Over the weekend the Bank of England found itself being left behind by events. Perhaps it took the concept of the late summer Bank Holiday too seriously as whilst Governor Andrew Bailey was present at Jackson Hole and presumably enjoyed the hospitality he said nothing of note and thus did not respond to this.
The other path is one of determination. On this path, monetary policy responds more forcefully to the current bout of inflation, even at the risk of lower growth and higher unemployment. This is the “robust control” approach to monetary policy that minimises the risks of very bad economic outcomes in the future.
Three broad observations speak in favour of central banks choosing the latter path: the uncertainty about the persistence of inflation, the threats to central bank credibility and the potential costs of acting too late.
In many ways this was an extraordinary speech from Isabel Schnabel of the ECB who spent quite some time dismissing the inflation surge as we note “Transitory” has morphed into “uncertainty” about the “persistence” of inflation. However we have 3 markers for the Bank of England from it. Then there was more.
Policymakers should also not pause at the first sign of a potential turn in inflationary pressures, such as an easing of supply chain disruptions. Rather, they need to signal their strong determination to bring inflation back to target quickly.
Then she suggested a policy response.
Both the likelihood and the cost of current high inflation becoming entrenched in expectations are uncomfortably high. In this environment, central banks need to act forcefully.
Now let me switch to what all this means and I will do so from the perspective of Frederik Ducrozet because he is about as much an ECB insider as you can be whilst working elsewhere.
@Isabel_Schnabel‘s speech in Jackson Hole is as powerful as Powell’s, only more documented. A strong case for determination over caution, for the ECB to act forcefully as high inflation risks becoming entrenched. It’s possible that she calls for a 75bp hike in September.
The takeaway from this is simply that the ECB is now expected to raise interest-rates by 0.75% next time around. A response to this was the German two-year yield rising over 1% yesterday.
If we switch now to the Bank of England it was caught asleep by the development and is left in a world where it thinks a 0.5% increase in interest-rates is a big deal or bazooka. I have previously called it a “peashooter” and with the US Fed having raised by 0.75% and the Bank of Canada by 1% and now the ECB is floating the idea of it raising by 0.75% it looks even more so.
Consequences
The UK Pound £
Regular readers will be aware that I have long argued that we should set policy to support the UK Pound as it is anti-inflationary. Actually that has taken a further nuance this year because with the US Dollar being so strong it has been a type of competition between central banks as to how they respond to this. As an example this is why I argued some time ago that the Bank of Canada would copy US interest-rate moves which they have tried to do in spite of their meetings being before the US.
Thus over the weekend the Bank of England was caught out by the hawkish shift meaning we fell below US $1.17 versus the US Dollar. We also moved through 0.85 versus the Euro. So in the new era where a facet of monetary policy is via your exchange rate they were caught napping.
UK Bond Yields
This is another area where the moves at the moment are usually international. In response to the central banking rhetoric which was reinforced at Jackson Hole we see higher bond yields. So we have a two-year yield of 2.94% now as markets look to price in the rhetoric. It has also got Reuters excited.
LONDON, Aug 30 (Reuters) – British government bonds are on course for their biggest monthly fall since 1994, as surging energy prices create a perfect storm of higher inflation, tighter monetary policy and the prospect of greater government borrowing.
What this makes me think of is this from the last Bank of England set of policy minutes.
In the minutes of its meeting ending on 3 August 2022, the MPC said that it was provisionally minded to commence gilt sales shortly after its September policy meeting, subject to economic and market conditions being judged appropriate and subject to a confirmatory vote at that meeting. The Committee asked the Bank to be in a position to begin a sales programme before the end of September.
Selling into a declining market is really rather silly as they will exacerbate the fall. I have argued for many years that their plans for unwinding all their QE bond purchases were none too bright and they are proving me to be correct. They are essentially maximising their losses in capital terms if we look at recent events and prices.
