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  #51  
Old 02-01-13, 21:51
RetroActive RetroActive is offline
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Originally Posted by rhubroma View Post
A Brief Crappy History of Money
Lastly, according to the Brundland Commission, "we are taking financial loans on future generations, without the intention or hope of repaying any of it back."
Thanks for that "short history of progress".
We need another planet, unless we conscientiously change the construct. I'm sceptical on both counts, although I'm certain the economic construct is going to radically change. The question is qui bono?
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  #52  
Old 02-01-13, 22:17
RetroActive RetroActive is offline
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Firstly long time reader of these forums never commented or registered, but obviously using the nicname I have that this thread interested me

Must ask though you said to keep politics out of this thread... erm how are you going to do that? It is after all a political economy, i am always suspicious when someone claims their economics isnt political.


Greetings! I just signed up myself.

I think he is afraid it will turn into a my side is better than your side, who did what to whom mess (politically). That doesn't interest me either. You'll notice I'm struggling though. I listen to something and hear the economics or banking subject matter and only after realize they were also talking politics, oh well.
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  #53  
Old 02-01-13, 22:18
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rhubroma rhubroma is offline
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Thanks for that "short history of progress".
We need another planet, unless we conscientiously change the construct. I'm sceptical on both counts, although I'm certain the economic construct is going to radically change. The question is qui bono?
Dear RetroActive,

It's true, our social-economic model is f-ucked, and so we need revolutionaries. However those I have known, in my already not too brief existence, I don't trust. They were vehement in their analysis and hasty in their judgments, while often violent. Yet above all, I have the net impression that those, in by now remote times, were right in saying that any future revolution must occur within us. Especially if it's the environment that's at stake (that is our relationship with merchandize, space, the times, work, money), as well as social evolution. Well then each one of us should try to rethink how to live, to spend and what purpose money truly has in life. The most complicated revolution to realize is thus, undoubtedly, rationalizing what each of us has inside.

Last edited by rhubroma; 02-01-13 at 22:41.
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  #54  
Old 02-01-13, 22:47
AndyMMT AndyMMT is offline
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Ha retro could do papers on this stuff and still wouldnt cover it all... and dunce? no would say you are far from it some super questions there.

will try to go through all your points 1 by 1 and apologies if i miss anything, its late, lots of red wine etc (thats my excuse and sticking to it! so will prob screw up!)

"What happens to this deposit. What effect does cash reserve requirements (or lach thereof) have? This is important, I agree."

When the loan is repayed that deposit is destroyed... so the asset and the deposit net to zero and are only in the banking system. the cash reserves are only for any reserve requirement, interbank etc.

"Banks in all cases are Capital constrained NOT reserve constrained."

This has not always been the case. At present they are only capital constrained, cash reserves also act as a restraint. There was a time when Canadian chartered banks not only had to have capital requirements + 10% cash reserves but also had to hold reserves with the Bank of Canada (nationalized) for the benefit of the Canadian people and for having the priviledge of credit creation. We've never been more in debt since the reserves were abolished."

No this is the point that cash reserves DO NOT act as a restraint, its the capital ratios (as talked about in Basle) that are the restraint...what that is is basically is the banks equity.


"Although to make it slightly more confusing its actually arguable that they are'nt even capital constrained due to the implicit guarentees given by the state

I assume that's what you meant. We could also get into what qualifies as tier 1 capital and question the value of those instuments as well, that would never end"
Yes sorry I did mean ARE NOT

Just because the endogenous side of the eqution has been amplified (open the lending window and they will borrow) it doesn't mean the exogenous side is incorrect or irrelevant. Surely the two work in relative harmony, or dischord (as the case may be) the way I'm understanding things. Thus the debate.

No, what Krugman and the other Neoclassicals do is assume that banks are intermedeires between saver and borrower but that is not the case (they are confusing funding i think). The debate (or plain old fashioned punch up really) was over this point.

The money multiplier is a complete and utter myth.


"Supply (both the central bank and the commercial banks) still governs demand (which theoretically would know no end), or should in a world that can in any way be considered "real", imo. If the floodgates are opened, expect a flood.

"Given available credit, investment precedes and 'forces' the saving necessary to finance it."

How do you make credit more or less available? Interest rates and capital + reserve requirements? Zero interest rate policy certainly changes the definition of the word saving and does force investing, certainly."

