February 9th, 2011

Government Official Loses Bet on the Economy

This time last year an economist wonk at the liberal-leaning CentreForum took a dislike to Guido’s economic foresight. Deficit denying Liberal Conspiracy made a predictably over the top attempt at playing up the difference of opinion calling Guido innumerate, an allegation later quietly withdrawn.

Subsequently a wager was drawn up with the Freethinking Economist Giles Wilkes: a book of the loser’s choice would be sent to the winner. After a year of month-after-month of above target inflation announcements by the Bank of England, Giles, a good sport and former bookie, has decided to admit early that deflation just isn’t going to happen. In fact the realisation is becoming mainstream that the danger is quite the opposite, as Guido has long pointed out, of runaway inflation resulting from QE. Inflation is always and everywhere a monetary phenomenon. Guido doesn’t want to worry anyone, but Mr Wilkes is now Vince Cable’s Special Advisor…


138 Comments

  1. 1
    Billy Bowden is the greatest umpire ever ! says:

    Hang the fucker!

    Like

  2. 2
    chunky munky says:

    i am a spaz and I know inflation is here to stay

    Like

    • 34
      Ireland's Own says:

      The only thing going up faster than prices for the retarded, useless eater Brits is Gayboy Fawker’s cock when he sees the next banker’s arse to lick. Have you not fucked off out of Ireland yet, you fat odious wanker?

      Like

    • 51
      Double Dip says:

      Let sunshine win the day!

      Then Osborne will have to find another excuse.

      Like

  3. 4
    Tachybaptus says:

    Guido, be sure to ask for a Gutenberg Bible. Then sell it.

    Like

  4. 5
    BBC Controller says:

    Note to all news producers. When reporting on cuts to local authority budgets always stress front line services. Do not talk about waste, inefficiency and bureaucracy.

    Like

  5. 6
    Billy Bowden is the greatest umpire ever ! says:

    What was the bet Cash ? I hope he doesnt put on expenses…..

    Like

    • 8
      Billy Bowden is the greatest umpire ever ! says:

      Oh i just re-read , Still i hope he doesnt put the book on expenses.

      Like

  6. 7

    O/T but Ed’s got to be worried he’ll share Harryy’s fate:

    http://www.msnbc.msn.com/id/41480994/ns/us_news-weird_news/?gt1=43001

    Like

  7. 9
    Gordon Brown says:

    The choice of book just has to be “Beyond the Crash”

    Like

  8. 10
    Anonymous says:

    Note the illiterate yob’s comma in the LC headline.

    Like

  9. 11
    Martin Flatters says:

    It’s self evident that loose monetary policy will lead to higher inflation. QE is just an extension of monetary policy when interest rates are practically zero. QE was entirely appropriate when we were facing economic meltdown and the base rate was reduced to 0.5%.
    Going forward there is a case for small increases in the base rate as long as it is viewed it will not choke off the recovery. The priority in the medium term is to reduce the deficit and through economic grown reduce the debt/GDP ratio. This is a higher priority than inflation.

    Like

    • 33
      Engineer says:

      Wrong. Inflation is evil – as anybody who lived through the ’70s and early ’80s will tell you. It attacks the most vulnerable in society most – pensioners living on fixed incomes, for example, and it erodes peoples’ savings.

      Like

      • 54
        stevep says:

        correct use of apostrophes for decades. don’t often see that, well done.

        Like

      • 56
        Mike Hunt says:

        And with pensions for anyone who doesn’t work for the state being continually eroded and annuities worth next to fuck all, inflation is really something to be feared.

        All stupidly low interest rates are doing at the moment are protecting the feckless fools who borrowed way beyond their means from defaulting.

        Like

        • 128
          Ain't worth the paper it's printed on says:

          and filling the gaping holes in bank balance sheets by the tax on credit balances of savers through engineered inflation

          ie THEFT

          Like

      • 66
        Martin Flatters says:

        I agree that inflation is bad but the priority at the moment is the deficit and sustaining the economic recovery. As I said, small increases in interest rates may be justified as long as they don’t affect the recovery.

