I think he is you know:
and it shows that the current borrowing cost on 10-year gilts is, supposedly, 4.99%.
Let us be clear about this: there is no reason at all for this borrowing cost to be that high.
Umm, well. The grand threat to bond holders is inflation. We expect the rise in oil prices – Hey, Spud’s even told this will happen! – to lead to more inflation. Therefore buyers of bonds are less happy holding gilts in the face of the inflation threat. So, fewer hold fewer, price rises.
This is not complex thinking.
There is, however, one obvious response to this situation which the UK government should be taking, but which it clearly is not. When the world wishes to sell UK government bonds, at what must be an undervalue, because that is why the interest rate appears to be so high, the job of the UK government is to buy them in whatever quantity is required until the point is reached where the UK government has achieved the interest rate that it desires, which will be one way lower than 4.99%.
Well, that’s QE.
And let us not pretend that the UK government has not got the capacity to do this. When the UK government chooses to buy government bonds, all it does is an asset swap. It replaces bonds in the market, on which it pays an interest rate of 4.99%, with cash in the central bank reserve accounts, on which at present it is paying 3.75%. It is grossly irresponsible for it not to take this action at present, because it is imposing a cost upon us all which is utterly unnecessary.
Yes, that’s QE.
So, Spud’s solution to an increase in inflation is to print more money and thus increasse the money supply.
There’s a joy in just how insane that is…..
Governments sell bonds to raise money. Governments buying THEIR OWN BONDS does what?
It’s all explained in the Joy of Tax.
According to the Spud, governments don’t actually need to do that. Somehow, I’ve forgotten his “reasoning”.
The Gubbinment could issue a whole lot of gilts with a coupon of say two per cent. Within days they would be trading at five per cent, or whatever the market decides. Traders know this, and would rather not take a beating by subscribing to the issue.
I assume he’s got another mortgage statement or credit card bill.
Even if he’s right that the bonds are “undervalued” (and I think we can all estimate the chances of that) why would sellers want to dispose of them? Selling assets underwater is a huge red flag for confidence. The kind of thing that happens before the crashes he’s endlessly predicting for example.
In politics we have Trump’s Tourette’s: I’m thinking of, for example, his blurting out of an allusion to Pearl Harbour while sitting with the P.M. of Japan.
In sorta, kinda Economics we get Murphy’s Tourette’s – blurting out a haphazard selection of drivel in any old context at all.
“Like Trump but less disciplined” is not high praise.
Whatever Trump’s vices at least he also has some virtues. Not so the Ely Gauleiter.
Re his Pearl Harbor remark, I think that was a perfectly good analogy. Everyone knew what it meant.
Don’t mention the war. I did once, but I think I got away with it!
It’s also refreshing to have a President or Prime Minister that isn’t terrified to say something that someone somewhere might find offensive
The analogy fails, I’d say. The Americans had cracked the Japanese codes so Washington knew the attack was coming – in other words their provocation of Japan had worked.
To ensure there was lots of damage they kept the forthcoming attack secret from their commanders in Hawaii.
Does anyone think Ayatollah Adolf I and his henchmen knew that Israeli assassination attack was on the way? Indeed, does anyone think that Japan and the USA were in some sort of peace negotiations when Japan attacked?
Dear God, FDR was a shitbag.
But the modern thing is that decendants are guilty for the actions of their ancestors, so shouldn’t we be demanding reparations from the Japanese?
I’ve had plenty. Fnaar, fnaar.
Sorry Tim, but The Sage has a YT video titled Economics Is Fiction. Therefore he is right and you are wrong.
Jesus Prune! The Naked Capitalism blog devotes space to the Murph. God spare us all.
https://www.nakedcapitalism.com/2026/03/economic-questions-the-robert-nozick-question.html
Yeah. Nozick was a seriously distinguished and influential political theorist, so naturally Spud is capable of dismissing his work in a 500-word blog post.
Well, it’s a living. I suppose.
When I checked out naked capitalism it appeared to be on the pink side of center. Although the linked article is meant as a serious inquiry into Nozick’s credo, the arguments are not very sound.
That’s just Spud. Turning on the taps is his solution to everything. Carry on kicking the can down the road until it gets to the point that everyone’s money is becoming so devalued that interest rates have to be raised more than is comfortable and hike taxes through the roof. Oh, slight issue. We’re already in the tail winds of that very problem.