Subject: Re: Increasing interest rates and controlling inflation
From: abelard 
Date: Sun, 15 Jul 2007 22:05:44 +0200
Bytes: 3987
Newsgroups: uk.politics.misc uk.finance
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On Sun, 15 Jul 2007 20:44:24 +0100, John Boyle
 wrote:

>In message <01sk93dml857jkigrgs30htsnkb3ii5rb4@4ax.com>, abelard 
> writes
>>>>eg by making banks put more on deposit at the boe..
>>>>there are 3 basic methods
>>>
>>>And when did that happen?
>>
>>i don't have historic data on file....
>>why not use the boe site or otherwise should you care
>
>My point is that it hasnt happened under the current application of 
>'monetarism' as the way to control the economy. You seemed so confident 
>I thought I had missed something, hence my request to you to tell me 
>when. I dont need to look again at the BoE site.

so far your posts just look like red herrings to me....
i was not originally referring to when the mechanisms were applied
    not the directions of those application..

>>.interest rates are modified
>>     by controlling money supply.....
>
>This is the crux or our discussion. I maintain that money supply is 
>controlled by interest rates. You contend that interest rate are 
>controlled by money supply. My contention is the fundamental belief of 
>post Freidman monetarists, championed in Government primarily by 
>Thatcher and that principle still applies.
>
>I fully understand your theory, which would work if it were to be used. 
>The fact is, though, that it isnt being used.

it isn't 'theory'...it is mechanism

>Having said that, there is some degree of BoE control over the Banking 
>system in which (AIUI) they have asked for increased deposits, but the 
>purpose for those request were not for the purpose of controlling the 
>economy or the supply of money, they were requested as part of their 
>(then) supervision of the UK Banking system. This control is now passed 
>to the FSA.

it doesn't matter which arm of the government fills in which forms

increased deposits automatically restrict money supply.....
unless it is sterilised elsewhere

-- 
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