The Bottom Line: Playing the long game

a good businessman at that age would eat the first biscuit before "borrowing" another from his brother!....

This may have been true once, but not anymore. The bailouts made it pretty clear that the business world is led by take-the-money-and-run executives who know they'll be gone when the chickens come home to roost.

The economy punishes savers and rewards the irresponsible.

In today's economic atmosphere, a bird in the hand is worth two in the bush. Take the cookie and invest it in another immediate return. Chances are the baker will file bankruptcy and incorporate a new bakery (free of cookie debts) before it's time to collect the two.

The long game is a good one providing a Government can be trusted not to retrospectivily impose taxation on your initial cookie. I'll take my cookie now before the emergency budget thanks. Actually, I've just looked in the cookie tin and its empty anyway. As for Sir Terry, top man and spot on timing to get out whilst you're winning.

If the small child eats the cookie, steals the cookies from those children who decided to eat them later, eats all the cookies, pukes up all over the place and then blames the other kids for the mess they've created, its a pretty good sign their going to end up voting New Labour.

IF THE CHILD GAVE THE COOKIE TO SOMEONE WHO NEEDED IT[STARVING OF THE WORLD]HE WOULD NOT B OVER WEIGHT [BE HEALTHY] ITS BETTER 2 GIVE AND HE OR SHE WOULD FEEL BETTER NOT LIKE SOME PEOPLE WE WHO R AROUND AT THE MOMENT?

Whoops, ya should'n'a posted that one, Steffie! Please, no more posts, close this now in case I fall off my chair laughing and drop my supper all over the cat.

Don’t forget that this is Britain in the 10’s, by the time he got to eat his two biscuits they would have been reduced in size to half the original biscuit and he would have to give half of his biscuits to his brother who ate his biscuit a long time ago. Simple business logic went out the window when Gordon changed the meaning of the word Prudent.

As the Dad of a 3 year-old I'm surprised you used that analogy, Stephanie.

My daughter would eat the cookie then badger me for another one later anyway!

What intelligent readers you have Stephanie

I saved my cookies in a jar, to plan for my picnic at the end of the week

Unfortunately, a big Brown Bear, let's call him Gordon, came along, and took them all
Something about a CGT...Crazy Gordon Tax

In fact, in place of my cookies, he left a bill!

I know owe £158bn

Re 4: superb!

Hi Steffie,

You look a bit severe in your portrait photo on your Blog. Please can we have a picture to replace it, taken while you read the replies to this particular blog.

It will mak everyone's day, every day.

158 billion cookies down.

Our children are going to go hungry for a long time, being forced to save their cookies but this time with no promise of later returns.
What will they do then?

Anyone else have any further extensions to the metaphor?

Oh what to do - eat the cookie and survive until tomorrow? or starve now and hope there is a feast tomorrow and that I haven't starved to death waiting for the said feast?

My child wanted some school milk with her cookie. Maggie snatched it away. Now Gideon and Camelot are going to take the cookie away and leave her with a double dip instead. Their rich pals will be dining out on taper relief so they'll not starve.

"Give a small child a cookie. Tell him he can eat it now or get two cookies later, if he can manage to hold off. "

I tried it on my four year old son. He stared intensely at me and then with a stern, sudden retort: "That's a false dichotomy, dad." He looked both angry and disgusted, as though he couldn't work out if I was being surreptitious or stupid. "Just give me the whole jar, or I'll tell mum about Tatjana, and never ask me anything like that again, please, you insult my intelligence and embarass yourself" he said.

Should the child not be asked to fill out a 12 page form asking such questions as whether he has any cookies stashed away in a jar or any other confectionary items. Should the child admit to 'saving' a large stash, he should be forced to hand them over to those less fortunate than him and then be given a lecture on how selfish he is.

The moral of the story is, eat, drink, and be merry, for you never when an anti-aspirational Labour government might get in power and destroy the incentive to save through needless meddling and labyrinthic means tested benefits.

