Bank of England
Following the announcement the FTSE 100 Index leapt rapidly and the pound reached its highest level against the Deutsche Mark since Sterling's exit from the ERM.
The target has now changed to 2% since the replacement of RPI (Retail Price Index) with CPI (Consumer Price Index) as the treasury's inflation index. RPI / CPI figures are produced in Britain by the Office for National Statistics, whose independence from direct political control and interference was announced in 2005, also by the Chancellor of the Exchequer, Gordon Brown. He modelled this move on his decision affecting the Bank of England.
An independent Bank of England had featured as a key plank of the Liberal Democrats economic policy since the 1992 general election[2]. A Conservative MP Nicholas Budgen had also proposed this as a Private Member's Bill in 1996, but the bill failed as it had neither the support of the government nor that of the opposition.
In 2006 a sum in excess of £25 million in banknotes belonging to the bank was stolen from a depot in Tonbridge, see Securitas depot robbery.
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Transition metal
Electronic configuration
Elements with atomic numbers 1 through 20 have only electrons in s and p orbitals, with no filled d orbitals in their ground states.
In the fourth period, elements with atomic numbers 21 to 29 (scandium to copper) have a partially filled d subshell or ions with partly filled d subshell. The outer ns orbitals in the d-block elements are of lower energy than the (n-1)d orbitals. As atoms occur in their lowest energy state, the transition metals tend to have their ns orbitals filled with electrons. Hence, these elements all have two electrons in their outer s orbital, with the exception of copper ([Ar]4s13d10) and chromium ([Ar]4s13d5). These exceptions occur because half- and fully-filled subshells impart unusual stability to the atoms. Similar exceptions are more prevalent in the fifth, sixth and seventh period.
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Gold as an investment
Historically increases in the supply of paper money or fiat currency through increased money supply would cause the demand for gold to increase. There was a time when gold was money and vice versa. If citizens felt that there may be insufficient gold to cover the paper money in circulation, they would queue up at the bank to change their paper currency back into gold.
However, since the gold standard was ended on August 15, 1971, governments have been free to print as much money as they choose, without fear that their populations will come knocking on the central bank's door demanding to change their paper money back into gold.
In January 1959 US M3 money supply was $288.8 billion [31], and the official gold reserves of the United States was then 17,335.1 tonnes, or 557,336,000 ounces [32] (there are 32,150.7 troy ounces in a tonne). That means that in 1959, there were $518 in circulation for every ounce of gold reserves held by the USA. Although the theoretical price should then have been $518 per ounce, the actual price, as fixed under the gold standard was only $35 an ounce.
By August 2005, the US M3 money supply had risen to $9,873.9 billion, whilst at the same time the Official Gold Holdings of the United States had fallen to just 8,133.5 tonnes, or 261.50 million Troy Ounces [33]. This means that today, in 2005, there are $37,831 in circulation for every troy ounce of gold held by the United States.
However, this increase of 75 times in the ratio of central bank gold holdings to debt does not allow for the fact that the gold standard was abandoned in 1971 and gold holdings have been deliberately and considerably reduced. Another far less dramatic way of looking at the same figures is this: In 1959 US government debt valued in gold was 8 billion Troy ounces, in 2005 US government debt was 20 billion oz gold - an increase of only 2.5 times.
The above numbers show the falling influence of gold in the monetary system of the world today. Gold bugs believe, or even hope, that one day gold's importance will return as the printing of paper money gets out of control and we end in a hyper-inflationary fiat money collapse.
They sometimes cite the huge United States public debt, budget deficit and trade deficits as additional evidence that things are getting out of control. For example, in 1959 US public debt was $290,797,771,717 ($290 billion), whereas by February 2006 it had reached $8,205,376,724,587 ($8.2 trillion) [34]. The U.S. budget deficits are the largest in history and according to the U.S. Government's own published plans, the budget will not be balanced in the foreseeable future [35].
The United States Federal Reserve ceased publishing M3 data on 23 March 2006, with the last published data indicating a year-on-year growth rate of 8.23%. Central banks may see this as a reason to limit further increases in their reserves of dollars, and thus alternatives such as gold or the euro might be considered. Jon Nadler, an analyst at Kitco Bullion Dealers, said gold was still benefiting from August 30, 2006 release of the minutes to the last rate-setting meeting of the US Federal Reserve. The minutes to the August 8, 2006 meeting, at which the Federal Open Market Committee kept short-term interest rates unchanged for the first time since 2004, supported the view that US borrowing costs have peaked.[36]
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Economics
Criticisms of economic theory and practice
Economics has been persistently criticized for its heavy reliance on unrealistic, unobservable, or unverifiable assumptions. Some people reply to this criticism by saying that the unrealistic assumptions of economics result from abstraction from unimportant details, and abstraction is necessary for knowledge of a complex real world. So, far from unrealistic assumptions detracting from the epistemic worth of economics, such assumptions are essential for economic knowledge. Denominating this explanation the abstractionist defence, and after clarifying abstraction, unrealistic assumptions and kindred notions, at least one study have shown that this abstractionist defence does not successfully rebut the position of those who criticize economics for its unrealistic assumptions.[10]
Economics is a field of study with various schools and currents of thought. As a result, as in many other fields, there exists a considerable distribution of opinions, approaches and theories. Some of these reach opposite conclusions or, due to the differences in underlying assumptions, contradict each other. [11], [12].
Criticism on several topics in economics can be found elsewhere, in both general and specialized literature (for example, General equilibrium, Pareto efficiency, Marginalism, Behavioral finance, Behavioral economics, Keynesian economics, Monetarism, Endogenous growth theory, Comparative advantage, Kuznets curve, Laffer curve et al.).
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