Banking and Conspiracies
- Thread starter phildwyer
- Start date
Thank you jazzz and bb! I really want to get my head around this so i've just printed it off and i'm gonna go read it with my lunch. Let's see what kind of communicators/teachers you two are...!! I will be back with my questions.
Incidentally this thread (only got through half of it so far) is a reminder to me about how good urban once was... and still can be.
Incidentally this thread (only got through half of it so far) is a reminder to me about how good urban once was... and still can be.
Fez909
toilet expert
Backatcha: got any decent books on the subject of usury? I've always thought your posts were amongst the most researched on here, and so was a bit surprised to hear you say usury was your biggest 'issue' in a thread recently (along with energy, I think?) as I'd just associated it with the conspiracy theorists like most others seem to have.
However, what you, Phil and others have posted here seems to make sense and I'd like to know more, preferably printed material, as I can't read too much on screens!
Cheers.
However, what you, Phil and others have posted here seems to make sense and I'd like to know more, preferably printed material, as I can't read too much on screens!
Cheers.
Jazzz said:You have nailed the very crux of the issue fela fan.
There's a massive difference between money created by the government in the form of bills, and that produced by bank loan (of which government bonds are a form).
But I'm too frazzled to attempt a 'nice and easy' explanation right now! I shall do my best tomorrow. But be warned - prepare for some serious headspinning. This is not easy stuff. If it was, they wouldn't get away with it!
Right, i had me lunch and a read of yours and BB's posts. I understand at the language level, but i'm still having conceptual problems!
Let me try and say what i understand and have it confirmed or corrected.
The government is responsible for ordering a whole load of pound notes to be printed up. From whatever way these pound notes then get into the hands of people who can then spend them in whatever way they choose.
The government, I guess, controls the actual finite number of notes, and thus physical cash, available to the population as a whole.
Personally i get my cash either from the result of my work, or my family (and their work). It goes straight to my bank account. I spend some, and i save some (well, i could never ever do the latter when i lived in england...).
I'll not go into debt at the minute.
So, to me, issuing a bill is when a company prints it and it is released into the human world.
Issuing a bond i'm guessing is when the bank gives me a load of money and asks me to pay it back plus some extra for them lending it me.
So, if i'm still on target, if a very nice and generous government came about, and they decided to simply print a whole load more money than normal and just distribute it to the people, bypassing banks, how would this impact on banks?
I then surmise that banks run our world rather than governments. And since a bank is just an object, i must conclude that bankers run our world, not politicians who form governments.
I hope you both can accomodate my layman approach to this subject, phil too. I actually believe that your energies would be worthwhile, because more of us would like to know how the fuck this all works!
I hope i can sustain a sort of mini-thread within a thread, just for us non-economists!
Incidentally i'm going to wade my way through all those excellent looking links, but if you clever lot can get into teacher mode, all the better for me.
[i am a teacher, and it ain't an easy job to get others to understand what you already understand, but it's always a nice challenge for the brain.]
[i am a teacher, and it ain't an easy job to get others to understand what you already understand, but it's always a nice challenge for the brain.]
Bob_the_lost
Elsewhere
And you know that your choice of words is counterproductive and disruptive. Everyone else can manage, you're not that special.phildwyer said:
You seem to have ignored the component of that response that deals with your inital question: Why is the issue treated with contempt? (Partially) Because you make it look worthy of such.
A Dashing Blade
Takes horses to water but can't make donkeys drink
Jazzz said:
Er, no there isn't.
"Bills" are debt instruments which, when issued, have a maturity of less than with less that 1 year / 18 months. They are normally issued at a discount to redemption value and pay no coupon ie they are issued at the net present value of 100 in (say) 1 years time. Thus thy may be considered to be zero-coupon bonds (you may also model them as bonds with a long first coupon payment but that will f**k up your asset swap spreads). They are generally issud to manage "short term" monetary flows.
"Bonds" generally pay a coupon annually (dollar & euro bonds) or semi-annually (sterling & ex-commonwealth) and can have maturities out to 50 years.
Variations on a theme would, for example be FRN's (Floating Rate Notes) whose coupon gets reset every three months against the current 3 month libor/euribor (whatever) rate, inflation bonds whose where the coupon is inflation + a small amount, callable bonds, amortising bonds etc etc etc
There is no differencer at all "between money created by the government in the form of bills, and that produced by bank loan (of which government bonds are a form)" and indeed, Govvie bonds are not a form of bank loan (actually they are the exact reverse)
A bond/bill is simply an IOU. The coupon (interest paid) or discount price depends on the credit rating of the issuer (Government or Corporate) vis a vis the risk free rate at maturity of the redemption currency.
Any further questions please don't hesitate etc.
littlebabyjesus
one of Maxwell's demons
Just to clear something up - sorry if I'm a bit slow.
The Bank of England (and other banks as well?) creates the money in circulation, but it only lends that money at its base rate. This is the only way money gets itself into circulation.
If the above is true, then where do the BoE's profits go? As it must make huge profits, surely.
The Bank of England (and other banks as well?) creates the money in circulation, but it only lends that money at its base rate. This is the only way money gets itself into circulation.
If the above is true, then where do the BoE's profits go? As it must make huge profits, surely.
ViolentPanda
Hardly getting over it.
littlebabyjesus said:
The profits go to the owners.
littlebabyjesus
one of Maxwell's demons
In which case, are we allowed to look at the annual accounts? I'm also a member/owner of the Nationwide, and they send me their accounts.ViolentPanda said:The profits go to the owners.