The problem with this analogy is that many correspondents do not understand the fabulous nature of the story but prefer to use it to reflect their own prejudices.
Expecting a guaranteed return in the form of interest without risk leads us to 0.5% interest rates.
Wanting 100% guarantees leads to massive defecits.
Risk it all in one toss ......and you`ll be a man my son
In a perfect world we would all have a cookie now and a cookie later.
In a perfect world the story exists only as a parable.

18

I am not prejudiced...

You DO realise that the £158,000,000,000 deficit is real, and not part of the cookie tale don't you?

Coalition government for a month and what do we get? Poor kids facing a crippling cookie shortage.

Well under the previous government the children wouldn't have been short of any cookies.

Mervyn King the central Baker would have produced more dough (QE) so even more cookies could be baked for everyone.

Cookie gap filled and problem sorted.

20

Very good

I'd prefer to take the one cookie you don't actually have right away, rather than wait for the two cookies you don't have either.
At least the dissapointment will be shorter lived

I would take the cookie on offer and add 2/3 of worthless cake to it, repackage it up as three cookies and sell them onto a bankers kid telling him they are cheap as chips,go back to the counter and buy another and keep on doing this until I have more cookies than I can manage to eat between me and my friends.

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I see no problem with the use of the cookie allegory, after all Ms Flanders is he father's daughter! A hippopotamus might provide a fun economic allegory, or even the gas-man cometh. Come on Stephanie revive some of your father's comic songs.

I used to give my children immaginairy sweets when I returned home after being away for weeks,withholding an immaginairy sweet due to reports of bad behaviour always lead to tears.

Feeat currency is the modern basis for non eggsistent wealth for the grown up skidderrs that wish to save their bald patch tiers for a rainy day when it will all disappear into the ditch in the twinkling of an eye.

With feeat currency the choice is between one imaginary cookie now[in exchange for a real one} or two imaginary cookies later which begs the question "will there still be a demand for imaginary cookies later" when there are two of them ...or should i say seven cookies when one includes the extra cookies conjoured into existence to pay the imaginairy cookie factory bosses for their hard work swaning arround the med consuming their "real" cookie before it crumbles .


LOL

It would not have been possible without AAAdolt edukation

One day my son, all these imagiAAAiry cookies will be yours...TO GIVE TO THE TOOTH FAIRY,PROVIDING THOSE SCALEY WAG BLIGHTERS OVER PAID TO LOOK AFTER THEM DONT EAT THEM, IF SUCH A THING STILL BE POSSIBLE.

Why are we forcing our kids to eat cookies (I assume you mean biscuits) anyway. What's wrong with healthy stuff?

Er, Cookies? What are they?

Gosh, your career must be importsant to you ;-)

God the world depresses me..clearly I was not cut out for a career in business.

(eats a cookie)

Fiat currantsee is non eggsistenchall wealth for those that refuse to accept that the yoke is on them.

The world is made up of three types

Cookiees , cookerrs and those that fly over their nest claiming "springk has arrived"

A child with any kind of business acumen at that age would break the cookie into 8 equal parts. He would then trade these cookie 'derivatives' to other children on the basis that the children would each give him one whole cookie back in a week. Rather than wait a week he would then find another child and promise to give them the 8 cookies next week if they can get 5 cookies now.

The Asset Backed Cookie (ABC) has now netted a nice return but... Alas, the kid waiting for his 8 cookies ends up getting nothing due to the supermarket putting the price of cookies up and parents not being able to afford them.

Holding back cookies? Isn't that just grainal retention? (sorry). Seems to me the kid's more likely to become a sociopath than an entrepreneur!
Also, what if he decides to up the ante on your offer of two cookies a bit later on, in favour of ten cookies a lot later on. Say he keeps on doing this over time. In the middle of the night you might end up eating from the built up stash of cookies that you don't really own. One day he calls in cookies owed and suddenly you're in massive cookie debt, and yep your kid might be the new Richard Branson of the buscuit world, but without any cookie liquidity what use is that to anyone?

