What is Money
12 May, 2011Wikipedia’s definition of Money[i] Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred [...]
The Confidence Trick
7 April, 2011Modern banking is based on a confidence trick. The confidence trick is known today as fractional reserve banking. The original confidence trick is easy to understand. It could only have arisen because ‘commodity money’ was used. Commodity money means that the value of the coin is determined by what it is made from, such as [...]
The Solution to the Irish Banking Crisis
14 February, 2011It is important to point out that the export-led sector of the Irish economy including agribusiness, electronics and pharmaceuticals is doing brilliantly and has recorded year on year increases during the last few years despite the demise of the Celtic Tiger. Ireland is exporting a lot more than it imports. However Ben Dyson's excellent blog [...]
The Basel Accords & Mark to Market
4 January, 2011Basel Capital Accords The underlying basis of our modern-day banking system is based on fractional reserve banking. If a bank has say £1,000 in hard-cash, and if the fractional reserve ratio is 10%, this means the bank can create £10,000 of loans or credit or bank-account money out of thin air. This system of fractional [...]