tag:blogger.com,1999:blog-1141932539860553199.post6363844898903038437..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Glad to have cleared that up.Mark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-1141932539860553199.post-57978985984800506602014-11-17T11:01:05.303+00:002014-11-17T11:01:05.303+00:00Read all the posts. My brain hurts. I thought ba...Read all the posts. My brain hurts. I thought banking was simple. Someone sets up a bank with his own capital. Employs some clerks. Runs bank accounts. Takes term deposits for interest. Makes loans. Earns a profit. Now, that's taken care of Monday and Tuesday. Rest of the week on the golf course.Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-59720003951256767982014-11-17T08:33:24.819+00:002014-11-17T08:33:24.819+00:00"nobody would then or now accept in change sa..."nobody would then or now accept in change say a £20 I0U signed by somebody you'd never heard of with no guaranteee as to its creditworthiness or convertibility."<br /><br />I am afraid the English language is against you on this one. The etymology of the word "bill" show that this is precisely what happened:<br /><br />"written statement," mid-14c., from Anglo-French bille, Anglo-Latin billa "list," from Medieval Latin bulla "decree, seal, sealed document". Sense of "account, invoice" first recorded c.1400; that of "order to pay" (technically bill of exchange) is from 1570s; that of "paper money" is from 1660s. <br /><br />OK an invoice is more of a "you owe me" then an IOU, but the it shares the IOU's convertibility and creditworthiness.Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-29607466687761127412014-11-17T07:41:04.728+00:002014-11-17T07:41:04.728+00:00DBC, you have a novel take on the history of banki...DBC, you have a novel take on the history of banking. The whole point is that money lenders or goldsmiths DID accept the gold coins back as deposits, and then lent them out again etc, and the IOUs issued against deposits became a form of currency.<br /><br />Remember: loans create deposits, or do you conveniently forget this when it suits?<br /><br />Positive Money's campaign is a worthy campaign which 'raises awareness' of important issues.<br /><br />I'm just saying, technically, their proposed solution won't work.<br /><br />You said so yourself:<br /><br />Loans create deposits.<br /><br />Therefore if you allow banks to lend money (which Positive Money's suggestion allows) then they will create money.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-12443171718265755382014-11-16T20:21:01.153+00:002014-11-16T20:21:01.153+00:00@B Yes and the Jews were not allowed to own land s...@B Yes and the Jews were not allowed to own land so were disbarred from the traditional form of rent-seeking.<br />@MW<br />The problem is you insist on equating two-bit money lenders with early well-capitalised banks.You do not have to worry yourself by reading Positive Money blogs to know that "Banks do not lend money"(Prof Victoria Chick et al).By definition money lenders do lend money and dish out their own capital in return for personal IOU'S.For some inexplicable reason you think that these IOU's "must be worth as much as the gold coins" see above.If they were issued by the money lender they might conceivably be so, but these were issued by his customers so could not be circulated.Where the similar bank notes became accepted as "currency" ,nobody would then or now accept in change say a £20 I0U signed by somebody you'd never heard of with no guaranteee as to its creditworthiness or convertibility.<br />It is a pity you have lost it with Positive Money.Their present campaign which includes an attack on banks for over-investing in mortgage business would easily meld with Land Tax propaganda. They are organising their members to write to MP's ( a matter of putting your name to a pro forma) to attend a Commons debate on the Money Creation system on 20th November.But the land taxers prefer to do things their way i.e argue amongst themselves over the purest form of LVT.Forward into oblivion!DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-68399377648164241602014-11-16T18:17:26.780+00:002014-11-16T18:17:26.780+00:00"You are sticking to the Medieval Mediterrane..."You are sticking to the Medieval Mediterranean where a lender would have been reckless to lend out hard gold money to impecunious geezers who would hop on a boat leaving the lender with a paper iou ,which people would take off his hands only at a hefty discount."<br /><br />Throughout most of the mediaeval period, lending money at interest was banned by the Church, so the only people who were able to do this were the Jews. Even they were banned by their religion from charging interest when lending to other Jews. The only reason they were allowed to charge interest to gentiles was precisely to cover the risk that the borrowers might "hop on a boat leaving the lender with a paper iou ,which people would take off his hands only at a hefty discount."<br />(Which they frequently did, or got the king to cancel the loan by royal decree, or simply set up a pogrom and killed the person who'd lent them the money in the first place.)<br />Bayardhttps://www.blogger.com/profile/15211150959757982948noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-422429033455925692014-11-15T18:00:02.929+00:002014-11-15T18:00:02.929+00:00I have read Martin Wolf's article it is the us...I have read Martin Wolf's article it is the usual bollocks spouted by Positive Money and IT WILL HAVE LITTLE OR NO IMPACT ON THE BANKS.<br /><br />I explained why two years ago and I can't be bothered to explain it again<br /><br />http://markwadsworth.blogspot.co.uk/2012/08/positive-money.htmlMark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-34764373189662293152014-11-15T12:11:25.567+00:002014-11-15T12:11:25.567+00:00DBC, seriously. You are doing Double Think.