"Why are we forcing our kids to eat cookies (I assume you mean biscuits) anyway. What's wrong with healthy stuff?"

Since when did anyone have to force kids to eat cookies?

Cookie? I would not have known what she meant. We British didn't have cookies 50 ish years ago.

Slightly older I would have looked and thought she was playing games - even later I would have used the phrase 'Mind Game'

where i come from the child would have stolen the cookies from the local shop, then sold them to the fat kid school; using the profit from that sale bought an 18 rated video game seeing how the grown ups do it properly....

Our hands are soiled as they have been in the cookie jar too often and in any case are now becoming fed up of cookies.

Surely the business child would have discussed cookie supply over a longer period, demanded a better price, ensured pricing at a fixed exchange rate, and then when the supply sufficiently guaranteed, sold the first cookie at roughly double to triple the purchase price out of a carboard box to folk who didn't know a cookie from a biscuit.

The profit would purchase two cookies, sold again until the cookie profits mounted up so much that you would end up developing a Value Range and an Extra Special Range and take £1 in every £8 (or is it 7) from everyone in your country. When reaching this exalted position you would resign, leave the cookie crumbs for the next CEO and head off to the Bahamas wondering how you had managed to make quite so much just because you don't like cookies and sold the first one you were offered.

Sadly for us the cookies are all imported because mostly we couldn't be bothered to make them ourselves because we needed too much money to buy our own cookies.

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Reluctantly handing back the cookie, the kid gets on with life but finds taking out the garbage, tidying their room, hoovering the lounge and laying the table for supper is so distracting for the parent that the cookie jar is forgotten. Reasonably expecting the two cookies, and possibly as a bonus for all the household effort - all the little chocolate chips and crumbs left from previous cookies - the child is very upset.

The child reasons that he/she is relatively powerless in this situation and goes to their room to ponder this and find a solution.

More on this later ...

It's a beautiful day .. hey .. let's be careful out there today .. especially the England soccer team ..

This one could run and run ..

(Remember, England team, running is not enough - it's the goals in regular time that count most)

[Now Steffie, if you want to run another blog and get the most thoughtful and humourous posts on the BBC site, how about a soccer analogy ... ?]

This comment was removed because the moderators found it broke the house rules. Explain.

This comment was removed because the moderators found it broke the house rules. Explain.

John from Hendon

Do you still make your offensive accusations and deny what you have posted?

112. At 11:28am on 09 Jun 2010, John_from_Hendon wrote:
#99. newblogger wrote:

"Why can't we fully nationalize RBS and LLoyds?"

If we did the liabilities of these banks would be seen part of the public debt. They as our public debt would be the worst in the World we would be lucky if we had a B- credit rating. Then our interest rates would be forced up to 10 % to 15%. The economy would immediately collapse along with sterling.

Rather like a country having a personal debt problem akin to KevinB's (and the others who want debt forgiveness) - we would be bust. The IMF would then step in and we would be forced to sell the banks in a fire sale, unemployment might go up to 20 or 25%, end of the NHS, end of the state pension and an end to all social security payments - and the City of London would declare independence!

So we dare not even mention hanging on to the banks!

You need to face up to the lies you have posted
complain about this comment

I guess it comes down to the dividend potential of the chocolate chip coporations. Boom Boom.

Re 36. Not only were they called biscuits 50 years ago, they were also larger and had no artificial ingredients. One biscuit provided an entirely satisfying meal with no need to wait for a second

Are/will biscuits be liable for VAT?

Wouldn't it be misleading to the child if they had to endure the torment of saving that cookie and then discovered at a later date
that the parent had all the time been in the kitchen quantitive easing (cooking more cookies) and handing them to other children who had
decided not to defer their gratification ?

More to the point, wouldn't it be abuse of parental power ?

Is this kid cookie enabled then

45

Nope, cookie same size, you were smaller. No additives labelling then just 'others'.