        Like

      • 71
        The consequences of printing money says:

        Inflation is theft !

        Like

    • 65
      sockpuppet #4 says:

      Is that you Jonty?

      QE was a tax on anyone holding sterling.
      So perhaps you do want to tax people who have money or belongings valued in sterling, but it reduces people’s faith in how worthwhile it is to save, or to invest in the UK economy.

      Oh, and that money that was taxed from savers (ie printed), did it actually get “invested” (I’ll let you define that in any way you like), or just go into paying off old debts of the government.

      Like

  10. 13
    Trinny says:

    How do these people get these jobs?

    I want to be a special adviser.

    Where do I sign up?

    Like

  11. 14
    Sophie says:

    Vince Cables “special advisor”?

    Is that the new name for a male nurse who wipes your bum in a care home when you get really old & confused?

    Like

  12. 15
    MI5 says:

    “Overheard @DenisMacshane saying “Joan is leaving me and I’m going to jail”.
    2:46 AM Feb 7th via The Visitor Widget”

    It’s looking good friends…

    Like

  13. 19
    Jack says:

    The Business Dpartment should be abolished…huge savings…

    Do you honestly think ANY business man would listen to Vince the Gaffe
    Cable and his SPAD ??

    Like

    • 57
      Hugh Janus says:

      This bumbling and seriously misguided old fool, who lusted after power for so many years, was happy to make frequent pronouncements from the safety of the sidelines. But when he achieved high office (God knows how) he was totally out of his depth. He really is a pitiful figure now. In many years I can’t recall any politician, even those mendacious cretins in NuLiebour, who would ever have been so stupid as to consider voting against a bill that they themselves were taking through Parliament. As for his ridiculous outburst against Murdoch….

      The fact that he’s still there is truly the 8th wonder of the world.

      Like

      • 117
        There's no fool like an old fool says:

        He was trying to impress the Telegraph girlies, Huge…especially when they laughed at his jokes.

        Like

  14. 22
    Grumpy Old Man says:

    Guido. If you haven’t yet asked for the book of your choice, may I direct your attention towards Mark Skousan’s “The Making of Modern Economics” It invariably leads to complete recovery from an attack of Neo-Classical Endogeonous Growth Theory, or Balls Syndrome as it is otherwise known.

    Like

    • 38
      Cynical-old-bag says:

      Or for a little light reading, how about Stephen Hawkings’ A Brief History of Time.

      Like

    • 41
      Dennis the Menace says:

      This years Beano Annual is just as good a read.

      Like

    • 44
      Gordon Brown says:

      if Guido is going to get a book , Then may i recomend ” Wieghtwatchers , Diets of the year” :-)

      Like

    • 95
      Engineer says:

      Some years ago, a competition was held at a book fair for the funniest title. The winner was ‘Foundrywork for the Amateur’. How about that one? It would keep the Fawkettes out of mischief for a while.

      Like

    • 121
      AC1 says:

      As far as I can make out, Post Neo-Classical Endogenous Growth Theory, seems to boil down to an excuse.

      Tax the Shit out of every exchange cos magic “innovation” will mean the economy isn’t f**ked.
      The economy, as everyone with an ounce of common sense knows, does not work this way.

      Like

  15. 28
    Gordon Brown says:

    I’ve got a pet woodlouse.

    It lives in my hair.

    He is my best friend.

    Like

  16. 31
    Anonymous says:

    In post Soviet Russia, inflation was definitely not a monetary phenomenon…

    Like

  17. 32
    Anonymous says:

    At least the story is about the boy and not his father

    Still not apologising for the filthy slobish article last week are you Guido

    Were you pissed or cocked up or just having an off day ?

    Like

  18. 35
    Cynical-old-bag says:

    That’s just what we all need.

    Someone else in denial.

    Like

  19. 37
    Gordon Brown says:

    Do you still hate me Guido?

    Like

  20. 48
    Clamity Clarke says:

    Guido you are not innumerate !!!

    You are an apologist whom is also innumerate.