You...DBC, seriously. You are doing Double Think.<br /><br /><br /><br />You say <i>"What do I think Bankers live off? Creating money every time they make a new "loan" and charging interest on it."</i><br /><br />Exactly! You've answered your own potty earlier question about what earlier money lenders lived off! That's what money lenders have always lived off, whether they are lending out gold coins or numbers on computer screens!<br /><br /><i>"You are sticking to the Medieval Mediterranean where a lender would have been reckless to lend out hard gold money to impecunious geezers who would hop on a boat leaving the lender with a paper iou."</i><br /><br />No! YOU ARE!! YOU KEEP MAKING UP FACTS ABOUT THESE PEOPLE!!<br /><br />CLEARLY THEY EXISTED AND CLEARLY THEY MADE MONEY THE SAME AS TODAY'S BANKERS!! <br /><br />IT IS EXACTLY THE SAME IN BOTH CASES!!<br /><br />SOMETIMES BANKS GET DUPED INTO LENDING TO PEOPLE WHO CANNOT REPAY, FFS!!!!!Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-45867888579231716692014-11-15T11:20:43.571+00:002014-11-15T11:20:43.571+00:00What do I think Bankers live off?Creating money ev...What do I think Bankers live off?Creating money every time they make a new "loan" and charging interest on it. That's the orthodox explanation.<br /> In the primitive world you are so keen to inhabit, the lenders were not able to create new gold with a stroke of the quill.They could n't go in for any funny business until paper notes started being circulated with only a fractional reserve of gold for troublemakers who preferred the real thing.It may have escaped your attention that in the modern world stress testing and other pressures are on banks to get their reserve levels up after years when they were accepting all kinds of CDO's and other commercial paper which being based on American no recourse mortgages dematerialised.<br />I have challenged you to critique<br />Martin Wolf's "Strip private banks" analysis. You are sticking to the Medieval Mediterranean where a lender would have been reckless to lend out hard gold money to impecunious geezers who would hop on a boat leaving the lender with a paper iou ,which people would take off his hands only at a hefty discount. Better to buy land and rent it out at the same rate of interest:at least its not going to disappear!<br />Less of the bad language and insults please and more engagement with contemporary reality .You must be aware that Wolf has said repeatedly that full-on Georgist LVT would rob the banks of collateral and collapse the banking system ,permanently this time. It would be a help if some kind of government reinforcement by talking over the money creation process was there to take the immense financial strain I would have thought.DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-63040352454497372142014-11-15T10:03:00.335+00:002014-11-15T10:03:00.335+00:00"If the money lender hands over the gold coin..."If the money lender hands over the gold coins as a loan, he will be left with a paper i.o.u and no real assets at all."<br /><br />The lender is left with the IOU which (together with interest thereon) must be worth as much as the gold coins OR ELSE HE WOULD NOT HAVE LENT OUT THE GOLD COINS IN THE FIRST PLACE!!!!!!!! <br /><br />"What is he supposed to live on? Is he going to loan out the paper i.o.u as that's all he's got left?"<br /><br />FFS, grow up. What do you think bankers live off?????Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-1604871045509616052014-11-14T19:30:15.284+00:002014-11-14T19:30:15.284+00:00A most peculiar explanation of the gold coin syste...A most peculiar explanation of the gold coin system if I may say so.If the money lender hands over the gold coins as a loan, he will be left with a paper i.o.u and no real assets at all.What is he supposed to live on? Is he going to loan out the paper i.o.u as that's all he's got left?<br />Usually the standard explanation is that lenders of gold coins gave promissory notes to traders to pick up gold coins off their brothers or family in distant towns and these notes went into circulation.But these notes were n't originally forms of debt : they were receipts for money held in the vaults.There was "no out of thin air" involved.The funny business of FRB only started when they started issuing more receipts than they had gold coins laid up.You may call it debt: Murray Rothbards calls it fraud.<br /><br />I dunno why you are picking over the archaeology of banking.You should be writing a critique of Martin Wolf's "Strip private banks of the power to create money" (FT 24.April)DBC Reedhttps://www.blogger.com/profile/17891849727783879145noreply@blogger.com