Snippa gets snippy

It takes a special style of incompetence of the sort that only a Governor of the Bank of England with no experience of the real world can have to talk about reselling QE assets back into the market at this stage in the current economic cycle, but that’s what Bank of England Governor Andrew Bailey did yesterday.

Bailey said that when the time comes to then he’d favour reducing the balance sheet – selling QE gilts back into the market – rather than raising interest rates.

Snippa then goes off on one about how this is really terrible right now. Entirely missing the bit about “when the time comes”.

Snippa even tells us, correctly enough at this level of detail, when that time will be:

But what it also shows is that he has no clue about the realities of the balance sheet he is supposedly managing. His balance sheet is too big if there is inflation.

Yep, so when inflation turns up – or is likely to, given that monetary policy has a lag before it takes effect – then the BoE should redice the size of the balance sheet.

What’s got Snippa hysterically clutching those pearls is obvious enough though. If we start having discussions about when to reduce the size of that balance sheet then his insistence that QE debt isn’t even potentially part of the national debt rather fades away. And that would never do, would it?

20 thoughts on “Snippa gets snippy”

  1. Elsewhere, he tells us:

    “So, how to take power? To some extent, simply ignore the issue of power is my answer. Simply prove that you have a better answer.”

    Answers that are so good, in fact, they have to be protected from trolls, time-wasters and other librarians paid to distract him from his one true mission.

  2. @Dennis, he did tax returns for actors and musicians. He might have prepared accounts for a few small companies and partnerships. Just the sort of expert you expect to be running a national bank

  3. He imported the Trivial Pursuit board game into the UK via a company established in Eire as a tax avoidance structure

  4. Dennis, Central Banker to the Gods

    @Dennis, he did tax returns for actors and musicians. He might have prepared accounts for a few small companies and partnerships. Just the sort of expert you expect to be running a national bank

    Well, I have that beat. So where do I sign up to run the Federal Reserve?

    Oh, Donald! Donald! Yoo-hoo!

  5. if you enter trivial pursuit richard murphy into google, one of the hits is Spud’s CV from 2006.

    The funniest bit is

    Infernet Limited (now whereonearth.com
    Limited)– CFO – 1997 to 1999 – Internet company
    developing geo-spatial data-basing techniques for
    search engines
    ….
    The company was sold to Yahoo in 2005 for £28
    million (most of which benefited the venture
    capitalists)

    You can hear the bitterness…..

  6. “It takes a special style of incompetence of the sort that only a Governor of the Bank of England with no experience of the real world”

    But a CEO of a bank with no experience of the real world, let alone the banking world, and is a drug addict is fine. #Coop

  7. Isn’t this the same guy that, a few years ago, was telling us about how banks should be run by people with no experience in banking in order to ‘weed out corruption’ or something?

    He should be crowing to the world about how the government is taking his advice!

  8. @Andrew C, well spotted. I note that the CV says he was chairman/CEO/CFO of a number of other companies in the 1990’s. His current lack of cash implies that he didn’t have had any equity in any of them!

  9. Dennis, Soccer Hooligan

    @Andrew C, well spotted. I note that the CV says he was chairman/CEO/CFO of a number of other companies in the 1990’s.

    Evidently his habit of alienating everyone who crosses his path didn’t start when decided it was up to him to Save The World.

  10. tell me about it Ricky, How the hell can a BOE guvnor that hasn’t done the hard yards doin’ the books for the local minicabs know what’s the best to do with QE assets?

  11. Sold to Yahoo!…. Now if ever there was a corporate shell/zombie that solely still exists to bail out failed ventures for Friends… ROFL!!

  12. Lets be honest, the whole ‘We really are going to sell all these Gilts we’ve bought with our magic money tree back into the marketplace, honest!’ shtick is wearing a bit thin now. There has been zero sign that pre-covid the BoE had any intentions of reversing its previous rounds of QE, and now its exercising the print button ever faster due to CV-19 the likelihood of any of it ever being reversed fades into oblivion. The whole Bailey speech is just part of a pretence that they aren’t monetising the deficit when they really are. Every major currency is, and no-one has any intention of stopping, let alone reversing it.

  13. @Sam Jones – June 23, 2020 at 5:32 pm
    “…I note that “the CV says he was chairman/CEO/CFO of a number of other companies in the 1990’s. His current lack of cash implies that he didn’t have had any equity in any of them!”

    Or, he did but the inevitable happened…

  14. Perhaps the correct way to think of this is that when setting up a new company you go around to an accountant who has a few companies sitting on the shelf. Then you perhaps use that accountant to set up the VAT registration, get the basic accounting system sorted out, maybe keep them on for a year or two. Then once anything interesting starts to happen you bring in the people you actually want, some proper professionals at management, not the jobbing high street accountant.

    That is, at least, the way I would read much of this.

  15. It’s not entirely bollocks. The Federal Reserve did indeed shrink their balance sheet by selling Treasuries back to the market. Or rather, as they matured did not reinvest the proceeds which has exactly the same end effect.

  16. I have, personally, founded dozens if not hundreds of companies, if by ‘founded’ you mean filing the forms at Companies House that create the company.

    As Tim alludes, there was a time when companies were created by formation agents as nothing more than shells and “kept on the shelf” until needed by a client. Companies Act 2006 and the internet changed all that and now you can form a company online usually within 24 hours for £12. Or you can pay me £225 (+VAT) and (i) I’ll do it properly and (ii) I’ll discuss with you your plans so the formation can be planned around these and (iii) you’ll get hard copies of registers and formation documents.

    Spud was a director of a number of companies at the same time he was partner at murphy Dolan Neeks. Not unusual as an accountant is often appointed as FD if a company is new and can’t justify a full time FD. One of my fellow directors does this. Difference being his appointments last decades rather than spud’s usual year or two before the client obviously gets pissed off with dealing with the obnoxious twat.

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