@ChrisMayLA6
Is there really any reason for politicians to be afraid of markets ? Indeed - are markets what they're really afraid of ?
If they were, you'd think they would tackle that problem head-on (as indeed Andy Burnham has suggested with regard to 'bond vigilantes'). Doing so would not be difficult - the UK government already has the infrastructure of National Savings it could easily extend to many new guaranteed but unlisted savings products, for both individuals and institutions.
The vast majority of bonds/gilts are owned by big financial institutions actually looking for only modest interest in return for the benefit of safe haven. For them, the government is providing a service - no different really from a government guaranteed bank savings account - why should this be subject to 'market' gambling ? Similarly, sterling is held outside the UK mainly by governments, institutions and businesses that actually need it for trade or other reasons, and generally want stability rather than quick profits.
I don't think 'market' gambling is an essential feature of any of these interactions - I think they could be largely removed from that influence - - but I don't think the real problem is fear of 'the markets' at all. Surely it's the City that would actually squeal if the government started attracting lots more savings directly rather than via financial institutions and traders, and taking back power (such as over interest rates) from the Bank of England and its cosy City pals ?