I am inspired to start a biscuit bank in my local High Street. I am going to accept a biscuit from a depositor. After a year I am going to give the biscuit depositor one half of one percent or one two hundredth of a biscuit in return. In the meantime I will tell the world that I have eight biscuits available to lend. I will print bits of paper representing eight biscuits (I'm pretty sure the biscuit depositor will not ask for his biscuit back until a year is up so no one will know I actually dont have eight biscuits. Of course if he does then, like Northern Rock I am in dead trouble, but never mind, you have to take some risks in life) I will expect borrowers to pay me 12 1/2% or one eighth of a biscuit at the end of the year for the privilege of borrowing one of the eight biscuits.
I will now be earning two hundred times as much biscuit interest as I am paying out. If I cant become a biscuit billionaire after a few years then I must be as incompetent as RBS or Lloyds.

48

Nice one....

Are you serious? Most people I've worked for are just a bunch of greedy short-termists concerned about bonuses for next quarter ONLY. Even if their decisions mean running their companies into the ground at a point in the future, most would still rather have jam today and no bread tomorrow.

I think you have over-estimated out business class. Look to the Chinese or Japanese to see what true long term planning looks like.

Are they regular cookies, like they eat in the military in downtown Scunthorpe?

Nowadays we eat the cookies then blame the goverment for letting us, a little look in the mirror might help

Great story in the FT today. Almost made it worth the £2.50.

Those smart investors who are getting into Gold are finding out that storage charges are based on a percentage of its value. Not only that but who does the storing ? You guessed it. The banks.

Wont be long before they start thinking a reserve asset ratio might be a good idea. I mean whats the point of letting it just sit there.
Oh yes and it's so difficult to move around why don't we just start giving promissory notes when we trade it instead of the actual bullion?

Sound familiar?

The analysis overlooks the most important factor in their development ... nearly all of them have a 'golden ladder' ... and many start about a third to half way up the 'golden ladder'.

Interesting metaphor to explore - biscuits are the product here but hey what if the child does not much like them? I have two children one eats them ad nauseam if allowed the other is simply not interested. That's only a 50% positive in my small sample but from parents I speak to dislike of sweets/chips/chocolate seems to be less uncommon tha tit used to be (or are our children less conformist and more confident to express their own choices?) The relevant point for economists here is surely to do with 'know your customer' before you make a pitch...

keep both cookies and only eat the chocolate bits, finish the chocy bits on one then rotate, making the one with no chocy bits your main cookie and have tax payers pay to replace/repair it.

The only people sure to make money out of the cookies are the supermarkets, and all it takes is one delkivery lorry to break down for your local supermarket to run out.

(I used to be a Conservative. I used to grow the wheat which made the flour that went into the cookies. I'm not a Conservative any more.)

There is no evidence that children who are good at delayed gratification go in for business. In fact the antics of investment bankers especially suggest they can't delay gratification for one nanosecond. I did a doctorate in child psychology and when I wrote my book Fear Greed and Panic (Wiley) commented on the fact that excellent economics know very little about psychology. Sadly the cookie comment shows just that.

Freud, see my The Escape of Sigmund Freud (JR Books) claimed hoarding faeces led to obsession with money. He has no evidence for that either.

David Cohen

Oh to be in England, now that Cookies here...

I think we would all take the cookie now, and we will teach our children to do the same. When they are our age there will be nothing left. The worst is still to come, and to all you Labour, Brownites or Blairites, they caused this through absolute recklessness with the economy and borrowing, Tony Blair knew this would happen, hence the reason he fled the nest with the cookie jar full. Brown emptied the Jar and the Banks of gold reserves to try to cover up the impending problem. I sold my property back in 2007 because i knew that the false increase in both house prices and the ease of borrowing would not be sustainable for the future. We will be paying for this mis-management for generations to come. Eat your cookie now, because the promise of further economic nutrition is as far away as Blair and his cookie jar

43. At 09:07am on 12 Jun 2010, Kevinb wrote:
John from Hendon

Do you still make your offensive accusations and deny what you have posted?


