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MarkGB 

"Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world" - Henry Kissinger

and yet...

"Sooner or later everyone sits down to a banquet of consequences" – Robert Louis Stevenson

Martin Wolf says negative rates are not the fault of central banks. The real culprits can now be revealed

In response to an FT article by Martin Wolf on 12th April 2016, entitled 'Negative rates are not the fault of central banks'

 http://www.ft.com/cms/s/0/9b1d8b04-0007-11e6-ac98-3c15a1aa2e62.html#ixzz45dkwcWlw

There’s nothing for it Mr Wolf, I am forced to admit that you are totally right.

Negative interest rates are not the fault of central banks. Indeed it is churlish to assume that the people who stride the world stage with their optimal control panels should have the slightest degree of control over anything, optimal or otherwise. Clearly they haven’t.

As regards targeting inflation or creating employment it is equally clear that they haven’t got the foggiest idea about any of that either.  They are clueless and therefore blameless. So to hold them accountable for any of that is totally unreasonable of us.

But the biggest injustice of all is to imagine that the people who spend their lives agonising over interest rates, people who rush for a microphone to talk about them every time Ray Dalio sneezes, people who write books about how they saved the world with interest rates and their love child QE…To suggest that those people are responsible for negative rates is just plain wrong…and highly negative by the way.

No, NIRP is the fault of two well known meddlers in human affairs – the tooth fairy and the invisible spaghetti monster.  These are the villains who crept into Alan Greenspan’s study one night in the early nineties and whispered in his ear…'Cheap money makes people borrow and spend…it makes things look good on the surface…the pols like that…don’t worry about paying it back, that’s for another day…'

Yes folks, the invisible spaghetti monster and the tooth fairy have trained a whole generation of Neo-Keynesian Astrologers with Friedman rising and their moon in Krugman…to believe that they are in control of everything but responsible for nothing.

They are the real villains of the piece. Unfortunately they don’t know the least thing about productivity, investment or wealth creation either – their PhD supervisor was Santa Claus and they think it’s all down to him.

So yes Mr Wolf you are right – negative interest rates are not the fault of Central Bankers.

To end on a slightly different note, let me say this:

There is no way in a million years that a free market would EVER result in negative interest rates. They are a man-made contraption, a sign of intellectual as well as monetary bankruptcy, a product of groupthink and hubris. Rationalise as you will, justify as you like – markets don’t DO negative interest rates - idiotic central planners and corruptible politicians create the conditions for them, then implement them, then deny responsibility for them.

Policymaker overboard. Regulator deserts the sinking ship that is Abenomics

The FT Executive Tea Room - the day after Brexit