As an aside this is something of a generic as central banks bought at record high prices for bonds and are now holding them at much lower ones. There is an issue of how all this will be accounted for. They cannot go broke as they can simply print but they have passed on interest profits to national treasuries.
Returning to the Bank of England the two-year yield is up by nearly 1.2% since it announced its QT plan to sell £40 billion a year of its bond holdings. How long can it last and will it even start are now relevant questions for it?
Today’s Data
That has not gone well either, because if we start from the basics we see that annual money supply growth rose from 4.4% to 4.8%. The M4 numbers are erratic on a monthly basis ( as last month’s fall now seems to highlight) but we have had 2 strong numbers out of the last 4 which is not quite what one might expect in a tightening round.
Also mortgage lending remains firm.
Net borrowing of mortgage debt by individuals decreased slightly to £5.1 billion in July, from £5.3 billion in June. This is above the pre-pandemic average of £4.3 billion in the 12 months up to February 2020.
As is consumer credit.
Individuals borrowed an additional £1.4 billion in consumer credit in July, on net, following £1.8 billion of borrowing in June (Chart 2). This is above the 12-month pre-pandemic average up to February 2020 of £1.0 billion. The additional consumer credit borrowing in July was split between £0.7 billion on credit cards, and £0.7 billion through other forms of consumer credit (such as car dealership finance and personal loans).
Indeed it did this.
The annual growth rate for all consumer credit increased to 6.9% in July; the highest rate since March 2019 (7.2%).
Comment
Events are presently fast moving and the Bank of England has been caught napping here. There is a further nuance because the Schnabel critique has a blatant flaw.
the potential costs of acting too late.
Collectively they are a year too late and maybe more. Also this is a laugh out loud moment.
the threats to central bank credibility
It is tempting to suggest that only a central banker could say that but there are more than a few around that believe that. Although if we exclude those who hope for a job at a central bank the field does thin out.
But her U-Turn left the Bank of England looking out of touch as events developed.
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Next meetings:
ECB 8th September 2022
BOE 15th September 2022
BOE will have 6 days of golf to enjoy before making a half-ar€$€d decision.
Spelt it wrong – bo££ocks
The Bank of Canada is first up on September 7. Before the July announcement the CDHI MPC was calling for (not predicting) a 50 basis-point increase in September, which would take the overnight rate to 3.0%, although the MPC was only recommending an overnight rate of 2.75%. Even at 3.0% it would only be at the upper bound of the Bank of Canada’s range for a neutral interest rate, so hardly super-aggressive inflation fighting. We shall see.
On the inflation front Goldman says the UK could have 20% inflation next year
https://uk.investing.com/news/general/goldman-warns-uk-inflation-could-top-20-as-recession-nears-2735965
What beats me is the analysts are putting a lot of this to the International gas prices and the BOE can do little about this inflation, it is out of their control.
Putting interest rates up like they are doing in the US will have no effect on the gas price and although raising rates here may have a small effect on sterling I take the view that sterling is governed more by what the markets view the UK economy will be like, and that isn’t looking good at the moment.
If the economy was looking bright which it isn’t sterling would be stronger. The UK is in a hole at the moment with energy prices out of control if prices rise to nearer the £8,000 mark which have been mentioned in the media lately the average british family will be in deep trouble and we are seeing thar with credit card lending increasing.
Europe is in exactly the same boat though. In the poker game of central banking, the BoE is the muppet at the table. Check, call, check, call. Fold.
for god’s sake Peter we have 20% now , look around.
next year we’re in Turkey or Argentina land
If these daft sanctions are not dropped then that’s the tip
little food as fertizilers shortage , anything that required cheap gas – gone to the wall or more likely nationalized / subbed to the hilt.
Sri Lanka was a vision for the future , got to achieve Net Zero at any cost you know.
but why ? it will not make any difference at all to the CO2 because China,Africa,India, US and Russia are burning everything they can get , including what we don’t.
So IMHO its pointless for us to do this , and in fact suicidal ….