Ever thought about bringing back the Spanish Inquisition. You can then subject JFH to torture by 'comfy cushion'.


Euro, world number 2 currency, still going strong. Nicely devalued to help Gereman exports.

Not really a question any more as to whether we join, more a question of will they have us.

More and more data coming out on the UK economy paints a gloomier and gloomier picture. Only possible short/medium term solution would be a consumer boom which unfortunately comes under the category of 'digging an even bigger hole'.

On the sunny side I tip England to win the World Cup. No, I don't support them and only watch for the cringe factor (usually spoilt underperforming super stars). Twust me on this one.

I am getting the impression that whatever you write you will get comment from the blog junkies.....OK I am one a bit as well.

Is cookies not another Americanism.

Very apt. Who ate all the cookies, who 'parcelled cookie debt' and spread it all over the world as 'toxic cookie derivatives'.

Stick to Croissants.

my (slightly) more complicated analogy would be offer a child a cookie and if he eats it, the rest of the packet and everything else in the cupboard then blackmails his parents with nudie photo's of him/herself for lipo-suction and a life time supply of cookies then he's suited for business.

If you sell cookies you don't yet have, is that called shortbread?

If the child ignores the cookies, is that because of a low rate of interest?

Have a tax break. Have a Kit Kat.

The child needs to realise they own the means of production (mum) then create demand (eat the cookies) and scarcity. Other children will want cookies too (as they always want what other kid have), then the child just has to trade cookies for profit (toys, chocolate etc).

If that child started up several cookie ventures, would that make him a cereal entrepreneur?

Sorry, all. Must be the combination of wine and heat. And biscuits.

whatever happened to biscuits, or are we all in pall to USA now

The child that grabs the cookie and eats it and then runs off to do something else won't end up like the stolid one who sits patiently and waits and gets another one and eats two cookies: fat.

Also, can't the "long game" can be lost too?

What matters is if you borrow someone else's cash to gamble on the biscuit. You drive up the price of the biscuit, you don't make any biscuits, and you increase the debt level. The end result is GDP flat, debt up.

The new Labour child would eat the cookie, then claim a breach of human rights under EU legislation that you were withholding the next cookie, and that this could lead to a double dip hunger pang and it would be essential for the country that you borrowed several more cookies for later use from you overseas friends.

In the modern world there would be two children. One would take the cookie now. If he second one waited , the first one would cry that he was still hungry and eat all the cookies. Thus the child that delayed consumption would end up going hungry.

Children are learning this lesson as we speak. In a generation everyone will want the cookie now, but nobody will want to delay gratification to invest in the time and ingredients required to make the cookies.

M'm Flanders, can one think of using these biscuits to feed poor and well forgotten goats in Somaliland?

re #40
The kid who declined a cookie in anticipation of receiving two later but is denied them is disappointed. With bedtime loomng, chores done, and cookies denied he decides to sleep on it. He goes to bed.

While in bed he has a strange series of dreams and nightmares, all cookie related ....

What about the old sayint "A cookie in the hand is worth 2 in the bush"!!!

20. At 10:04pm on 11 Jun 2010, Free_the_Monkey wrote:

"Well under the previous government the children wouldn't have been short of any cookies.

Mervyn King the central Baker would have produced more dough (QE) so even more cookies could be baked for everyone.

Cookie gap filled and problem sorted."

The problem with that is that QE means that bakers of the future find that when their backs are turned, Mervyn leaps out of a blue telephone box, nicks their cookie dough, and takes it back to today: a process which incidentally causes some of the dough to disappear, meaning that fewer cookies are made in the long run.

QE doesn't create wealth - it creates money out of debt which is paid (with interest) out of future taxes. Otherwise, why doesn't the Bank of England use QE to create 70 trillion pounds and give every person a million so we'd all be rich?

