tag:blogger.com,1999:blog-1141932539860553199.post2273302152748044194..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Private banks and credit creation: if you make it seem complicated, you just create loopholes.Mark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger50125tag:blogger.com,1999:blog-1141932539860553199.post-70198491601489284562016-02-09T19:10:25.351+00:002016-02-09T19:10:25.351+00:00The key point that everybody misses in this debate...The key point that everybody misses in this debate is that the fractional system and intermediation system both are trying to introduce a serialisation requirement into the banking system.<br /><br />But *removing* serialisations from business processes happens because that allows things to operate in parallel in different departments. It is much more efficient to operate in that manner.<br /><br />Banks are always fully funded and they maintain their deposits sufficient to cover their loans. But, importantly, they don't do that in any particular order. The lending and treasury functions are asynchronous and operate via a slush buffer and a price determination.<br /><br />Since lending takes longer than obtaining deposits, treasury have information about roughly how much funding they need at any particular point in time via the normal sales pipeline information that demonstrates how many loan requests generally turn into loans advanced.<br /><br />And that's before you take into account the fact that time deposits do not stop anybody spending anyway. I still have an asset - wealth. And I know when it matures. Therefore I can alter the expectations of people selling things by making enquiries and purchase orders to *settle* at the maturity date.<br /><br />Somebody who is deprived of assets via taxation (say) cannot do that with certainty.<br /><br />The whole concept of there being any restriction in the system is flawed at the most basic of levels. Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-45936072235672289042016-02-09T17:55:35.180+00:002016-02-09T17:55:35.180+00:00DBCR - Ricardo - 'all profits return to rents&...DBCR - Ricardo - 'all profits return to rents' - sigh. (Not meaning you. Just generally, 'sigh')Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-37648168486312441842016-02-09T14:28:13.975+00:002016-02-09T14:28:13.975+00:00@D&L
Guessing a price at what the market will ...@D&L<br />Guessing a price at what the market will put up with does not begin to cover the complexity of price discovery.Things immediately get tricky when you have to guess future prices on the futures markets.Some poor souls have futures contracts to take delivery of crude oil now, on prices guessed many months ago.Likely outcome: wipe out.Price discovery is also a big feature of the securities game.How many price factors have to be taken into account with these slippery customers ? Too many for comfort.<br />No wonder there is alleged political, and hence State, interference in the evolution of future price levels.<br />BTW the generally "Georgist/ geolibertarian" cast of this site is based on cost plus profit. All we say, following Ricardo, is simply that costs when they include inflationary rents capture profits. DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-16988230940148016942016-02-09T13:45:17.942+00:002016-02-09T13:45:17.942+00:00Andy B, DBCR above,
Looks like Lola has back trac...Andy B, DBCR above,<br /><br />Looks like Lola has back tracked so I won't drone on. I agree Karl Polanyi is as important as you suggest. In some circles, there is a battle about who was the greatest intellect: historians say brother Karl, philosopers and scientists say brother Michael. Just Google this time!<br /><br />I have dusted down my copy of the GT(2001) and Stiglitz gives a first class introduction for economists if you need one. <br /><br />Rather than pretend that I have got every aspect of the book; for the folks here, I would suggest a modern text that can be seen to be 'embedding' economics in wider social and historical events that follows from a clear understanding of Polanyi's GT. Please read/ dust down, Debt: The First 5,000 Years by David Graeber!!! You will find 'Polanna' in his notes.<br /><br />MikeWMikeWhttps://www.blogger.com/profile/15455583313857077618noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-74862975328397763092016-02-09T10:05:07.889+00:002016-02-09T10:05:07.889+00:00the businessman exerts market forces on the suppli...the businessman exerts market forces on the supplier and thus upon the costs, when he chooses the supplier and his customers exert market forces on him , and thus upon the eventual markup, when they choose him.