The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.
Wow, this seems quite relevant while we’re on the topic of hyperinflation so what exactly is going on here? An article from the Telegraph UK yesterday:
The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet – a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel’s Government in 1844 which originally granted the Bank the sole right to print UK money.
The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority.
However, some have warned that it means: “there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses.”
Although the amount of easing is likely to be limited, news of this increased secrecy will spark comparisons with Weimar Germany and Zimbabwe, where uncontrolled use of the central banks’ printing presses ultimately caused hyperinflation.
The Bank said it will still publish details of its balance sheet, but, significantly, the data – the main indicator of the extent of quantitative easing – will not be presented until more than a month has elapsed. For instance, under the new terms of the law, if the Bank were to have embarked on a policy of quantitative easing last month, the figures on this would not be published until the end of this month.
The reforms, which are likely to be implemented later this year, will make the Bank of England by far the most secretive major central in the world, experts said.
“Quite why the Bank has to keep its operations so shrouded in secrecy is a mystery to me,” said Simon Ward, economist at New Star. “This [reform] will make it much more difficult to track what the Bank is doing.”
Full article: Reform plan raises fears of Bank secrecy
Lack of transparency and accountability is what brought us into this exorbitant financial mess in the first place so I honestly can’t understand their reasoning behind this. When will the general public become fed up with all the secretive schemes before finally declaring, enough is enough?
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