Tell us more oh wise one

I have but one observation to make. The franc is dramatically over-valued (as the Swiss Central Bank would agree) for one simple reason, and that is because hot money (mainly from Russia) is seeking refuge in Switzerland’s tax haven banks. There is no other explanation.

Actually, it’s mainly eurozone to Swiss Franc. Which is why the explicit peg was against the euro of course.

48 thoughts on “Tell us more oh wise one”

  1. Given that he doesn’t have a Scooby do as to what QE really is, or the difference between credit and money….as this PPC guy is pointing out, can we really be that surprised?

  2. The real joy of this comment is that this is exactly what the SNB has been doing. Creating francs to buy euros in order to lower the CHF/EUR exchange rate. And they’ve had to stop doing it. Because they’re pumping up the Swiss money supply so far that it would be almost impossible to reverse it and thus avoid a burst of inflation in the future.

    The SNB has actually reached the limit of QE, that’s why they broke the link.

  3. They prefer to take the hit now, rather than 3 years later when the it would be a full-blown crisis.

    Seems responsible to me.

  4. I think Tim that Ritchie would accuse you of creating a straw man. He has begun the back – peddling. He does “not argue that this can be done without limit”. No, but he has never once written about the limits except to acknowledge that it might be at “full employment”. And even then his definition of full employment differs from just about everybody else.

    P.S. My offer regarding the idiots who let him loose on an A level class stands. And the Bank of Ironman is happy to issue the promissory note in Swiss francs or Zim dollars (it’s preferred option tbh) or even Reichmarks.

  5. Thanks Ironman.

    He’s now deleting my posts. I called him for contradicting himself on the Green QE thing. Compare and contrast:

    “Of course creating money dies not make us wealthier”

    “this ability to create money out of nothing can, when an economy is working at less than full capacity, be used to deliver prosperity costlessly and without obligation for the loans to be repaid”

    I’m guessing the man is simply not smart enough to understand these slightly more complicated financial problems, and simply regurgitates whatever he reads on the lefty side of the internet with his own statist spin on it – passing it off as his own original work.

  6. PPC

    Yes agreed. However, I think he is also just plain subborn. The ground really does need to shift from under him before he will acknowledge he isn’t on a firm footing.

    As I say, he is beginning, just beginning to back peddle. However, my favourite part of it all was my offer to him to expand his “that’s it” analysis. Even then he didn’t see the train coming his way. So yes, I agree, he’s a bit too simple for his blog.

  7. Am thinking of emailing Richard Werner himself to see if he will share his thoughts and opinions on Murphy’s bastardisation of QE….given Werner himself complained that QE itself is a misnomer for monetarisation by the ill-informed.

  8. It would be interesting. I wouldn’t be surprised though if Werner was broadly in favour of some extensive money printing at the moment, if not in the UK then probably in the Eurozone. And the Eurozone situation is crazy enough that I might be inclined, notwithstanding the prejudices of my entire adult life, to agree.

    Another magic Murphy moment was his response to Werner’s idea of central bank money creation backing a direct acqusition of banks’ toxic debts. Given that the effect of this would appear to be QE on steroids, I thought he would be outraged at the stimulus to assets prices, helping the rich etc. No, he had no comment to make and hadn’t read this one little part of Werner’s work. How strange.

  9. Well I’ve been blocked over at the Murphs place. Not exactly surprised. Seems anyone who shows him up or generally disagrees with him gets that treatment at some point.

    I get the feeling he reads a brief part of some other persons work, but then either loses interest or the ability to follow what is being said. Then he just asserts they agree with whatever he is now saying. It’s certainly clear he hasn’t read what either the BoE or Werner have really got to say.

  10. PPC

    The majority of people commenting here have been blocked or banned from his place – his position is invariably so weak, and his ignorance of almost everything (not least economics) so boundless that deletion/ prohibition of further comment is all he is left with. Indeed as soon as you see him use the word ‘troll’ you know his ‘argument’, such as it is, is exhausted.

