Ascension of Central Banker Carney Continues to Instruct Us
By Staff News & Analysis - July 04, 2013

Mark Carney to review female representation on bank notes … Sir Winston Churchill will feature on the new £5 note to enter circulation in 2016 … Which woman should go on a banknote next? Bank of England governor Mark Carney will look at the women represented on banknotes by the end of July. Mr Carney said he believed that those chosen should represent the diversity of great British historical figures. He wrote a letter in response to a Conservative MP who is disappointed that the appearance of Sir Winston Churchill on a new £5 note leaves no female characters on the currency. Mr Carney said discussions began on his first day in office on Monday. – BBC

Dominant Social Theme: This central banker is a new breed, caring and enlightened.

Free-Market Analysis: We've been chronicling the arrival of the "most powerful" central banker of his era, the new head of the Bank of England, Mark Carney … and this latest news squib is certainly worthy of mention.

It provides yet one more example of how those involved with central banking manipulate symbols to obscure substance. The grand chambers in which they meet, the relentless coverage of even the most insignificant remark, the fawning photo-ops … all contribute to an air of inevitability and "business as usual" when it comes to the modern monetary process.

What have we learned of late? That Carney took the "tube" to work on his first day on the job and that he was an hour early. And now we learn that one of Mark Carney's very first acts is to figure out how to place an additional woman's likeness on a British bank note.

Here's more:

Mary Macleod is the Conservative MP for Brentford and Isleworth and chairwoman of the All Party Parliamentary Group for Women in Parliament. She told Mr Carney that the decision to leave no women on banknotes when Elizabeth Fry is replaced by Sir Winston Churchill was "completely unrepresentative of the role that women have played and continue to play in our country's history."

In reply, Mr Carney said that it was not the Bank's intention to leave women unrepresented and that he was already discussing with his new colleagues the best way to ensure that the currency celebrated a diverse range of figures, both now and in the future.

… Mr Carney added that he expected to make a public announcement once his discussions have been completed, no later than the end of July. The Bank of England issues nearly a billion banknotes each year, and withdraws almost as many from circulation. Notes are redesigned on a relatively frequent basis, in order to maintain security and prevent forgeries.

Carney has many challenges ahead of him and the actions of the previous head of the British central bank, Mervyn King, inspires little confidence that his successor can successfully battle what's ahead.

King participated in a horrible monetary expansion that led to the greatest economic downturn since the Great Depression. And despite news here and there of "green shoots" there is no real evidence we can see that the British economy – or the US's for that matter, let alone Europe's – is returning to health.

A main tool, of course, is interest rates. But British interest rates are already likely as low as they can be and despite the hints of US Federal Reserve Chairman Ben Bernanke regarding tightening, it is difficult to see Carney moving in that direction any time soon.

A continued loose policy in Britain and the US, on the other hand, may eventually bring considerable price inflation to the fore. Carney has a lot more to worry about than who is on what bank note. And you would think that Ms. Mary Macleod would be concerned with broader issues, as well, rather than who is on what British banknote.

But this is a kind of metaphor for the larger central banking scene. It is sustained by false gravitas and propped up by the kind of ceremony and tradition once reserved for churchmen and royalty.

We are meant to focus on the peripheral so that we don't question what is central. The recent ascension of Carney and the coverage he has received surely emphasizes this sort of manipulation.

After Thoughts

As such, it is quite instructive.

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