22
Oct
What a drab man!
The drama and the crisis that haunted the global economy for the
last number of weeks appears to be having some settling effect.
That is of course unless you study the volatility of the stock
market, but the question is, does the Stock market these days
reflect in anyway what is happening in the 'real' economy? If we
are to believe the Governor of the Bank of England in his recent
address to business then the banking centre should start to
stabilise, the Libor rate is in decline and a nervous confidence
looks as if it is being restored to the financial sector. His
suggestion not mine. In the October meeting of the MPC there was a
9 to 0 vote for interest rate reductions which is likely to be
hotly pursued by further, and perhaps more aggressive, rate cuts
over the coming weeks and months with many pundits forecasting that
we might start 2009 with rates as low as 3.5%. That will be matched
by the decline in inflation which once again according to Mervyn
King, our beloved Governor of the Bank of England could fall as low
as 1% by summer of next year. This curiously enough, or even
inexplicably, would trigger a letter from the Governor to the PM as
to why inflation has fallen below government target. I am quite
surprised that there is any need for an explanation but it gives
them something to do rather than worrying the public all the time.
Lets face it, for some considerable time now all the forecasters,
all the analyst and economists completely and utterly got it wrong
and should, in my view, be publicly flogged and hung out to dry.
Many of course have thrown in the towel or had it thrown in for
them. Others, will no doubt keep their head well below the parapet
but what is to become of Mr Mervyn King? In his usual negative,
pessimistic and very wimpish way, first of all he did not see it
coming at all, then when he did he was over cautious and acted too
late and now, despite the fact that he clearly deep down believes
that we will enter a period of a shallow recession, he has not got
the confidence or strength of character to pronounce this
publically and remove the cloud of misery that hangs over the UK.
He and many of his like are born pessimists and it is so often said
the only good thing about being a pessimist is that one day you
will be right. DICTATED BY GRAHAM EVANS, MANAGING DIRECTOR,
PENYARDS COUNTRY PROPERTIES 22.10.2008