Economic Analysis, Theory

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Lucian AerisSpot on....

6 days ago
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Setting the record straight: Sovereign Money is not Full-Reserve Banking

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The German Bundesbank has recently released an interesting report on the role of banks, non-banks, and the central bank in the money creation process. We have a few issues with the Bundesbank article; however, the majority of the analysis is good. More importantly, the conclusions drawn from the report by news outlets and the blogosphere are misleading.

HowardPerhaps because supporting sovereign money is the "third rail" of an economists career. Why? Because money is power.Bernhard Lietaer asked Paul Krugman, “Why, with all your influence, don’t you tell people how the money system works?Paul replied, “Didn’t they warn you about not touching the ...

2 weeks ago

HowardSo much of the new money created today goes into speculation instead of the real economy. If new money created by government was spent, lent or gifted into the economy for things people really need and use wouldn't there be little concern about inflation? Inflation occurs due to money going to thin...

2 weeks ago

Lucian AerisIt looks like the report is only in German, but from the summary it seems that the Bundesbank's economists think FRB wouldn't necessarily provide more stability than better regulations. It appears to me that this is an attempt by the Bundesbank to gently nudge the debate away from the proposal to re...

3 weeks ago
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Positive Money’s submission to the Treasury Select Committee on the effectiveness and impact of post-2008 UK monetary policy

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The House of Commons Treasury Select Committee is undertaking a landmark inquiry into monetary policy. Our aim is to persuade the committee to acknowledge monetary policy’s bad side-effects and to consider the benefits of fairer and more sustainable monetary policy tools. With this in mind, we coordinated a joint letter from over 40 leading economists, as well as a statement from nearly 10,000 people.

Chris CookFirst point is that a complete political economy may be built using only risk, production & cost sharing agreements & promises/credit instruments. These agreements and instruments pre-date modern finance capital (debt, equity & derivatives) by millennia and will replace them.Secondly, be...

4 weeks ago

James MurrayChris,I did ask that you simplify your very long and, to me, indigestible post so that your point may be better understood.Your reply regretfully does not that simple clarity.Perhaps I am a bear of very little brain.But on your two points:1. "...neither debt nor equity are necessary"Why? And so wh...

4 weeks ago

Chris CookThanks for your response, James.Firstly, in relation to double entry book-keeping, debits and credits are not limited to accounts receivable and payable: they also relate to the equity claims of owners on one side of the balance sheet, and an asset registry (memorandum account) on the other side of ...

4 weeks ago
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Review of “The Production of Money: How to Break the Power of Bankers”

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Summary Ann Pettifor’s new book, The Production of Money, is an excellent contribution to the growing body of thought exposing mainstream, neoclassical economics’ poor understanding of money, banking, and finance, and how its thinking has led to a financial system that we serve, rather than one that serves us.

medialAxisI guess it won't be 1st world economies that take a lead in challenging the banks (too much vested interest IMO or too much entanglement of banks with govts), which is interesting in itself (could leave the 1st world lagging behind). Not sure how S Korea's economy is classified but they're looking a...

4 weeks ago

Laughing_GnomeVery good point Medial Axis. The cashless aspect had gone out of my mind. I had forgotten the hunt is on for cash and that negative interest rates are one of the likely drivers. Also getting potential visibility of all taxable activity. The reach-in and grab could also happen, but I suspect they wou...

5 weeks ago

medialAxisLooks like quite a few central banks are jumping on the "block chain" or at least looking to providing a Central Bank Digital Currency (CBDC) and accounts to retail customers. Some down sides might be loss of privacy, tax taken on the fly (up to you to claim it back if it's wrong) and negative inter...

5 weeks ago
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