    My other fav Guido prediction, earlier this year… “Coulson to stay put”…as Guido put it …LOL

    Like

    • 106
      Club Soda says:

      Its very bad form to use lol, here.
      Even worse to use capitol letters, LOL.

      If you’d have used an exclamation mark the ‘Windows Club’ would have been forced to ask for your membership.

      This isn’t Facebook.
      There are standards to adhere to.

      Very low ones admittedly, but nevertheless.

      Like

  21. 53
    John Major's Face Full of Curry says:

    I recommend a spicy curry clam to warm up the economy.

    Oh yes!

    Like

  22. 55
    Ed Balls says:

    So what!

    Like

  23. 58
    Ed Miliband run over my cat says:

    And the cat never stood a chance….

    Like

  24. 60
    sockpuppet #4 says:

    Here’s what I want to know for folks who are always right:
    About 2-3 years ago, the pound dropped like a brick. But prices of goods made abroad didn’t immediately go through the roof. (presumably shops had £ based deals, had stock, cut profits).

    How long does it take for a drop in sterling to become inflation?

    A couple of months ago there were “factors from outside the uk” making inflation go up. one of these being that their currencies didnt devalue as much as sterling.

    Like

  25. 62
    Tom Baldwin says:

    You will never make me go to rehab , I say no no no…

    Like

  26. 63
    Gideon Osboobery says:

    It’s not inflation we have to worry about.
    It’s the cold weather freezing all the pound coins that’s causing all the trouble.

    Like

  27. 64
    William Hague says:

    ‘appen my Spad is an expert on inflating my bell end, ba goom!

    Like

  28. 69
    Mr Natural says:

    Enoch was right about inflation as well.

    Governments, and their attendant host of commentators and propagandists, have executed what is perhaps the greatest confidence trick of all time, a confidence trick on a gigantic scale: they have caused inflation year after year, and at the same time persuaded everyone that somebody else was to blame. It is equivalent to stealing a man’s wallet and then getting him locked up for theft.

    Speech at Chippenham, 11 May 1968.

    Like

  29. 70
    Gordon Brown says:

    I was ok until I ate those Flumps

    Like

  30. 72

    Good call Guido! I had my doubts.

    Like

  31. 73
    D Draper says:

    Anyone lend me a tenner?

    Like

  32. 75
    String emUp says:

    Way back in Maggie’s day the fight was against inflation , now we have the deficit. If I remember correctly it was one Mr Anthony barber who kicked off the worst inflation in the early seventies with a printing lots of money budget. Then Wislon got back in and continued the fine work ending up with banana republic style inflation. Wislon had by then gone and the hapless Callaghan was PM. Maggie got in and railed against inflation , brought in her cutbacks and then unemployment really went up. It was always us , the people , who caused inflation because we were so greedy. Never was it anything to do with any government. Then we were suddenly blessed with the BoE and its inflation target. Now if goverments are not responsible for inflation , how can they target certain rates of it. Don’t make sense to me unless they have been lying to us. They wouldn’t do that would they ?

    Like

  33. 76
    Clamity Clarke says:

    Seems Guido “The Patsy” has been prompted to big up the “inflationary pressure” line.

    Tory HQ been on to him

    Remit: Disseminate negative stories about inflation and its economic impact – try to shift blame – present case for measures to counter Inflation.

    *** To you and me *** Interests rates are about to rise.

    Like

    • 84

      No, they are not. But they really should.
      Having negative interest rates isn’t very sustainable.

      but there’s still plenty of time. Japan has been stagnant for 20 years and are only just being made to pay aa2 rates.

      If only we had some well built cars and tiny DVD cameras to flog abroad.

      Like

      • 102
        Engineer says:

        If it was economically viable to employ people in this country, we’d have a positive balance of payments. Labour costs, and the costs of meeting myriad regulations, are stifling growth.

        Like

        • 111

          Someday someone will figure out that 5 million employed, even on a low rate of pay, are more productive than 5 million watching Homes under the Hammer.
          IDS seems to have grasped it. Sadly about 30 years too late.

          Even better, 100,000 watching Escape to the Country, instead of being employed by the council demanding business rates far beyond the ability of a small business to generate them would create 500,000 jobs.