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-65386896921740567932016-02-09T10:03:39.461+00:002016-02-09T10:03:39.461+00:00DBCR. Also. "The whole of the Austrian cult...DBCR. Also. "<i>The whole of the Austrian cult of market forces ( a totally abstract entity) is dependent on price discovery when ,in practice, prices are set by guesswork about what the market will bear</i> Precisely. And when the market won't 'bear those prices' what happens? They adjust. It's market forces. Price discovery. End of.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-41871501403434275732016-02-09T10:00:08.706+00:002016-02-09T10:00:08.706+00:00DBCR. Yes. Unworthy of me. Knackered but that&#...DBCR. Yes. Unworthy of me. Knackered but that's no excuse.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-84150743202540523152016-02-09T09:13:25.346+00:002016-02-09T09:13:25.346+00:00Lola : Patronising or what? Andy Blatchford is giv...Lola : Patronising or what? Andy Blatchford is giving examples from the harder, more physical, end of the spectrum of business activities<br />and you accuse him of subscribing to airy fairy theory.<br />The whole of the Austrian cult of market forces ( a totally abstract entity) is dependent on price discovery when ,in practice, prices are set by guesswork about what the market will bear.This is dressed up in any amount of theory by hired gun economists (Have Degree Will Travel) who follow the money by devising equations and algorithms which frighten people, whose minds were altered at an early age by an education system that taught them that numbers were incomprehensible .DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-3475844733877884002016-02-09T08:59:07.170+00:002016-02-09T08:59:07.170+00:00"Most prices are set by working out your cost..."Most prices are set by working out your costs and adding a mark up for profit."<br /><br />They may be in the business in which you work, but that does not mean that this practice is universal. Consider this, if all prices are set by "cost plus", what happens when the cost goes up? Does the price go up or the "plus" come down? If the price goes up and the customer is willing to pay the higher price for the same thing, why were you not looking after the owners of the business by charging that higher price in the first place?<br /><br />The idea that all businesses work on a cost-plus basis and that all cost increases can be passed on as higher prices is a persistent myth. A widely-believed myth, it is true, but still a myth, for all that.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-48661001903400599662016-02-09T08:52:23.607+00:002016-02-09T08:52:23.607+00:00"If a bank can borrow central bank deposits, ..."If a bank can borrow central bank deposits, it can get cash."<br /><br />Din, I think the problem is physical, not financial.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-57049785984062498962016-02-09T07:41:36.921+00:002016-02-09T07:41:36.921+00:00AB. Son, you have a serious knowledge and logic pr...AB. Son, you have a serious knowledge and logic problem. But, I have enjoyed learning about Polyanna of whom I was unaware.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-70451196426854131422016-02-09T07:03:14.065+00:002016-02-09T07:03:14.065+00:00The fact that "cost plus" pricing is use...The fact that "cost plus" pricing is used does not exclude market forces. Market forces establish the plus part and go towards part or all of the cost part.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-3730173676834955282016-02-08T23:56:39.462+00:002016-02-08T23:56:39.462+00:00"Market forces" lol off to ride free mar..."Market forces" lol off to ride free market unicorns eh...enjoy your fairy tales and I do hope they keep you comfy, meanwhile in the real world the adults will get on with it. Andy Blatchfordhttps://www.blogger.com/profile/05196261322445607791noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-53286067531698784872016-02-08T23:40:13.451+00:002016-02-08T23:40:13.451+00:00AB@ 23:36 Hahhahhahahahahaha. Market forces. Good...AB@ 23:36 Hahhahhahahahahaha. Market forces. Good night sweet dreams.<br />Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-76071159267026493382016-02-08T23:36:42.323+00:002016-02-08T23:36:42.323+00:00Discounts come in for reasons I stated above, it &...Discounts come in for reasons I stated above, it 'depends' on what biz they give me, pay etc.