Both Buzz and I think this is “planned ” , he thinks its a cabal of master criminals ( I think) and I think it’s a bunch of bl@@dy useless idiots who behave like children
competent evil or village idiots , you milage may vary 😉
Forbin
Well Putin has the upper hand at the moment and that is for sure he is holding the democracies in the West to ransom, or put it another way punsihing the West for the intereference in Ukraine.
Then on the other hand you have the money people the oil and gas giants coining it in and punishing the majority of the working class.
If that lot isn’t bad enough there are the “Masters of the Universe” still manipulating the markets to their advantage one way or other whether it be the bankers or in the money markets maniputating the exchange rates to their advantage keeping the average working man down.
This was never going to end after the last financial crisis and it is just starting all over again.
We have strikes everywhere we look and there could be more civil unrest on the streets unless our politicians get their fingers out and tackle this energy crisis, the first point of action in my view is a windfall tax to let the working man know that at least they are trying, but I don”t have a lot of hope if Liz Truss wins the vote from their party.
Hello Peter,
ref ” punsihing the West for the intereference in Ukraine.”
Right as much as I think both sides are not the good guy here , the fact is that Russia accepted payments in Euro/dollars until the EU seized those funds for the Ukraine rebuild. The Russians then said we now only accept payments in Rubles . The EU refused ( mostly ) to this. Russia as far as I am aware has not refused to supply nat gas or oil , just stipulated the terms. If we , you and I that is , did the same , took services or goods and then said we’re not paying we would be considered theives.
So it can be said the effect of the sanctions is worse for the EU than it is for Russia. Would I have done something different ?, too right I would have ! The response was ill thought out and the consequences dire. And to be frank , given the state of leadership in the West , hardly suprising .
We in the West seemed to have lost compentent leadership . God help us , because no one else will!
take care
Forbin
Boss of Shell says the energy crisis could go one for years and public could have to keep warm in libraries !!!
I mean come off it, if the war stopped this year gas prices would collapse and no one can look 6 months ahead most people get forecast wrong.
As of people keeping warm in libraries, the may be able to keep a few people warm but they would become overcrowded.
The only short term answer so far as I can work out is ditch the green levies, reduce the VAT on energy and seek a winflall tax.
But I would also ditch the net zero and start open cast mining as an emergency measure and carry on with extracting oil from the North sea.
OK, Peter, let’s say the war stopped tomorrow:
It would only stop because either
1) Zelensky was prepared to accept Russian terms (Boris Johnson again flew out to Kiev to make sure that didn’t happen).
2) Russia decided that the price of the campaign was too heavy & that victory was too far off (Not likely as the reason WHY Johnson had to fly out again suggests).
Under which of these scenarios do you see Russia & the West trading as previously?
I cannot see an end to the problem of NATO belligerence, hence I cannot see oil/gas prices normalising.
Peter, there won’t be any civil unrest because of a)typical British apathy and also b)the level at which the winter fuel payemnts will be set will ensure people remain docile, of course this in itself will add to inflation as it will be money borrowed by the Treasury and monetised by the Bank of England, so just can kicking.
So stop worrying – your communist new government is here to provide everything you need.
Am I the only one who finds this Ukraine/energy crisis bizarre? We the “capitalist” west are acting like communist central planners and Russia who the MSM keep portaying as “communist” are now just trying to act as capitalist commodity producers selling to the west.
I’m old enough to remember the poll tax riots in the 1980s.
Still can’t work you out Forbin, you agree with Buzz it is being planned and yet you say it is caused by a bunch of useless idiots behaving like children – so not planned, which is it?
the difference between competent planning and incompetent planning ?
I’ve been in a few management meetings in my time and , well , its been ***** hard to stop idiotic decision making ……( I failed too many times I’ll admit )
Forbin
Hmmm. seems like a refusal to accept our government(and that of most of the west) is both terminally corrupt and under the complete control of those out to destroy us. Isn’t it funny that most of the really seriously wrong things with this country all seem to match entirely with the policies and aims of the globalists? What an amazing coincidence.
