Friday, 24 January 2014
Carney Pricks Cameron's Bubble.
Things were looking good for Cameron and the bunch of conmen he calls a government this week. Their campaign to deny benefits to those out of work was magically translated into "falling unemployment figures", ignoring the cuts in benefits to those in work was magically translated into "rising living standards" and the re-inflated property bubble was translated into an "economic recovery." Meanwhile Iain Duncan Smith was trying to kid us that his vicious attack on the most vulnerable in our society was the modern equivalent of William Wilberforce's campaign against slavery while wittering on about the Tory party's "historic mission." The IMF obliged the Tories by claiming that Britain's growth this year would be the best in Europe, conveniently ignoring our ballooning national debt and the fact that most of this "growth" would be in the purely notional value of houses in London. The truth, studiously ignored by the media, was left to Mark Carney, the Governor of the Bank of England, who quietly backtracked on his promise to raise interest rates if unemployment falls below 7%. He knows perfectly well that the government has been massaging the unemployment figures and is not prepared to raise interest rates on the basis of pure fiction. Not wishing to underline this he claimed, instead, that his decision would be based on the strength of the "recovery", which, without putting too fine a point on it, was both weak and also largely fictional. The truth is that Mark Carney does not dare to raise interest rates since that would immediately deflate the property bubble and bring the non-existent nature of Osborne's "recovery" crashing to the ground. The Governor and the Chancellor are now locked into a game of denying reality and hoping against hope that somehow their fantasy views of the economy will magically come true. This is voodoo economics at its most outrageous and its most forlorn.