Man in a Shed: The Dollar in your pocket

Monday, November 12, 2007

The Dollar in your pocket

Is history repeating itself ? Compare these two quotes, one from the former UK Labour prime minister Wilson and the other from Ben Bernanke chairman of the US Fed .

First Harold Wilson, 1967 ( on the occasion of the humiliating devaluation by the Labour government of Sterling).

It does not mean that the pound here in Britain, in your pocket, in your purse of bank has been devalued

Now Ben Bernanke , 2007. ( on the sliding of the dollar on international exchanges - in effect a large devaluation of the US currency).

We are going to make sure that the inflationary impact that may come from a weakening dollar is not passed into broader prices

Can anyone spot the common thread here ?

Man in a Shed thinks its the low opinion of their audience that both Wilson and Bernanke must have shared to hope to get away with such ridiculous statements.

It is also the shock wave that is travelling towards the only slowly awakening US citizens and still sleepy subjects of Her Majesty in the UK ( not least the out of his depth Alistair Darling, Gordon Brown's puppet as Chancellor of the Exchequer ).

You would think we were all wiser by now ...

MiaS can't help thinking the US is just over stretched just now, just as the British Empire once was. Still we are some time off a US Suez moment, but its now not impossible to imagine one.

1 comment:

Anonymous said...: The US economy is sitting on top of a very steep hill and is starting to tip. If their economy goes, so does the world economy, and so does Gordon Brown's reign as PM.; 7:54 am

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The pound in your pocket

"We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists." James Callaghan

“The trouble with theoretical economists is that they don't understand that when you have a deficit, you can only finance it by borrowing, and you've got to persuade people that it's worth lending money to you and that they'll get their money back... there's no way of escaping it.” Dennis Healey during the 1976 Stirling Crisis.

"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens ... Lenin was certainly right. There is no subtler, no surer means of over-turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." John Maynard Keynes, 1920.

"To preserve [the people's] independence, we must not let our rulers load us with perpetual debt. We must make our selection between economy and liberty, or profusion and servitude." Thomas Jefferson, President of the United States of America,1801-1809.

Inflation is taxation without legislation .. Milton Friedman