Saturday, 6 December 2008

Oh fuck....

Many bloggers such as Guido and Obo are picking up on an ammendment to the Banking bill:

Section 6 of the Bank Charter Act 1844 (Bank to produce weekly account) shall cease to have effect.

What does this mean? In short, that the Government no longer want us to know how much money the Bank of England is printing. This can only mean one thing - they're planning on printing shitloads of it. We are fucked.

As Wikipedia says:

The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. This results in an imbalance between the supply and demand for the money (including currency and bank deposits), accompanied by a complete loss of confidence in the money, similar to a bank run. Enactment of legal tender laws and price controls to prevent discounting the value of paper money relative to gold, silver, hard currency, or commodities, fails to force acceptance of a paper money which lacks intrinsic value. If the entity responsible for printing a currency promotes excessive money printing, with other factors contributing a reinforcing effect, hyperinflation usually continues. Often the body responsible for printing the currency cannot physically print paper currency faster than the rate at which it is devaluing, thus neutralizing their attempts to stimulate the economy.

Which in short, is what happened in Zimbabwe.

Fuck sake, it seems each week we discover a new level of stupidity within our government. The hand-wringing bearded Trotskyists seem happy to take their social experiment to the bitter end.

Also further down the Wikipedia article:
Governments will often try to disguise the true rate of inflation through a variety of techniques. These can include the following:

* Outright lying in official statistics such as money supply, inflation or reserves.
* Suppression of publication of money supply statistics, or inflation indices.
* Price and wage controls.
* Forced savings schemes, designed to suck up excess liquidity. These savings schemes may be described as pensions schemes, emergency funds, war funds, or something similar.
* Adjusting the components of the Consumer price index, to remove those items whose prices are rising the fastest.

None of these actions address the root causes of inflation, and in fact, if discovered, tend to further undermine trust in the currency, causing further increases in inflation.

(the last option on the list is pretty much standard form for the government now).

Anyone else considering emigration? It's looking like a more attractive option every month. Global problem my fucking arse.

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