I recently read an indictment of our current politicall class the other day that I think sums it up perfectly, paraphrasing here – we now have a political system so corrupt that an election can be stolen by voter fraud and the party that lost does nothing about it.
The FBi even intervened before the election by suppressing the Hunter Biden laptop story saying it was Russian propoganda/fake news and even had private discussions with Mark Zuckerberg to ensure Feacebook censored any posts that would cover it.
I think you and Peter need to read the post from yesterday by PrivateFraser, who can see further than the incompetent politician excuse and see exactly what is going on.
https://www.zerohedge.com/political/fbi-leadership-ordered-agents-not-investigate-hunter-biden-laptop-whistleblowers
https://www.bbc.co.uk/news/world-us-canada-62688532
Is that all incompetence or what exactly???
KEVIN,
Even idiots can play games, and even Hitler planned to rule the world the guy must have been mad. History is litttered with leaders and nations who thought they could rule the world, all have failed so far.
Hitler tried with miltary domination, the latest attempt is much more sophisticated, controlling financial markets(mainly via central banks and corrupt governments willing to endlessly borrrow), main stream media(including movies/TV drama/advertising – seen many white actors in advertisements or dramas recently?), the education system(populated with far left/indoctrination), the legal system via corrupt politicians enacting laws(hate speech racism etc etc) to prevent the takeover, and the pursuit of endless wars – the military industrial complex, I could go on, but this time the level of control is so vast and far reaching I can’t see it failing.
Why not do a bit of research starting with Cultural Marxism eh?Who started that? Most of their principals seem to echo what is happening today, just another coincidence I’m sure?
Forbin, a recent video by Jacques Baud, former Swiss military colonel, mentioned the Rand Corpn’s publication, “Extending Russia: Competing from Advantageous Ground”, which was summarized in a much briefer pub, “Overextending and Unbalancing Russia”, which was considered a good thing in itself, never mind Russian behaviour. The huge range of aggressive or hostile options considered in the report is boiled down in the attached video to two main options: increasing US energy production and deeper sanctions against Russia:
Increasing US energy production, which was coming on strong under Trump, was dropped as an option by whoever is making decisions for Joe Biden, so now it is mostly down to tough economic sanctions. The Rand Corpn. isn’t really a private sector think-tank, and its reports are more the ruminations of the deep state. So it is fair to say that the crippling sanctions that are hurting so deeply the UK and even more the EU are not a response to the invasion of Ukraine. It is more a case that the US provoked the Russians to invade Ukraine to provide an excuse for absolutely unparalleled sanctions against Russia. Even the dating of the war between Russia, the DPR and the LPR is arguable. Rather than starting on February 24 with the Russian invasion of Ukraine, it could be dated from February 16 when the Kyiv government substantially increased its shelling of the Donbass. The very next day President Biden predicted that Russia would invade Ukraine in the next few days. So it would seem that this bombardment was carried out at the instigation of the United States, intended to encourage an invasion and give America an excuse to impose its coveted anti-Russian sanctions. Rather than a big display of Atlanticist solidarity, surely what is called for now is for the UK and the EU to disassociate themselves from unhinged US policies that threaten the prosperity and even the very lives of their peoples.
Thumbs up in BoE stimulus numbers.
Excellent post Andrew, how about someone researching the US blocking of Keystone XL pipeline from Canada and opposing Nordstream2 gas pipeline to Europe…….funny those two things never get mentioned when the media and politicians talk about the current energy crisis and high prices.
Upvote Federal Reserve stimulus number.
Shaun, this is a great meme. We need to revist weekly into the Autumn. This is SHTF time for the fakery of COVID printing in the EU, other 5 eyes nations including the US. We are all to get a battering and finally the dollar too. First of all its an ugly sister’s contest between the EURO and Sterling.
