The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.
The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet – a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel’s Government in 1844 which originally granted the Bank the sole right to print UK money.
The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority.
However, some have warned that it means: “there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses.”
It comes after the Bank’s Monetary Policy Committee cut interest rates by half a percentage point, leaving them at the lowest level since the bank’s foundation in 1694.
The Keynesians amaze me. The public amazes me more. If it were true that spending was THE way to get things moving and to keep things moving… why exactly wouldn’t they advocate unlimited spending? Why care about debt? Print to cover it. If Obama’s plan won’t reduce unemployment to zero why don’t they just spend more? They only talk of what good the spending will do and try to ignore any talk of side effects. The public takes all this with blind faith. No questions what so ever. Are the Keynesians actually drinking their own flavor aid? Do they even know they are?