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By observation and logic regulationism was at the heart of the events leading up to the 2008 credit crisis. It was the predictable, abject and unremitting failure of governments and their bureaucratic Satraps engaging in credit expansion and niaive and incompetent (based on their ignorance and their own self regarding arrogance) bank regulation especially as regards the quantity and quality of their capital requirements that encouraged Banks in their own (and ultimately unsustainable) monetary expansion. The result being an absolutely text book Austrian Business Cycle theory failure.
In fact the sheer quantity of regulationism has made Banking a de facto nationalised industry: a state sanctioned specially privileged cartelised supplier of a monopoly product engaged in couterfeiting.
So then we get self serving bureaucrats like Randall clamouring for more regulation post Brexit. One might have thought he was worried about his job.
But the Lawyers are Happy
4 hours ago
12 comments:
Squeal piggie, squeal! Lovely to hear it.
I never , ever ,ever trust anyone who holds their hands out in front of them like they are holding and invisible football when speaking .
It's a classic politicians and deceivers trick .
There must be a shyster school teaching them that rubbish .
The word “counterfeiting” is apt. The French Nobel laureate economist, Maurice Allais, described money creation by private banks as counterfeiting. See opening sentences here:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=160532
And David Hume, writing almost 300 years ago said the same.
For the benefit of anyone who has not caught up with the fact, when a private bank grants a loan, it does not necessarily get the money from anywhere: it can simply open an account for the borrower and credit £X to the account. That money comes from thin air.)
RM. As Rothbard et al say.
FWIW I consider the whole current banking settlement a giant Ponzi scheme to keep government and bureaucrats in fat entitlements and index linked pensions at the expense of the productive economy. 'Regulated' banking is a key component of this grand theft. And that's why bankers are paid well, learning from Bevin the governemnt and bureaucrats conspire to 'stuff their banking lackey's mouths with gold'.
This clown Randall is just another parasite.
RM, all money "comes from thin air".
Bayard, I realize all money comes from thin air, but there's a difference between a central bank producing thin air money and a private bank doing it. The profit that government and its central bank make from that activity is the property of the community as a whole. In contrast, a private bank pockets the profit.
"The profit that government and its central bank make from that activity is the property of the community as a whole."
That's a debatable point. If you believe, as I do, that there is no connection between the amount of government revenue raising and the amount of government spending (MMT, or the Magic Money Tree theory), then any extra revenue raised by the central bank is not going to result in any extra benefit to the community.
Bayard, I've supported MMT for a long time as well, and I agree with one of the basic MMT ideas, namely that there should not be a close relationship between governments spending and the income government derives from tax. However, it is going too far to say "there is no connection" between the two. For example, it's plain unrealistic to think that in the typical Western country where about 30% of GDP is allocated to public spending, tax can be cut to absolutely nothing - to zero.
Plus the profit that government and its central bank make from money creation ("seigniorage" profit) doesn't actually come in the form of "revenue". It comes in the form of physical assets and similar. For example, if government and central bank create new money and spend it on hospitals, then government gets new hospitals in exchange (to put it figuratively) for silly bits of paper with "£10" stamped on them.
RM. MMT seems only to work when money is nationalised. WSo don't nationalise it then.
RM. In a free money system with Banks competing for customers to use their brand of money are seigniorage profits largely competed away?
RM, L, back in the C18th, banks really did create money in that they issued their own banknotes. OTOH, what is the difference between a check made out to "bearer" or "cash" and a banknote issued by a private bank, so in a way, banks still do this.
B, correct, thanks.
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