A contest that sterling can never win, a currency inflated away with scant regard for the consequences in order to allow UK politicians to strut about the world stage as if our country was still relevant let alone solvent.
And of course to continue inflating the housing bubble that can never be allowed to burst, since not only would the rest of the world see the fakery for what it is, but also the general population having been cosseted from the effects of our declining economy over decades by the inflation of our house prices will suddenly wake up to realise that it was all based on nothing but speculation and that instead of granting endless prosperity for having done little else than borrow money, it all now goes into reverse and the more you have borrowed the greater the losses and financial pain.
I will remind all the regulars of the warnings I gave years ago about the inevitability of the terrible price that would have to be paid for all the money printing and speculation in housing, I think we are now at that moment where it all starts to happen.
I also have every confidence in the arrogance and incompetence of the Bank of England who think that they can get away with quarter or half point rises in interest rates when all the others are doing 0.75% and 1% increases, does anyone seriously think they will match or exceed the others and in the process crash the housing market? Not a chance.
It won’t work since their refusal to raise rates will cause inflation to run even hotter due to the collapse of sterling causing endless rises in food,consumables and energy, every time the government then steps in to “help” will result in more borrowing, more money printing and consequently more inflation,mortgages will become increasingly unaffordable as the cost of living keeps going up, but don’t expect the experts in Threadneedle Street to work that one out.
The UK government is shortly going to crank up the printing presses to pay for A)the first phase of UBI -tax cuts to help consumers who cannot survive the price increases caused by money printing and B)the second phase of UBI(another long term prediction come true) this winter in the form of “winter fuel payments” -(can’t call it UBI can we? because of course it’s only temporary hahaha), add that onto the refusal of the Bank of England to raise rates to where they should be( my other prediction is a slow down when they get to 2.5%) and sterling will by then be falling like an anvil inside an elevator shaft, of course the above moves and policies will just make inflation worse requiring more UBI and screams from politicians that the Bank of England cannot and should not raise rates as consumers have suffered enough!!! .
I’m also keeping an eye on the NHS which following some very disturbing research, anecdotal evidence and some very negative personal experiences leads me to think it is teetering on the edge of a very large precipice. I think there is a good chance of a major crisis this winter as a result of staff shortages, funding crises, ambulance waiting times, inability of patients to get GP/hospital referrals/appointments, and a state of emergency declared where hospitals cancel virtually all procedures and admit only emergencies, with or without a covid/flu epidemic.
Where did all the money from the 1.25% increase in National Insurance go?
KEVIN: I’d remind you the the EU was not without its own covid stimulus, & that a number of EU countries are considering. or are definitely going to, directly subsidise the cost of domestic energy, which, in terms of money, could well be higher, because a lump sum in help will still have a greater downward pressure on usage.
We’ve not been printy-printy in isolation.
I know, I have on numerous occasions said the same people are behind this and also destroying the EU countries and the US, Germany’s economy is toast unless they backtrack – what are the chances of that?so we are not alone,, but sterling is the weakest and most vulnerable of the euro yen and pound – the three major currencies that are victims of the Fed’s mad dash to raise interest rates.
Kevin, your NHS observations are spot on, arguably it has already failed. It backed the injections and those are now “back firing”. Its a self destructive organisation and will fall this winter. Many other things will also got haywire so it won’tt be so obvious to people, like eating food and styaing warm will seem more important.
On a side note I noticed that in the 10 year BTP auction today the gross yield was 3.76%, the highest since Jan 2014. No ECB to pick them up in the secondary market anymore.
Hi Rzzr and good point
The ECB is there via the way it is managing its QE redemptions but it is on a much smaller scale than before. No doubt the Italian banks are buying in the hope of passing them onto the ECB but the heat is on.
Well it looks like we’ve seen the far-reaching influence of the US at work: drop sanctions on Iran to raise oil production level & Saudi Arabia (our murderous, autocratic, totalitarian, genocidal ally) immediately brings the price back up with production cuts.