<br />If you want an example ask for a tariff from DHL, UPS etc they have a general tariff but depending on amount of biz you give them they discount from that tariff. No market clearing price, so if no market clearing price where does that leave you? Well nowhere in the real world.Andy Blatchfordhttps://www.blogger.com/profile/05196261322445607791noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-38884349085341633682016-02-08T23:27:06.188+00:002016-02-08T23:27:06.188+00:00AB. And the 'discount' factor?AB. And the 'discount' factor?Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-47699057255037878712016-02-08T23:24:27.889+00:002016-02-08T23:24:27.889+00:00Most prices are set by working out your costs and ...Most prices are set by working out your costs and adding a mark up for profit. I generally add around 10% but it does depend on the customer, what they give me, how quickly they pay. What you don't realise is that completely destroys the laws of demand & supply, without that where does your 'free market' is best hold up...it doesn't. Andy Blatchfordhttps://www.blogger.com/profile/05196261322445607791noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-3307671913813468682016-02-08T23:18:17.224+00:002016-02-08T23:18:17.224+00:00AB @ 23.14. OK. Explain how you derive mark up an...AB @ 23.14. OK. Explain how you derive mark up and discount percentages.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-60110648303644810942016-02-08T23:15:28.219+00:002016-02-08T23:15:28.219+00:00AB @ 23.11. Eh? What? (first sentence). Second ...AB @ 23.11. Eh? What? (first sentence). Second sentence is just self contradictory. Free markets is precisely how things really work.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-64118008541950945172016-02-08T23:14:55.626+00:002016-02-08T23:14:55.626+00:00 Oh dear Lola busted...explain this link.
http:/... Oh dear Lola busted...explain this link.<br /><br /><br />http://www.pine-grove.com/online-calculators/markup-and-discount-calculator.htmAndy Blatchfordhttps://www.blogger.com/profile/05196261322445607791noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-56252224355716847942016-02-08T23:11:38.406+00:002016-02-08T23:11:38.406+00:00AB. Nope. That remark tells me that you absolutel...AB. Nope. That remark tells me that you absolutely do not know how 'prices' are 'set'.<br /><br />Try again?Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-36588068590546335102016-02-08T23:11:38.257+00:002016-02-08T23:11:38.257+00:00If you do run your own business don't you find...If you do run your own business don't you find your model of how prices set runs against how you do it in real life? Your 'free market' stuff just runs into a wall with how things really work, mind you I don't expect an Austrian to have any grip on reality.Andy Blatchfordhttps://www.blogger.com/profile/05196261322445607791noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-54788736133796986002016-02-08T23:07:02.282+00:002016-02-08T23:07:02.282+00:00"Have no idea how prices are set"
Well ..."Have no idea how prices are set"<br /><br />Well as I am a branch manager at a freight forwarder do think I have a good idea how they are set 'sunshine' cost + mark up mostly...how do YOU set prices? It isn't an auction market mostly you know.<br /><br />Andy Blatchfordhttps://www.blogger.com/profile/05196261322445607791noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-59836320381616680472016-02-08T22:48:17.315+00:002016-02-08T22:48:17.315+00:00AB. I qualified my remark by saying that if the p...AB. I qualified my remark by saying that if the precis I read was accurate - you will recall. Are you saying that the synopsis was in error?<br /><br />Nevertheless it is you and Polyanna that have no idea how prices are set. Economists do not ignore other social sciences at all. If you'd read anything else you'd know that. Or rather as you probably have read other stuff, how did you miss it?<br /><br />And I beg to differ. It is exactly working in (or running) a real business - as I do - that is a practical test of not Polyanna.<br /><br />As I said, the good thing about stuff like this is it helps refine one's arguments. Piketty, Mazzucato, Keynes (?) etc etc come up with all this <i>stuff</i> to try and find something else and when you start looking at it it's either contradictory, or confused, or selective or whatever. And then it trends into a cult.<br /><br />I am sorry, son, but your man (assuming the precis is reasonably accurate) if just another semi nut job. Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-74585176077316547242016-02-08T22:31:54.106+00:002016-02-08T22:31:54.106+00:00Cash is central bank deposits written on a loose n...Cash is central bank deposits written on a loose note.If a bank can borrow central bank deposits, it can get cash.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.com