Who Owns the Bank of England?

dowie said:
By what mechanism do they control the BoE? It's governed by a Governor, Deputy Governor and board of directors, all of whom are appointed by the Crown/PM.
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It's by having leverage over the politicians in terms of the consequences on the economy, e.g. for a troubled big bank, you can't allow us to go bankrupt even though technically we are, i.e. too big to fail, or you can't decide to do X (something that doesn't suit us) or we will cause X crisis and you'll lose the next election, stuff like that. They may not seem to be in charge, but de facto they are. The whole 2008 bail-out is a good example of this. Personally, I would have let them all fail and start again, it would have been much better for the general public.

The other thing is politicians, public institutions and big auditing firms getting captured by the banks, via financial interest. E.g. if you are an audit firm, you may not reveal all the bad things you know about something, because you won't get the audit job next year. This is similar to how the credit rating agencies like Moodys were captured in 2008. I am just illustrating the way power really works, and mostly it comes down to financial interest and people looking after themselves, with a profit motive.
 
Murphy said:
Well unless you wanted a rerun of 1930 America it was.
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No, the point about QE is that it should never have been necessary in the first place. QE was necessary to apply a sticking plaster to abuse of the system. If you had a financial system that had a tie-back to reality, e.g. a gold standard, then things wouldn't be able to get so bad that a fudge like QE is required and presented as the only way to save the (rotten) system.
 
Pawnless Endgame said:
I only recently found out that the Earth is round.
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Space is fake, the earth is flat


His game of thrones rant is great
White walkers can't go under water, but they went under water to tie chains around a dragon :cry:

I don't remember anyone ever noticing that and pointing it out
 
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For some lols on the gold standard :

"A brief history of the U.S. gold standard is enough to show that when such a simple rule is adopted, inflation can be avoided, but strict adherence to that rule can create economic instability, if not political unrest."
Yeah lets swap inflation for economic instability and/or political unrest.

"Gold bugs still cling to a past when gold ruled, but gold's past also includes a fall that must be understood to properly assess its future."

"With World War I, political alliances changed, international indebtedness increased, and government finances deteriorated. While the gold standard was not suspended, it was in limbo during the war, demonstrating its inability to hold through both good and bad times. This created a lack of confidence in the gold standard that only exacerbated economic difficulties."
Oh

"At the same time, a desire to return to the idyllic years of the gold standard remained strong among nations. As the gold supply continued to fall behind the growth of the global economy"
oh dear, can we just magic some more gold please

"Then, in 1934, the U.S. government revalued gold from $20.67 per ounce to $35 per ounce, raising the amount of paper money it took to buy one ounce to help improve its economy."
Hang on i thought we want stability!

"A return to the gold standard would limit the Federal Reserve's ability to print money and constrain its ability to enact monetary policy during critical economic events, such as recessions. Economists have also posited that a return to the gold standard would result in an economy that is more more volatile, due to vulnerability to shocks in supply and demand for gold. Central bankers and economists are largely unanimous against the idea of returning to a gold standard."
Phew, the adults seem to agree, oh apart from:
"Most notably, Judy Shelton, an economic advisor to former President Donald Trump, is known for her support for a return to the gold standard. (In 2019, Trump nominated Shelton to the Fed, but she ultimately did not retain enough support.)"
No surprise there!

www.investopedia.com

What Is the Gold Standard? Advantages, Alternatives, and History

Learn more about the gold standard, including its complicated global history and its connection to the fiat system and the U.S. dollar today.
www.investopedia.com www.investopedia.com
 
That's great and all but the arcane chicanery that is fractional reserve banking feels rather a lot like an elder god that requires constant feeding for which there is a hard limit that always seems to fall on taxpayers.
 
StriderX said:
chicanery
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StriderX said:
That's great and all but the arcane chicanery that is fractional reserve banking feels rather a lot like an elder god that requires constant feeding for which there is a hard limit that always seems to fall on taxpayers.
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Yes, absolutely. No standard on money means bankers getting away with more at the expense of the poorest in society.
 
I'm not an economist but hasn't wealth always worked this way?

Whether under the gold standard, or fractional reserve, the rich have always gotten richer at the expense of the poor. Having money means it's easier to get more of it, it doesn't matter if you try and restrict the supply or not, this same sort of rule will hold true.

Do you have any proof that gold standard currency also meant that people were, on the whole, better off?
 
Mercenary Keyboard Warrior said:
"A return to the gold standard would limit the Federal Reserve's ability to print money and constrain its ability to enact monetary policy during critical economic events, such as recessions. Economists have also posited that a return to the gold standard would result in an economy that is more more volatile, due to vulnerability to shocks in supply and demand for gold. Central bankers and economists are largely unanimous against the idea of returning to a gold standard."
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Recessions are exacerbated by the lack of a fundamental gold standard on money. Without the standard, banks are able to loan out greater multiples of their reserves, which means things turn worse if there is an economic downturn. The business cycle of boom and bust is amplified without a gold standard.

Of course central bankers are largely unanimous against the idea of returning to a gold standard, as it restricts their ability to game the system, restricts their loan multiples and affects their profitability. The article seems biased as there are a lot of economists in favour of a gold standard. Many economists are on the payroll of banks though, and this means they are instrinsically biased and against any standards the banks are against.
 
radderfire said:
It's by having leverage over the politicians in terms of the consequences on the economy, e.g. for a troubled big bank, you can't allow us to go bankrupt even though technically we are, i.e. too big to fail, or you can't decide to do X (something that doesn't suit us) or we will cause X crisis and you'll lose the next election, stuff like that. They may not seem to be in charge, but de facto they are.
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What dose that have to do with the Bank of England - you're talking about politicians now!
 
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