If the US wants any more oil it’ll have to raise Syrian (where Nato bombed three times last week, but it’s a defensive alliance) larceny levels.
https://orinocotribune.com/us-steals-more-than-80-of-syrias-daily-oil-production/#:~:text=US%20Steals%20More%20Than%2080%25%20of%20Syria%E2%80%99s%20Daily,the%20theft%20of%20most%20of%20the%20country%E2%80%99s%20oil.
And there’s this:
“Selling into a declining market is really rather silly as they will exacerbate the fall. I have argued for many years that their plans for unwinding all their QE bond purchases were none too bright and they are proving me to be correct. They are essentially maximising their losses in capital terms if we look at recent events and prices.”
Since the govt. has effectively been shoveling money to the financial institutions like Casey Jones’s engineer, isn’t it the case that “selling into a declining market would also maximise profits for those who bought these bonds, & be in keeping with govt. strategy?
Hi therrawbuzzin
It depends what happens next because we are now at least to some extent seeing market forces in plat rather than central banks pretty much dictating prices. Also some of the buyers will be pension funds.
But if the Bank of England restarts QE then things could get rather awkward though.
Losses can be erased at the stroke of a key on a Bank of England computer, crediting the account with the losses with hundreds of billions in new “money”, that dilutes/devalues all other £’s but as long as the BBC and mainstream media report it as a complex financial transaction only the experts would understand no none will ask questions.
Hi Kevin
The issue is complex but we do need some form of accounting. After all we took the net interest as a profit so what happens to capital losses?
But as you say the mainstream media simply do not understand it.
Hello Kevin,
Getting the general public to believe in evil cabals is some what vexing , so I try a different tactic. I see it this way that the idiot cabal gets stopped and removed either way .
Military terms its called a pincer movement.
Forbin
Sorry, don’t agree.
Most people think we have unlimited mass immigration because we have “weak” politicians who are afraid of being called “racist”, similarly, they also think that politicians are stupid and hence the reason we never escape from our financial crises, so I’m afraid your strategy won’t work because they already think like that.
The simple fact is, until we fix the money we will never even get close to fixing all the other problems, the fiat money system is insane and obviously can never work since it ultimately requires an ifinite amount of debt, as all money is created from debt but the interest can only be paid by inflating the money supply to pay for it and so the currency keeps losing its value.
And who designed the current system? I suggest The Creature from Jekyl Island as abit of bedtime reading, it explains everything.It is a real horror story, but not in the way you migh think.
https://www.goodreads.com/en/book/show/66499.The_Creature_from_Jekyll_Island
Interest can also be paid from growth.
Can YOU guess?
I thought it was tea ….
GREEN tea?
You WERE told, now it’s coming out:
Hi therrawbuzzin and thank you for the link.
You may enjoy this about official minutes.
Hello Shaun,
Heat Banks , no need for money eh ?
ah heat banks , buildings where many people can gather close together
and catch coof *
I swear that nobody thinks these things through
* coof advice open the doors and windows to stop the virus load , uh oh
Hi Forbin
I was thinking about it in a different vein when I passed Battersea Park library yesterday. As part of the austerity measures it was closed on a Wednesday and Thursday. So there will have to be a U-Turn there unless those wanting to warm themselves around here will have to just be cold midweek.
Returning to Covid a friend of mine has not been well with it. But of the original symptoms the only one she had affected her sense of taste. Most illnesses are defined around what they do to us except this one….
Hello Shaun,
link from my post that seems to have been deleted
see if this stays up
Forbin
Woah! Looks like we might be agreeing on something at last Forbin!
UBI is here and to stay.Disagree with Katie though,US has been taken I’m afraid, under control of the animals – see my post above concerning the rigging of the last election, they had to get Trump out to move to the current stage of the plan.
Shaun,
Your comments section is becoming very political, so I thought I would have my pennies worth.
You keep saying that the B of E is way behind the curve with IR, with which I agree.
Surely there must come a point when it is not incompetence that is the cause, which only leaves the answer to be that it is deliberate.