My young daughter, that lives in Russia 's just proved to be a grown up. First, she told me that "biscuit" is a borrowing from French, sounds terribly upper class (that is in Russian) while a common Russian word crudely translated back into English is... cookie (well, maybe "bakey" - but it spoils the analogy). Than, she admitted that the best way to have them is to bake them by oneself. Yet again, she remembered the classes on household and there was a couple of kids that never made good cookies... There just wasn't enough time to teach them but leaving them standing against the wall didn't seem to be good enough - they were told to put the icing on others kids' cookies and serve them to all. The only problem was that there was too many cookies baked and not enough mouth to eat them. And nobody had ever had a thought of giving bad bakers porridge as a penalty...

60, Freud, see my The Escape of Sigmund Freud (JR Books) claimed hoarding faeces led to obsession with money. He has no evidence for that either.

David Cohen


hmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm

Indeed Sang froid would have concluded that the banksters were AAAnill retentive and wanted to sleep with their mother the old lady of threadneedle street so that the patter of little feet could continue to domminate the square mile till Bigfoot arrives WITH THE BOOT..


In reality banksters can no longer see the ballsAAA wood for the trees or should I say the faeces for the Strategically Hyped Investment Tranches WHICH THEY GUARD WITH THEIR LIEF and purrfume spray before depositing into sealed pension pots for themasses

I think experimenting on mice is generally unreasonable, experimenting on children is a station further down the ethical track, although of course Stephanie is talking about American kids so perhaps that is reasonable then.

Cookienomics for Biginnerds

Remember the purpose of QE is to create imaginairy cookies faster than the rate at which the "real" ones are crumbling ,of course the imaginairy cookies are factory sealed to keep the freshness of feeart currency in until the arrivaderci AAAroma mushroom cloud arrives OVER THE Square mile .


There will likely be riots on the streets when the toothfairys decide that they have maw than enough to make a giant set of laughing teeth for every member of themasses to heehaw again without shame and put up the closed for crunch signs [toofingers]whilst Bernankes big choppers arrive to take their bite out of the big AAAple .

I've got a weak sense of smell, so please do forgive me to sniff it in so late but I can feel it now! It's an aroma of Auto de fé... So please do accept my solemn declaration: If we are all to walk away with some cookies few have to have their cookies first.

81. At 11:52pm on 12 Jun 2010, striped-pad3 wrote:

20. At 10:04pm on 11 Jun 2010, Free_the_Monkey wrote:

"Well under the previous government the children wouldn't have been short of any cookies.

Mervyn King the central Baker would have produced more dough (QE) so even more cookies could be baked for everyone.

Cookie gap filled and problem sorted."

The problem with that is that QE means that bakers of the future find that when their backs are turned, Mervyn leaps out of a blue telephone box, nicks their cookie dough, and takes it back to today: a process which incidentally causes some of the dough to disappear, meaning that fewer cookies are made in the long run.

QE doesn't create wealth - it creates money out of debt which is paid (with interest) out of future taxes. Otherwise, why doesn't the Bank of England use QE to create 70 trillion pounds and give every person a million so we'd all be rich?

***
Of course QE creates money out of debt, that's the way the cookie crumbles, but you forgot to 2 important ingedients (sorry)

1. Debt purchased by BoE (the chief baker) includes private sector bakery debt, which when purchased eases the liquidity conditions in the kitchens and allows those kichens to make more cookies. Hurrah.

2. Purchases of govt sector bakery debt under QE is merely an extension of the normal chief baking functions.(sorrry) In the past, we called these Open Market Operations, but for this blog I guess we must now call them Open Mouth Operations (OMO). [Sorry] QE is consistent with balancing the gov't inflation target and interest rates. Lower rates have encouraged investment and consumption in cookie making all round. Hurrah, hurrah.

3. Don't worry about the govt having to pay interest, the rates are terribly low (ask any saver).

4. You ask: "Otherwise, why doesn't the Bank of England use QE to create 70 trillion pounds and give every person a million so we'd all be rich?". You clearly do not know munch (sorry) about cookie consumption. Just because the recent extreme circumstances justified using QE to help make cookies. This was done to stop all the bakeries closing. It is best to re-absorb the extra dough when conditions are normalised and not simply gorge oneself. When baking conditions return to normal, then any excess dough will be mopped up by reversing the Open Mouth Operations (OMO). [Sorry]

So simple really.