    I seriously wouldn’t even bother – most now consider him a fringe crank, and the staggering post on Charlie Hebdo where he compared his ‘persecution’ (I.e people disagreeing with him)with the massacre really plumbed new depths – it’s truly a waste of time even attempting to post on TRUK.

  11. Andrew M – My guess is that even he recognises that he has to have some limited dissention on there, otherwise the entire comments section will just be a circle jerk between Ivan Bollocks, Bill Kruse and Carol Wilcox.

  12. I try to stay away from his site but it’s like a car crash, you can’t help looking. I’ve noticed that more and more comments just seem to be along the lines of “you’re so right, richard, it’s all a terrible plot by bankers/tories/squirrels”. Presumably opponents are all being banned and/or realising it’s futile to attempt a reasoned debate.

  13. He’s even deleting friendly stuff these days. One of his commenters called for an elected head of state, to which Ritchie said “I agree”. I suggested that he put his name forward for the post, but would he let it through? Would he buggery!

  14. PPC

    Thought it worth echoing two points you raise:

    ‘I get the feeling he reads a brief part of some other persons work, but then either loses interest or the ability to follow what is being said.’

    I have often speculated he suffers from a form of OCD and much of what is written is too complicated and nuanced for him to grasp. Luckily you were not treated to one of his Facepalm moments where he accuses one of his critics of ‘an inability to understand nuance’

    ‘I’m guessing the man is simply not smart enough to understand these slightly more complicated financial problems, and simply regurgitates whatever he reads on the lefty side of the internet with his own statist spin on it – passing it off as his own original work’

    Spot on – one of the greatest frauds in UK politics in the last decade is that this man has set himself up as a ‘tax expert’ and ‘pre-eminent economist’ despite having very limited knowledge on either topic. Very little that comes out of his ever-mutating neurosis could not easily be referenced with standard marxist economic theories from the early twentieth century up to around 1980.

  15. seulmoi

    Don’t forget the two other members of the ‘Gang of four’ – Howard Reed and Andrew Dickie. Also new contender Mark Crown who has the potential to top them all in his obsequiousness……

  16. There’s good money in it though. Look at Russell Brand – he makes quite a living from ranting about evil bankers.

  17. @Van_Patten

    Yes, Mark Crown displays all the knowledge, loyalty and obedience of a 8 week old puppy. I imagine his tongue actally hangs out and he dribbles on the keyboard as he pens another missive of affection to his master.

  18. @Andrew M – Murphy tells a certain sector what they want to hear.

    There are winners and losers in society and of the losers there are those who refuse to be downbeat and pick themselves up to start again and those who are saddened and want to be told it isn’t their fault.

    Murphy provides comfort to this last lot.

    It’s why Murphy’s supporters are a lot of sad losers.

  19. Andrew M

    Dare I say it he shares much in common with Brand – extreme ignorance, a preternatural indifference to correction, a tendency to become violently offensive towards those who disagree and an army of supporters who are also equally ignorant of anything beyond a narrow politically correct bubble and quick to yell ‘troll’,’racist’ or ‘hate speech’ at anyone with the temerity to educate them.

    No doubt in his rare moments of contemplation he imagines having a similar number of followers and as high a profile as Brand – if only he were twenty years younger….

  20. Ghandi’s dictum was that first they ignore you, then they laugh at you, then they fight you, then you win.

    Murphy is going about matters in almost precisely the opposite direction.

    I’m currently at the laughing stage.

    I mean… ‘I have but one observation to make.’ You can almost taste the gravitas, and it tastes a long way past its sell-by date.

    He reminds me very much of the old military saying – ‘Train like Tarzan, fight like Jane’.

    The posturing he can do, the trouble is he doesn’t do the thinking.

  21. Interested

    As always, spot on – and I expect (and hope) that in the wake of the 2015 election stage 4 of the reverse process – ‘being ignored’ will happen quite quickly. I will of course miss Tim fisking the guy, and it might be worth chiming into TRUK to see how angry he gets when he is ignored like the fringe crank he has shown himself to be too numerous times to mention.