The latest disaster unfolding is gas / electricity prices, which with the push for net zero before there is any infrastructure to cope with the storage necessarily required for renewables to work is insane.
Once again this cannot just be incompetence, but deliberate.
What is the agenda behind the B of E wanting a low pound and the government wanting us to freeze, it certainly does not seem for the benefit of Britain’s citizens?
Hi nickvii
I think that they trapped themselves by doing so much monetary easing that they felt they had to keep going until they could claim success as in us getting back to pre pandemic output levels. The Ukraine war has made things worse but the price of that was a rise in inflation ( it was on its way to 6% in terms of CPI before the war).
I engage with some on social media about net-zero and so many seem to have swallowed it hook line and sinker. I was being assured only 30 minutes or so ago that wind provided “energy security” when we are in a wind drought which has lasted around a month.
Those in power have kept taking what seemed the easy option.
Thanks for your reply.
How can anyone believe in wind providing energy security? Do they not look at the production figures; this month shows wind producing 3.6GW and gas producing 14.3GW (Gridwatch).
I have similar problems to you with some of my friends, who seem to believe in Wind Turbines so much that they think that I am reading the wrong type of web site, rather than admit that the intermittent nature of Wind Turbines is a problem. If Wind Turbines were so good and produced at anything near their capacity of 25.7GW (Government figures for 2021) then we would not be worrying about the price of gas.
Great blog and great podcast as usual, Shaun.
Yes, Isabel Schnabel came across as an inflation nutter at Jackson Hole, but some parts of her speech were disturbing: “The green transition and the war in Ukraine will LASTINGLY make fossil energy scarcer and more expensive at a time when renewable energy carriers are not yet sufficiently scalable.” (Emphasis added.) Take her points in turn. Why on earth would the green transition be made before renewable energy carriers are sufficiently scalable? Surely public policy should be directed at making people pay the social costs that come from global warming due to GHG emissions and let the transition to renewable energy happen when it happens, as the technology becomes more scalable. The assumption that the war in Ukraine will lastingly, which is synonymous with permanently, make fossil energy scarcer is even more shocking, especially coming from an economist from Germany, Russia’s most important trading partner (or at least it used to be). Why could this war not be settled and pipeline shipments of oil and natural gas to euro area countries resumed or even increased in the not too distant future?
She said later on: “There is hope that the war in Ukraine unites those who embrace the values of liberty, territorial integrity and democracy. And the determined fight against climate change [WEF-speak for global warming] holds the potential for strong and sustainable growth.” Here she clearly took a political stance on contentious issues. As far as I know, she didn’t go full Tiff Macklem and wear a Ukrainian flag broach when she delivered her speech, but she may have done so. The photos I googled of them all looked like vintage stuff from previous international meetings. In any case, this was way too political a speech for a central banker to be making.
She invoked the Great Moderation in her speech, but she is obviously no Paul Volcker. When Volcker was chairman of the US Fed he didn’t publicly fret about the ozone layer or the arms-for-hostages scandal. He stayed in his own lane. That’s how the Great Moderation came to be.
Hi Andrew and thank you
I agree completely as this has nothing to do with the ECB’s mandate. The central bankers are knowing doing what would be called Ultra Vires if they were a private company. The politicians should call them to account but the ECB is run by 2 ex politicians and Christine Lagarde. In our terms it started with Mark Carney who ran both our central banks and seems to consider himself a climate change expert these days.
Added to this the central banks have failed in their main job. In fact with high inflation and weakening economies things could not be going much worse. So frankly it looks an attempt to divert attention.
Mark Carney is not just a “Climate Expert”:
https://www.weforum.org/agenda/authors/mark-carney/
How about we ADAPT to any “climate change” rather than attempt to change the weather?
Far, far cheaper, by miles, BUT wouldn’t redistribute wealth as required, & certainly wouldn’t cause the social upheaval necessary to further bring in the global tyranny.