Your comment that Mervyn spoils it all by leaping out of a time travelling machine and stealing the extra dough, is just ... so unreal. What are you on? Are you some sort of "Dr Who" fantatist?

#63
"On the sunny side I tip England to win the World Cup. No, I don't support them and only watch for the cringe factor (usually spoilt underperforming super stars).

Prescience or what.

Perhaps Mr Green ate too many cookies.

The problem is that we haven't invested enough in our flour mills to be able to produce enough high value biscuits.

A good business man may eat one cookie and borrow another - but he would be called a banker, not a business man. Why, because when a bank pays money to someone else on your behalf say in 2009 and then finds in 2010 you do not have money to pay them they take the money back from the person who they paid for you, meaning that you have a debt which to all intents and purposes was clear (in other words they put their fingers down your throat to make you throw up the cookie) also they have left you with a credit rating issue so then you can't borrow to buy more cookies, and in any case who would want to sell cookies to someone who doesn't pay. Thus they, the banks, are stifling the economy for their own gain, so they can have all the cookies.

87. At 08:46am on 13 Jun 2010, Free_the_Monkey wrote:

"1. Debt purchased by BoE (the chief baker) includes private sector bakery debt, which when purchased eases the liquidity conditions in the kitchens and allows those kichens to make more cookies. Hurrah."

It eases liquidity conditions in the kitchens in the short term, but in the long term it decreases them by more than it increased them initially, so while it allows you to make 1000 more cookies now, dough to make 1250 cookies will be taken away from the kitchens (or their suppliers) in 10 years' time. Un-hurrah.

"2. Purchases of govt sector bakery debt under QE is merely an extension of the normal chief baking functions.(sorrry) In the past, we called these Open Market Operations, but for this blog I guess we must now call them Open Mouth Operations (OMO). [Sorry] QE is consistent with balancing the gov't inflation target and interest rates. Lower rates have encouraged investment and consumption in cookie making all round. Hurrah, hurrah."

Yes, QE is an extension of OMO, except that it explicitly encourages the government to issue loads more debt, because the bakers know that they can buy it now and sell it for an instant profit to the Bakers of England who are deliberately overpaying for dough. I'm going to stop trying to find analogies now, because it's stretching the point. We've had massive inflation over the last few years, when you consider the costs of shelter, food and fuel. The last thing we need is to continue to impoverish people through price inflation. A 2% prices inflation target when people's pay is stagnant means that government policy is to make people poorer. What we really need is price deflation. As to lower rates encouraging investment, it looks to me as though all lower rates are encouraging are another stock market and housing market and commodities bubble. Un-hurrah again.

"3. Don't worry about the govt having to pay interest, the rates are terribly low (ask any saver)."

Just wait till they have to roll over the increased debt in a few years time...

"4. You ask: "Otherwise, why doesn't the Bank of England use QE to create 70 trillion pounds and give every person a million so we'd all be rich?". You clearly do not know munch (sorry) about cookie consumption. Just because the recent extreme circumstances justified using QE to help make cookies. This was done to stop all the bakeries closing. It is best to re-absorb the extra dough when conditions are normalised and not simply gorge oneself. When baking conditions return to normal, then any excess dough will be mopped up by reversing the Open Mouth Operations (OMO). [Sorry]"

I know plenty about cookie consumption. The recent circumstances of deflationary forces were only extreme because they are an inevitable reaction to the extreme inflation of the preceding years of growth fuelled by debt-funded consumption rather than by investment for increased productivity. Conditions are normalising, and trying to preserve the wild inflation of recent years by getting into more debt is not going to lead to what you claim are normal conditions i.e. rampant increases in speculative private-sector debt.

