Thursday, September 24, 2009

"It Was Entirely The Fault Of Mervyn King"

I first heard the phrase "It was entirely the fault of Mervyn King" (Mervyn King, in case you didn't know is the head of the Bank of England) in the satirical conversation by comedians John Bird and John Fortune (with one posing as an interviewer and the other posing as "George Parr, investment banker") that I told you about here.

That was of course an exaggeration. While the policies of the Bank of England certainly contributed to the crisis, it wasn't the only and on a global scale it was a relatively insignificant cause of it (However, for Britain's specific problems, its role was a lot greater). Moreover, Mervyn King isn't the only one in the Bank of England influencing its policies, so the blame should be shared with more people in the Bank of England. But while being from a factual point of view clearly an exaggeration of the kind that is typical of comedians, there was certainly a lot of truth to it. Mervyn King does deserve part of the blame.

In this case, the pound's slide today, the phrase is probably a lot closer to being entirely true. It appears to have been triggered by comments by Mervyn King saying a weak pound is "helpful" for the British economy.

As I noticed last week, the pound has been sliding for some time now. These latest comments are one of the indicators that the slide is mostly or entirely the fault of the Bank of England. Bank of England officials have before tried to talk down the pound, and also matched it in action with their "quantitative easing".


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