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Fraud*
According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

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Tuesday, February 5, 2013

Mark Carney Will Be Goldman Sachs's Guy in London

Just how does Goldman Sachs influence the policies of government?  In 2011, Goldman economists suggested that additional asset purchases would help the Fed's easing policy.  The Fed did decide to buy $85 billion in assets each month beginning in 2012 when the unemployment rate in the US was 7.8%. This policy is supposed to reduce the unemployment rate  but the unemployment rate has gone up to 7.9% since the implementation. 

Here is Goldman's economist, Jan Hatzius:
"With short-term interest rates near zero and the economy still weak, we believe that the best way for Fed officials to ease policy significantly further would be to target a nominal GDP path such as the one shown in the chart on the right, indicating that they will use additional asset purchases to help bring actual nominal GDP back to trend over time. The case would strengthen further if deflation risks reappeared clearly on the radar screen."  (from Business Insider)
Mark Carney, Governor of the Bank of Canada, takes Goldman's suggestions seriously, having been a Goldmanite himself.  So why would anyone be surprised that he will be taking Goldman's economic ideas from Canada to the Bank of England?  Besides that, Carney now will have additional duties to perform such as supervising the other British banks.  It is so easy to spread Goldman's economic ideas!

Carney set for first taste of Bank of England job
By Paul Waldie - The Globe and Mail
. . . . Committee chairman Andrew Tyrie, a Conservative MP, has made it clear he has reservations about the recently expanded role of the governor, which now includes a supervisory role over London’s financial district along with setting monetary policy. Mr. Tyrie and other committee members have called for more oversight of the central bank, given its additional responsibilities. “We will want to hear what [Mr. Carney] has to say about making sure the bank is equal to the challenge of these new responsibilities,” Mr. Love said.
. . . . 
There will also be plenty of questions about Mr. Carney’s recent statements about whether central banks should scrap inflation targets during extraordinary times and move to a target that includes nominal gross domestic product, or GDP that has not been adjusted for inflation. Economists say targeting to nominal GDP growth would allow for higher inflation when the economy is slow, and lower inflation when the economy is strong. The idea is to try to smooth out the boom-and-bust cycles with an expanded approach, rather than fixating on a specific inflation number.

That kind of change would mark a major shift in policy for the Bank of England, which has followed a strict policy of targeting inflation at 2 per cent. Even the man who appointed Mr. Carney, George Osborne, the Chancellor of the Exchequer, has expressed little interest in the idea, saying inflation targeting has served Britain well. During a speech at the recent World Economic Forum in Davos, Switzerland, Mr. Carney also mused about using “unconventional measures” to kickstart an ailing economy.

Read the rest of the article here

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