  22. @ interested – “Ghandi’s dictum was that first they ignore you, then they laugh at you, then they fight you, then you win.”

    Murphy takes comfort from the fact that they laughed at Ghandi but forgets that they also laugh at Bozo The Clown.

    And Murphy ain’t the Ghandi of tax.

  23. seulmoi

    I believe the Twitter feed is still up for Murphy Richards but there has been no activity for a few months – in the site itself, the author said ‘he had been hit by a bus and knocked into a coma’ – however, I tend to think that anyone who can bring themselves to log onto TRUK (barring Arnald) would agree that since the Maugham blog he has just degenerated into a barely coherent amalgam of whatever sweepings of the mind he can find in dark corners of the internet and a hefty portion of standard Hard Left tropes. I think they just realized the greatest satire was provided by the man himself…

  24. I tend not to comment on the Maughem blog because disagreeing with his thoughtful commentators requires time and thought. I do disagree with much written there but by the time I have the spare few minutes to sit down the moment has passed and the blog has moved on.
    A pity really because can respect, even appreciate those with whom you disagree.

  25. Ironman

    I agree completely and that is why I have respect for Jolyon and absolutely no respect for Murphy. One pays the most grotesque lip service to freedom of speech whilst doing his utmost to suppress it, whilst one is actually attemptin to facilitate debate.

  26. Bloke in Costa Rica

    The pomposity of the “I have but one observation…” is awesome to behold. It reminds me of someone complaining about the phrase “it has been brought to my attention…”, which apparently was much-favoured by the late, very unlamented Ted Heath. The de haut en bas condescension just drips off it. Fuckwit.

  27. Bloke in CR

    Oddly a variant of this style of argument was used by arguably the single most critical influence on my economic thinking, the late Lord Peter Bauer – who would often say, ‘I have only three/ five/seven points to make’ (it was usually some odd number)

    The difference of course being that the urbane, sophisticated and intellectually awesome Hungarian emigre was arguably the most influential developmental economist in the subject’s history, whereas Murphy is, putting it as politely as I can, a quick-tempered, barely coherent, utterly ignorant buffoon whose claim to expertise is entirely predicated on his own boundless narcissism.

  28. Isn’t it satisfying to know, however, that the Murphmongster does occasionally sneak across here and have a look?

  29. @ Andrew K
    Satisfying, perhaps, but also worrying unless we are all singles/widows/widowers with no children who could be persecuted by Murphy’s “Courageous State”.

  30. OK. Some view from CH after the thick end of a bottle of CH wine. Oh, Chasselas, where had you been all my life?

    Basically, I don’t give a flying one what the Witchtaxer general thinks of the CHF situation. Since he’s got an IQ on the southern side of a particularly inbred Flemish Lop, really no-one higher in the evolutionary heirarchy than a slightly brain-damaged kitten should pay him any heed.

    The SNB had valiently defended the floor of 1.2 since about September 2011, by printing unlimited numbers of CHF to buy unlimited numbers of EUR. To support exports, upon which CH depends (we’re not all banksters here, contrary to popular belief).

    After the ECB declared that it would start buying up garlic paper, the SNB gave one signal that its policy might change. About Tuesday, they said “Maybe we’ll consider a broader approach, not only with respect to EUR but to other currencies too.” Otherwise, they said nuffink.

    Then at opening yesterday. “Hoi zäme. Bonjour tout le monde. You know how we said we’d buy EUR at 1.2, well, we changed our fucking minds. Suck on that, f*ckers. And btw, interest rate goes to -0.75. Float that f*cker on your markets”.

    Immediate reaction: EUR hits 0.86 CHF. Rebound to about 1.02.

    Congratulatory e-mails sent to my border-crossing colleagues, “Félicitations on your 15% increase in remuneration today”.

