Mervyn the Moron ...Inflation Busters'R'Us .. or not as the case maybe in this global world of unexpectedly high prices which is due to Chinamen, er..
The Governor of the Bank of England Mervyn the Moron commenced his speech tonight in the most extrordinary fashion ...
"Can it really be only a year since we last met in this magnificent room? With the financial crisis continuing, I was tempted to deliver last year’s speech again."
Well up to a point Lord Copper , let us remind ourselves of Mervyn the Moron's wise words of wisdom last year ....
"Our central view remains that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills."
"Yesterday" said Mervyn, sounding as though he had just discovered the world wasn't flat....."Yesterday we learnt that inflation in May rose to 3.3%." .. continuing in Economics 101 he added to the world class crop of bankers and toilers at the economic cliff faces of the City of London ..."increases in food and energy prices ......are caused by the pressure of demand on the supply of food and energy in the world as a whole." Well might he have added "Yesterday all my troubles seemed so far away ...."
He pursued Economics 101 and the Port moved on to the left (or is it the right?) "Where Bank rate will ultimately need to move to bring inflation back to target is impossible to judge now." (This is the MPC what goes up ...er.. might ..er. go down
What has slipped by King, Brown, Darling , Balls and his crew, is that the MPC is a one trick pony. It has one target, and one stick, no carrots. Living in a global world the much forecast, predicted and predictable huge rise in European energy costs (eg FCUKED) , the accompanying rise in grain costs as yearly stocks fell ,and living standards in the third world accelerated has hit us just as the money jugglers have destroyed our currencies.
Mervyn moved onto the UK Housing market ..."Banks are adjusting to the fact that many asset markets are unlikely to re-open in their old form and..." this on the day (see previous post) when the Treasury blithely state that the Northern Wreck debacle is going to cost the tax payer. £19.3 Bn by the time it hits the books and not £14 Billion as recorded just now. ..slight accounting adjustment you understand.. but then in Sir John Gieve you had an expert in adjustments to the books ...see below.
Asset markets won't re-open in their old form.. a new form has arrived in which the tax payer is shoring up God alone knows how many shaky balance sheets in the City through the Bank of England taking in any old iron as collateral.
Sir John Gieve ,Deputy Governor of the Bank of England.
It is with enormous satisfaction that we can report exclusively that the most incompetent living Civil Servant, Sir John Gieve has "stood down" from the comical role of Deputy Governor of the Bank of England following his previous comic turn at the Home Office.
It will be remembered that he rushed along his Minister's mistress's, nanny's visa so she could accompany his mistress on a foreign holiday. It was his wife who acted as solicitor to David Blunkett when THAT affair was examined - but no conflict of interest there then.
Sir John left the Home Office to appear magically (and without any banking experience whatever) at the Bank of England , John Reid described the Home Office as "unfit for purpose" and the Auditor General wouldn't sign off the Accounts.(The National Audit Office report 31st January 2006: Report of the Comptroller and Auditor General on the Home Office Resource Accounts 2004-05 (.pdf))
It will also be remembered (seeing ID cards enter the public conscience and the Press again) that Sir John Gieve was unable to provide accurate cost estimates to the nearest £2 billion or so for the Identity Cards Programme which Sir John had significant oversight of, and over which he came to blows with the better informed London School of Economics.
The National Audit Office report :
Could not reconcile Home Office cash bank balances, to the tune of £ 3 million or so, but they "do not suspect any fraud"
The Adelphi computer system (about which the previous years NAO report warned them) appeared to be unable to deal properly with failed Bank Automated Clearing System payements i.e. a bog standard function of a large accounting system.
There were lax financial controls and insufficient audit trails.
Subsequent investigations showd that £946 million of "adjustments" had to be made to the accounts.
"To illustrate the scale of the movements: the amount owed to the Exchequer by the Home Office of £68 million in the September draft accounts became an amount owed by the Exchequer to the Home Office of £112 million in the December draft accounts".
Considering the present levels of leakage of secrets from Government offices it is worth while remembering what the much maligned Sir John Bourne said about security ..
15. Additionally, reviews carried out by the Home Office's Audit and Assurance Unit (the internal audit function) and by my staff revealed significant control weaknesses within the main accounting systems. The reviews found control weaknesses within key Information Technology applications including access to the system, inadequate segregation of duties, the creation of standing data and the ability to interrogate and monitor changes made. These weaknesses made access to the database by unauthorised staff possible, representing a risk to the integrity of Adelphi data and exposing the Home Office to a greater risk of fraud and error.
21. ...... Absence of checks made against Human Resources records to ensure that new users are authorised, and leavers are removed promptly; and
Absence of controls to detect unauthorised access to the database.
It was of course during Sir John's time at the Home Office that the loveable Beverley Huighes lost her job because the ome Office c ouldn't count up how many immigrants there were or weren't and the "scam" that continued for 18 months over the handling of migration applications from Romania and Bulgaria.
Sir John's fuck up at the Bank of England was, one has to say, as unlikely an event as say.... forecasting exactly one year ago ..."that inflation will fall back this year as the rises in domestic gas and electricity prices last year drop out of the annual comparison, and the recent cuts in prices feed through to household bills."
Mervyn the Morons Speech tonight is available on the BOE website here which is a bit easier than going to the BOE site and selecting About the bank > People> Mervyn King>Speeches by Mervyn King > select tonights speech
Odds on Sir John Gieve being ennobled soon ?