. The UK no longer has the military capability, is no longer a strong voice in the World community and it is unable to carry an equal or proportionate share in any of the Worlds trouble spots. All Raab could have done is give MsM interviews.

    If the MsM and the opposition succeed in his expulsion, the rest of the what they call a Conservative Party will also tumble.

    The UK is a rudderless, lacking in leadership, because the emperor has no clothes and commands the tide to turn

  33. DOM
    August 21, 2021

    I am genuinely intrigued as to why the installation of Biden into the Whitehouse as triggered an avalanche of US takeovers of UK listed companies?

    Something is deeply suspect about the timing of his installation and the current frenzy of takeover activity. I read from Betaville that Babcock has also received an approach from the US.

    The two ‘events’ are without question connected and both involved Biden and this PM now ensconced in No.10. Someone’s given the nod to this sale of the 21st century

    I have never liked Johnson. Never trusted him. Always felt he was a politician willing to sell his soul for personal aggrandisement

    His election and the installation of Biden is has quite literally unleashed a takeover of our lives, our world and our companies

    1. MiC
      August 21, 2021

      The takeovers coincided with the end of the brexit transition period – coincidentally close to Biden’s taking the reins.

      The hedge funds and private equity perhaps anticipate lowering of worker protections, H&S etc. which generally seem to set them slavering.

      That’s entirely to do with the first – nothing at all with the second.

  34. glen cullen
    August 21, 2021

    INSIDE-EVs
    ‘’BMW has secured £26.2 million in funding from the UK government for a research project into developing a battery pack that can offer a similar driving range to ICEs.
    The funding will come through the Advanced Propulsion Centre’s Collaborative Research and Development program into green automotive technology, whose latest round of funding totals £91.7 million.’’

  35. Pauline Baxter
    August 21, 2021

    What I want to know please Sir John, is this:- If the U.S. is now intent on investing in U.K. companies, doesn’t that mean that we are now being ‘Asset Stripped’ by the U.S. just as we were previously asset stripped by the E.U.?
    Presumably investment into a company is a prelude to taking it over.
    Or have I got that wrong?

  36. No Longer Anonymous
    August 21, 2021

    I’m going to say something in defence of Dominic Raab.

    He has a family and a wife. He was at breaking point. In need of a holiday.

    He’s had a shit two years (as have all of us.) Why would a so-called ‘junior’ minister have sufficed for a Foreign minister of a ramshackle country who was up himself ?

    Did the Afghan foreign secretary really need to be told ???

  37. Original Richard
    August 21, 2021

    The fast collapse of the Afghan Government was because the US failed to provide Afghanistan with a legitimate state which represented their citizens.

    Improving the rights of women and girls from those of the 7th century was right but to go to full 21st century woke was a step too far.

    I am sure the Chinese in pursuit of Afghan’s vast lithium and other mineral deposits will not be making the same mistake and I doubt the Taliban will care about another Muslim tribe’s plight in China.

    So will our Government learn any lessons from this and work to represent us rather than implement policies on immigration and CO2 reduction designed to save the World and which will only send us back to the 7th century?

  38. bigneil - newer comp
    August 21, 2021

    Read that 600+ arrived today – does PP know what “Stopping them” actually means? – – ALWAYS cash for them in hotels – none for pensions – – still wondering why i’m glad i’m dying??

  39. Gareth Warren
    August 21, 2021

    I fear the end of QE will not be good, it is bad that the BoE joined in, but hopefully they can stick to their word and stop it by the end of the year.
    When I read “the death of money” detailing the Weimar republic hyperinflation (it was not done for Versailles debts since those were paid in special gold backed marks). The most remarkable thing was how inflation was 1000%+ a month, people starving to death in the streets and mobs going around in banditry – but they just carried on printing.

    I fear we will repeat the mistake and be oblivious to the effects, all I can hope is its the EURO or USD that makes the mistake rather than pound.

  40. Stred
    August 22, 2021

    https://archive.is/r2jg7

    This from the governors of central banks confirms that it is the central banks together with large investment firms and banks that are determining monetary policy and they will be implementing the Build Back Better/Reset for a zero carbon economy. As Mark Carney threatened, firms that do not comply will be denied credit and go bust. QE will finance the furlough of the pandemic and become a renamed dole for the millions who will lose their carbon dependent jobs. It’s all decided by Green bankers and the likes of Blackrock. They call it ‘going direct’. Wasn’t the Tory Chancellor Osborne given a job by them after he had headhunted the Carney greeny at a cost double the previous governor?
    Vote Tory, go Green, get poor and be happy.

  41. Diane
    August 22, 2021

    Bigneil – Up to 800 now being mentioned. A local Dover comment I’d see recently stated that there had been no crossings witnessed last week due to channel weather but that boats were appearing again yesterday Saturday. I sense & feel your anger & frustration ( btw best wishes 2U) The funding for all that we are witnessing, when people are permitted to witness that is, voyeurs deterred or not allowed on beaches / around docks to see for themselves what is happening, presumably is a bottomless pit and so one assumes it’s just borrowed money being lobbed at councils, hotels, corporates and all the other ‘players’ in this sorry & toothless fiasco. Hotels don’t come cheap, being commandeered around the country, it would seem almost daily from the reports we can muster. Meanwhile, elsewhere, barriers going up, walls being built, denial of passage statements being made.
    Hopefully Mr Raab will continue in his position to at least allow some degree of continuity. I personally don’t care about the lack of a phone call. He’s also one of the few who dares to say it like it is and to be assertive with the press, commenters and any others. Let him do his job.

  42. Diane
    August 22, 2021

    Bigneil – 600 arrivals Sat 21st with DM saying some reports mentioning up to 800. A local Dover comment I’d see recently stated that there had been no crossings witnessed last week due to channel weather but that boats were appearing again yesterday Saturday. I sense & feel your anger & frustration. The funding for all that we are witnessing, when people are permitted to witness that is, voyeurs not allowed on beaches / around docks to see for themselves what is happening, presumably is a bottomless pit and so one assumes it’s just borrowed money being lobbed at councils, hotels, corporates and all the other ‘players’ in this sorry & toothless fiasco. Hotels don’t come cheap, being commandeered around the country it would seem almost daily from the reports we can muster. Meanwhile, elsewhere, barriers going up, walls being built, denial of passage statements being made.
    Hopefully Mr Raab will continue in his position to at least allow some degree of continuity. I personally don’t care about the lack of what would have been an inconsequential phone call. He’s also one of the few who dares to be assertive with the press, commenters and any others. Let him do his job.

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