Ok what you have here is basic market monetarist theory, but as i said above loans are demand led. Its fine for a while but what you end up doing is heading towards negative nominal rates... heres Kalecki in 1943

"The rate of interest or income tax [might be] reduced in a slump but not
increased in the subsequent boom. In this case the boom will last
longer, but it must end in a new slump: one reduction in the rate of
interest or income tax does not, of course, eliminate the forces which
cause cyclical fluctuations in a capitalist economy. In the new slump it
will be necessary to reduce the rate of interest or income tax again
and so on. Thus in the not too remote future, the rate of interest would
have to be negative and income tax would have to be replaced by an
income subsidy. The same would arise if it were attempted to maintain
full employment by stimulating private investment: the rate of interest
and income tax would have to be reduced continuously."


QE is actually an asset swap, there is no change in the amount of private sector assets but its a change in the type ... in the first rounds they were swapping non interest paying non dated cash for interest paying dated bonds. what they were/are trying to do is chase people out of no risk bonds into riskier assets holding up asset prices which gives a "wealth effect" its basically jedi mind tricks.


"I have a feeling there's too much debt though, for a start"
Private debt? yes absolutely.
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  #55  
Old 02-01-13, 22:57
RetroActive RetroActive is offline
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Originally Posted by rhubroma View Post
Dear RetroActive,

It's true, our social-economic model is f-ucked, and so we need revolutionaries. However those I have known, in my already not too brief existence, I don't trust. They were vehement in their analysis and hasty in their judgments, while often violent. Yet above all, I have the net impression that those, in by now remote times, were right in saying that any future revolution must occur within us. Especially if it's the environment that's at stake (that is our relationship with merchandize, space, the times, work, money), as well as social evolution. Well then each one of us should try to rethink how to live, to spend and what purpose money truly has in life. The most complicated revolution to realize is thus, undoubtedly, rationalizing what each of us has inside.
I saw a religion thread awhile back which, understandably, turned into a gong show. Perhaps someone should/could start a philosophy, natural philosophy, metaphysics type thread. 1 is unity, 2 duality, 3 relationship.

"It's true, our economic-social model is f-ucked"
Minor correction.

I can imagine something more radical, run by people more "vehement in their analysis and hasty in their judgments, while often violent" than those running the show currently but it doesn't last for but a blink (the imagining).
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  #56  
Old 02-01-13, 22:59
AndyMMT AndyMMT is offline
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Originally Posted by RetroActive View Post


Greetings! I just signed up myself.

I think he is afraid it will turn into a my side is better than your side, who did what to whom mess (politically). That doesn't interest me either. You'll notice I'm struggling though. I listen to something and hear the economics or banking subject matter and only after realize they were also talking politics, oh well.
Well i have to say that Ferminal knows a hell of lot more than he was letting on, he knew about Keynesian politics and history so expect knows that a lot of economics is framing, take something like national debt it can be written 2 ways but both are exactly the same but it really is political the way you put it.
So National Debt is exactly the same as Non Government Asset. Now which is more scary? well that depends on your political view.
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  #57  
Old 02-01-13, 23:17
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rhubroma rhubroma is offline
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Originally Posted by RetroActive View Post
I saw a religion thread awhile back which, understandably, turned into a gong show. Perhaps someone should/could start a philosophy, natural philosophy, metaphysics type thread. 1 is unity, 2 duality, 3 relationship.

"It's true, our economic-social model is f-ucked"
Minor correction.

I can imagine something more radical, run by people more "vehement in their analysis and hasty in their judgments, while often violent" than those running the show currently but it doesn't last for but a blink (the imagining).
There has already been a philosophy thread. Of course the problem with any revolution is not becoming an institution to rebel against. Hence, the rebus of our existence.

PS: And above all else once their expectations to change everything have gone up in smoke, a bred cynicism makes of them reactionaries. So many of our center right (and left) politicians proliferate as ex-revolutionaries.

Last edited by rhubroma; 02-02-13 at 06:25.
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  #58  
Old 02-02-13, 01:27
Ferminal Ferminal is offline
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The issue with political discussion would be if it drifts and degenerates into the sort of conditions of the two existing politics threads.

I agree economics is inherently political but try and keep such assertions based on theory rather than our partisan natures.
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  #59  
Old 02-02-13, 13:27
AndyMMT AndyMMT is offline
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The issue with political discussion would be if it drifts and degenerates into the sort of conditions of the two existing politics threads.

I agree economics is inherently political but try and keep such assertions based on theory rather than our partisan natures.
Fair enough and know what you mean with political threads they do degenerate pretty quickly.
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  #60  
Old 02-02-13, 14:18
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Fearless Greg Lemond Fearless Greg Lemond is offline
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http://www.volkskrant.nl/vk/nl/11105...-het-nog.dhtml

In short: Holland has nationalized another failing bank and 'we, the people' can pay for this crap. That's how economics work thanks to the capitalistic experiment.
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