You say that QE stopped the banks closing, but why would the banks need to close? Answer: they would only need to close if they were balance sheet insolvent i.e. they had made massive losses on their lending and proprietary trading. There are only three possible ways to deal with this:

(1) Transfer the losses from the banks to the taxpayers (causing many who might otherwise have scraped through a major recession to be bankrupted when the inevitable recession arrives).

(2) Allow the banks to earn their way out of insolvency (by charging more to their customers, again bankrupting more of them than necessary later).

(3) Force the banks through administration, so that their shareholders and bondholders take the losses. The rest of the population doesn't have to pay for the banks' bad lending.

Give me option 3 any day.

QE is simply an effort to create extra imaginairy cookie tokens for those willing to forgo more obesity now ,in the hope of greater obesity in the future.



Poor Mugabe should have made sure his population was obese and satiated to the point of only wanting a store house for imaginairy cookie wealth ,then he would have got away with his QE without causing inflation .


How can the obese create extra demand .


Remember A pound is guaranteed to be exchangable for another pound not a cookie ...so we can all sleep at night in the the certainty that tomorrow morning a pound will still be worth ...a pound .[Yes it fills one with undying gratitude towards the valliant efforts of the monetary authorities to preserve the face value of the pound and not let it fall in face value against... other pounds] How do they do it ?


The question for non interest bearing account holders is weather it would be more advantaghouse to purchase a decades supply of factory sealed cookies/condoms rather than sit on imaginairy wealth unlinked to inflation.


Fractional reserve banking in relationship to increasing productive capacity by conjuring capital from thin AAAir causes deflation through engendering oversupply, followed by debt default and non performing loans that fill pension pots and have to be perchased by the same investors through their taxes by those bent on causing inphalation.

Dear Coalition Government,

Please save all your cookies to give out to those vulnerable poor people you've promised to look after.

Oh no - you've already broken that promise, haven't you - even I know about TWO unemployment benefits you've already withdrawn! Perhaps you ought to save all your cookies to pay off the deficit, yourselves!

81 "The problem with that is that QE means that bakers of the future find that when their backs are turned, Mervyn leaps out of a blue telephone box, nicks their cookie dough, and takes it back to today: a process which incidentally causes some of the dough to disappear, meaning that fewer cookies are made in the long run."

oooooooooooooooooooooooooooo

There's no law against banksters stealing from the future, by collecting bonuses from their deliberate creation of non performing loans through the fractional reserve banking debt origination scaaam that can never be repaid [except by tax payers and monetary errosion].

Banksters sitting on eachothers remunerration commitees. are red communistic under the bed in nurture .

What's a cookie? Never quite understand this term.
And, also, who are "they"?

Bank depositors should be made to pay for the banks collapsing loan books since they financed the leverage which allowed money[now lost ] to be created from thin air.

Since depositerrs [in return for the princely sum of 1%interest ] formed the basis for bank loony loans based on leveraged money creation from thin AAAir, then they should carry the losses equal to 5-10 times their deposits plus interest.

The banksters should sue the pants of the depositters for their greedy wickedness and missselling.

Let justice be seen to be done!

73. At 5:41pm on 12 Jun 2010, libragor wrote:
whatever happened to biscuits, or are we all in pall to USA now
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In the UK in the 1990's and this side of the millenium, cookies are extra deep, larger diameter biscuits.

Something to do with a thing called inflation, I understand ...

Forget the biscuits.

Let's follow up on what the Hambro guy said in the programme: gold at US$2000 per ounce by the end of the year?

Any offers, any ideas, anyone?

The way of keeping population slender is to make "slim fast" cookies. They have no taste and cost nothing to bake. (Some call the process of baking and denutritioning the cookie sterilization...). We send them sterilized cookies to China, then they say, we have a cookie boom, then they learn to resterilize them, then... Well, I don't know what's then. I mean, it is good to read an integral from a graph, it's even better to read a second integral and estimate a third derivative from the same graph in real time and to grab a heap of cookies for it but is the sunset any nicer then?

98

I posted a while back it would be $2000, but can't recall by when!

Would think $2000 only possible by end of year if there is a war, so I hope it isn't