Is the Bank of England monetary committee INCOMPETENT ?

ScoobyZ

Just curious as no one seems to ask ?

Of course I wouldnt be asking this question if I was a saver and had no mortgage. But isnt all the recent rate rises a little bit like black wednesday's big hike only over a few months rather than a few days.

Back on black wednesday, I remember it as we had to pull out of the ERM due to the pound falling. However the pound at the moment is at the highest level against the dollar that I can remember. I know inflation is above its target rate but I though the job of the EMC was to predict and take appropriate action not keep hiking up the rates a little too late.

"Each member of the MPC has expertise in the field of economics and monetary policy. Members do not represent individual groups or areas. They are independent. Each member of the Committee has a vote to set interest rates at the level they believe is consistent with meeting the inflation target. The MPC's decision is made on the basis of one-person, one vote. It is not based on a consensus of opinion. It reflects the votes of each individual member of the Committee."


I have just seen a report on the BBC how the usa is suffuring from high interest rates and people on lower incomes are having their houses reposssed, and with the latest batch of figures showing repossesions beginning to rise in the UK they must take this into account along with other things like business and export and not just the inflation rate ???

In my opinion they have seemed to have got it wrong, but I see no news report questioning their abilitys. If a minister gets something wrong that effects thousands of people it is main news, but I feel the members of the EMC have got it wrong and we dont even here there names nor question their credentials.

Im not financial wizard, just a normal average wage earning person that works to live and am fed up with the rich getting richer and the poor getting more benefits.

Anybody else got any thoughts on Bank of Englands Monetary Committee ?

kingkano

ScoobyZ wrote: »

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I have just seen a report on the BBC how the usa is suffuring from high interest rates and people on lower incomes are having their houses reposssed, and with the latest batch of figures showing repossesions beginning to rise in the UK they must take this into account along with other things like business and export and not just the inflation rate ???

Its not really anything like 'black wednesday' - when rates rose 6% in one day from 9% to 15%. And because of trading on the currency markets the £ lost most of its value. There is no comparison to now (even in just the rate hikes. 4.5 - 5.75 is nothing like 9 - 15).

Right as for the above they must - no they really won't. Their job description has just one line - control inflation. They won't want to cause a recession in the economy but they will otherwise pretty much not care about things beyond inflation.

It has to be said interest rates are a blunt tool against inflation. But they do have some effect. I'd agree the MPC (as in 2004) have just got it a bit wrong. They are only human I guess, but they do seem to make curious decisions sometimes.

ManAtHome

Any incompetence is about keeping rates too low for too long - now they're having to play "catch up".

The main criticism should be directed at the idiot who moved debt, money supply, and asset bubbles out of their remit.

Tallymanjohn

The problems in the US are down to high risk lending that has now come home to roost - the biggest concern is that a lot of the lending has been passed on to worldwide financial organisations as parts of larger packages so we are all going to suffer in the long run. About the only 'good' bit of news is that it will reign in a lot of the private equity market.

ScoobyZ

Thanks, some good points. Keeping the rates too low for too long was interesting. shame our rates cant mirror europe. http://news.bbc.co.uk/1/hi/business/6927200.stm

cells

In my opinion they are trying to crash the housing market and with it uk stocks ect via increasing the base rate.


Why would they want to do that? Simple, they along with their rich pals have sold all their properties and stocks, and are heavily in cash. So now increase the base rate, getting you more interest on your cash and also crashing house prices and stock prices in time.


Then when house prices, stock prices are cheap again they will buy up.


Repeat the process every 20years and “legally” steal the nations wealth into the hands of a few hundred rich dominant men.

cm233lh

ManAtHome wrote: »

The main criticism should be directed at the idiot who moved debt, money supply, and asset bubbles out of their remit.

That'll be the man at no. 10 now won't it?

It's always struck me as rather harsh to make mortgage payers pay to reduce inflation. We want inflation high, because then our 4-time-salary loans will only be a couple of months salary when we come to pay them off. If anyone should pay for low inflation it should be the financially independent and those with large cash savings. They benefit from low inflation, but then they benefit again from the means used to reduce it. Grossly unfair!

Jonbvn

cells wrote: »

In my opinion they are trying to crash the housing market and with it uk stocks ect via increasing the base rate.

Why would they want to do that? Simple, they along with their rich pals have sold all their properties and stocks, and are heavily in cash. So now increase the base rate, getting you more interest on your cash and also crashing house prices and stock prices in time.

Then when house prices, stock prices are cheap again they will buy up.

Repeat the process every 20years and “legally” steal the nations wealth into the hands of a few hundred rich dominant men.

ROFLMAO!

Tell me you're not serious......

ScoobyZ

Inflation down today. Now thye just need the housing market to crash and $3 - £1 and they may cut rates again.

Scott

*hands out the tinfoil hats*

cells

Jonbvn wrote: »

ROFLMAO!

Tell me you're not serious......

it is exactly what i would do.



bring interest rates really low, which will push up property and stock prices. Then sell my property/stock. Then slowly bring up interest rates to 3x their previous level crashing housing/stock market. Then using my cash to buy property/stocks cheap.

repeat the process every 20 odd years, and name this boom and bust something like "the business cycle". blame it on anything i can to avert attention from the real cause which would be a stupid and rigged "central bank"