          Like

        • 127
          Hugh Janus says:

          “Labour costs, and the costs of meeting myriad regulations, are stifling growth.”

          Liebour certainly did cost – our prosperity and our reputation.

          Like

  34. 77

    I would like to see more quantitative sleazing!

    Like

  35. 79
    sockpuppet #4 says:

    Something I’ve been wondering about:
    About 2-3 years ago, the pound dropped like a brick. But katie-pr****ces of goods made abroad didn’t immediately go through the roof. (presumably shops had £ based deals, had stock, cut profits).

    How long does it take for a drop in sterling to become inflation?

    A couple of months ago there were “factors from outside the uk” making inflation go up. one of these being that their currencies didnt devalue as much as sterling.

    Like

  36. 82
    Homosexual Muslim says:

    Hello boys.

    Like

  37. 88
    annnnoyperson says:

    Special… as in what sense of the word?

    Like

  38. 89
    Vaguely Gay says:

    “Guido doesn’t want to worry anyone, but Mr Wilkes is now Vince Cable’s Special Advisor…”

    He seems like a nice boy.

    Like

  39. 90
    Disco Biscuit says:

    Yes but what book did you get?

    Like

  40. 92
    Homosexual Muslim says:

    Does anyone want to do me up my back allah?

    Like

  41. 94
    Anonymong OE says:

    Actually you are both wrong and both right – we’re in a biflation world now, but don’t worry yourself about it. Continue having the political squabbles while those of us in the know profit on the misery.

    Like

  42. 118
    Gordon Brown says:

    Ha, ha, ha it’s Monday.

    Like

  43. 120
    Paul Marks says:

    Mr Wilkes and “Uncle Vince” Cable seem made for each other – someone should get them a room.

    More seriously – when is Mr Cable going to be sacked? To have this nasty little collectivist as “Business Secretary” is absurd.

    Of course the department he heads should also be abolished.

    Like

  44. 122
    Sludge Pump says:

    Could somebody please explain the reason for ‘ Special Advisors’? Surely Vince Cable and the rest of the Cabinet members must be proficient at the positions they are undertaking in running the country? They each have an army of Civil Servants, supposedly well versed and trained in the relevant departments specifically designed to guide them? In the real world, unless of course you are positioned via ‘The Old Boy Network’ it is expected that when undertaking a position one would have some relevant experience in the field for which you’re being employed. This is obviously not the case when running a country as it appears that any individual regardless of ability and knowledge has a divine right the fuck up and not be held responsible or to account. This probably just why Brown and Blair are still running free and Balls has been promoted and the coalition is struggling.

    Like

    • 130
      Old geezer says:

      Special advisors are there to tell them what they want to hear, because the civil service will only tell them what they ought to hear.

      Like

  45. 131
    tory boys never grow up says:

    Perhaps Guido should read the sentence following that to which he links on the Adam Smith website – and then look at what has happened to overall money supply figures despite quantitative easing. He might then realise that something else other than money supply has an impact on inflation. Even Thatcher eventually stopped believing such monetarist garbage.

    Like

    • 133

      There are plenty of factors which cause inflation and deflation, but ultimately supply and demand will out, even money itself is subject to the fundamental rules of market economics.

      Like

  46. 132
    tory boys never grow up says:

    I wouldn’t worry about who is and who isn’t special adviser to Vince Cable since it is becoming increasingly clear that his role is not to have any impact on Government policy but merely to help deliver the votes of gullible LibDem MPs. Well at least Lord Oakeshott has now figured this out – although it seems to have put an end to my career as his unpaid special adviser

    http://www.libdemvoice.org/lord-oakeshott-bob-diamond-22952.html

    Like

  47. 137

    He called you innumerate, you should have called him illiterate.

    The headline in your image “Guido Fawkes’ is confused and wrong…” does not require an apostophe after Fawkes.

    Like


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cynic says:

Can anyone help me? I went on holiday a week ago and returned to find someone has pulled out the stake and Gordon Brown is back and acting as Prime Minister. What did I miss? Has there been a snap election?


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