    Anyway, I’m starting to ramble. Effectively, the SNB has had enough, and isn’t prepared to follow the EUR into the pit of unlimited QE piling on more QE, buying worthless garlic paper. Next time I make fondue, I’ll send them some garlic paper for free – it’s probably worth more than Greek bonds anyway.

    Current iteration is to try to put the interest rate negative enough that nobody wants to keep CHF. I suspect that -0.75% is just the start. To which people in CH will respond by signing up to Banco de la Mattress.

    And a final point. The CH stock market tanked by 10% yesterday. However, if you’re a US citizen in CH and invested locally, I’d like to simultaneously commiserate you on your 10% local loss and congratulate you on your 3% capital gain, of which the IRS will be coming for a piece.

  31. “The pomposity of the “I have but one observation…” is awesome to behold.”

    “Needless to say, I had the last laugh”

  32. Rob, you beat me to it. U then I have been out on the lash in Liverpol’s student quarter. The girls have been awesome and so I still think I’ve got the better if the deal. So well done you.


    I’m going on my mate’s stag week in a couple of weeks. He lives in Zurich, so we’ up there. Then we’ll head to St Anton and ski for a week. I like CH.

  33. Meanwhile my wife has been cleaning our home to make it nice for the weekend and is disappointed to find that I really don’t give a shit. Is it me?

  34. Exactly what Labour and its supporters meant by weaponising the NHS. Couldn’t risk the privatisation succeeding, and will probably end up with the hospital closing instead.

  35. I allowed myself an almost serious observation on his thread about 9 EU officials being involved in tax avoidance matters (i.e. 9 too many) and earned myself this:

    One could reasonably argue that comment is fatuous gibberish based upon ill informed opinion intended to permit the continuation of abuse

    On another thread in which he claimed that people are paid to write disobliging things on his blog, I asked:

    I’m afraid I’m only a very irregular visitor here but I could readily become much more frequent.
    This may be a naive question but is there any evidence that people are paid to come here and how does one enrol?

    which only merited:
    There is evidence of paid commentary on the web Thee is no direct evidence here

  36. What abacab said. This is about the insane Eurozone and its even more insane central bank, not about the (relatively sane) Swiss National Bank.

    The really depressing part of this is that everyone is hating on the SNB and totally missing the point. The ECB is about to do something approaching 1 trillion Euros of QE. The SNB is not about to hoover up all those new (devalued) euros at the price of blowing up its own balance sheet, given the strength of its domestic goldbug community. And the ECB is not exactly likely to be friendly if its valiant attempts to debase the Euro are undermined by the Swiss. Switzerland has a large trade surplus. It can afford to let its currency appreciate for a while if that maintains friendly relationships with the neighbours. After all, it has a lot of Eurozone bonds to sell at some point, and it will need a buyer. Antagonising the ECB is hardly in its best interests.

    I really don’t buy the Swiss economic disaster story – or at least not the currency appreciation/deflation/recession one, which is all we are hearing at the moment. Dutch disease because of its ridiculously inflated financial sector and lack of much in the way of real industry, now that’s much more of a disaster story and it is true that allowing the currency to appreciate won’t help sort that out. But I’m not sure the Swiss really want to sort it out anyway. They would rather everyone just allowed them to get on with their traditional job of facilitating money flows for oligarchs and drug barons and stopped moaning about tax losses and money laundering. The trouble with countries suffering from Dutch disease (whether due to oil, narcotics, arms deals or an overblown financial sector) is that they don’t know they are ill.

    I should add that in the absence of fiscal expansion, currency devaluation is the ONLY way QE could possibly work in the Eurozone, since rates are already on the floor, German yields are negative and banks don’t want to know (just look at the TLTRO takeup). I wonder how long it will take other central banks to realise what the ECB is up to and put together a coordinated programme to counter its attempt to export Eurozone deflation to the rest of the world.

  37. Frances

    A practical question: ARE the Eurozone’s rates really all on the floor? Yes I know Germany rates may be negative, buy is that really really the picture around the Eurozone?

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