A Dashing Blade
Takes horses to water but can't make donkeys drink
littlebabyjesus said:
"Base rate" (aka Libor = London Interbank Offered Rate) is a 3 month interest rate expressed as an annualised percentage. It is the indicative rate at which banks lend money between themselves. To micro-manage liquidity, the BoE can borrow or lend money (usually at overnight rates, but wise if we leave yield curve construction for another day).
A Dashing Blade
Takes horses to water but can't make donkeys drink
nino_savatte
No pasaran!
phildwyer said:
Isn't it? Money-lending was one of a handful of occupations permitted to Jews in the pre-industrial era.
littlebabyjesus
one of Maxwell's demons
Sorry, still being thick.
Is lending money at interest the only way money comes into existence?
Also, how does one register oneself as a bank and start creating some money to lend out? I'm bored of working for a living.
Is lending money at interest the only way money comes into existence?
Also, how does one register oneself as a bank and start creating some money to lend out? I'm bored of working for a living.
Money is a tricky thing to get hold of, and there are various definitions. But basically there's notes and coins in circulation as the most basic and limited (and most liquid) definition), moving onto current accounts, then time and savings accounts, then less liquid investments including bonds, bills etc. So no, lending money at interest is not the only way of creating money.
The BoE can't just print money as much as it likes, because you tend to get inflation in that situation (too much money chasing too few goods), it's actually a very fine balancing act.
The BoE can't just print money as much as it likes, because you tend to get inflation in that situation (too much money chasing too few goods), it's actually a very fine balancing act.
A Dashing Blade
Takes horses to water but can't make donkeys drink
slaar said:
And loses money when those banks have excess liquidity and lends it to the BoE overnight.
slaar said:
No, hang on a minute. That's what i was always told when i was at school and any time thereafter that i tried to get my head around this: that inflation would come about if we just printed more money to make more available to the people.
I never got it then, nor do i now. This inflation answer i mean.
Y'see there is a negative amount of money (debt) buying an awful lot of goods. Most goods have been bought without the owners having enough money of their own. Doesn't inflation come from spending money you haven't got?
And back to my original question: why has dope never been subject to inflation? Compare the average cost of a pint, a house, and the average worker's salary in 1982 to 2007. Then realise that dope is the same.
There's a lot of dodgy stuff put out in economics i reckon. However much anybody explains, it never sounds right to me.
And slaar, another question (i read on this thread that you're some kind of economist?):
What if the banks were instructed to call in all their loans from all their debtors in exactly one week's time. And in that same time companies were instructed to print loads of extra bank notes. These were then distributed to the people with the condition that they took just enough to pay off their debts.
Then on the appointed day, the banks got all their money back, the people lost all their debts, and we could all start again.
Where does inflation come into this scenario? And if the government has to pay a lot of money to the printing companies, then just use the taxes collected from the people.
What if the banks were instructed to call in all their loans from all their debtors in exactly one week's time. And in that same time companies were instructed to print loads of extra bank notes. These were then distributed to the people with the condition that they took just enough to pay off their debts.
Then on the appointed day, the banks got all their money back, the people lost all their debts, and we could all start again.
Where does inflation come into this scenario? And if the government has to pay a lot of money to the printing companies, then just use the taxes collected from the people.
Blagsta said:
Blagsta, it don't help when those who apparantly know call it all simple. It might be to you, but it ain't to others. What is not so simple is explaining it to those to whom it is not so simple, so obvious.
You got it in you to explain to me why the money would be worth less? After all, how can a fifty pound note be worth less when the numbers don't change?
Crispy said:
No there won't. There hasn't always been 'economics.' In fact there has only been 'economics' for a century (before that it was 'political economy,' a very different concept), and the idea that 'economic' activity is a discrete field of human behavior is only three centuries old. The concept of 'economics' is a capitalist ruse, designed to exempt market behavior from ethical strictures.
Another question on this inflation thing, and i guess it's on-topic coz in my book it seems to me that it is not just subject to economics, but also political control, or is it even linked to interest charged on money?
In 16 years, the cost of renting a place to live, either a house or an apartment here in thailand has risen by zero percent inflation. What's been the equivalent in 16 years in britain? And why the difference? Same goes for the basic cost of a plate of food in the local market place. Beer and fags have only gone up by any extra taxes added to them by political policy.
Does the central bank decide upon inflation?
In 16 years, the cost of renting a place to live, either a house or an apartment here in thailand has risen by zero percent inflation. What's been the equivalent in 16 years in britain? And why the difference? Same goes for the basic cost of a plate of food in the local market place. Beer and fags have only gone up by any extra taxes added to them by political policy.
Does the central bank decide upon inflation?
phildwyer said:
Aha, now that makes innate intuitive sense to this economics layman!
Britain is far more a capitalist country than thailand. Does this explain why inflation has had such a negligible effect here compared to Britain in the time frame i've just mentioned?
And does it also explain that an illegal substance, and thus untaxable, has been immune from inflation in britain in 25 years?
Bob_the_lost said:
No, the issue is treated with contempt because people have internalized capitalist assumptions to the degree that they look 'natural,' and so they perceive any challenge to those assumptions as insanity or conspiraloonery. My choice of terminology is instructive not disruptive: I use the language that was used of capitalism for thousands of years, because it is important to understand that it was universally understood as the work of the devil. If many people today are so naively literalistic that their understanding is stymied by the belief that Satan 'does not exist,' that is not my problem.
littlebabyjesus
one of Maxwell's demons
How have wages fared in that time?fela fan said:
In Cuba, with its centralised economy, there is no inflation, officially, and people are paid the same now as they were forty years ago. Prices go up when times are bad and come back down as times improve. Well, this is the official position.
In reality, in bad times, goods simply disappear from the shops so you are left with money in your pocket that you cannot spend. Also, the quality of goods goes down as people who are struggling to make ends meet steal from their work. Better quality goods then start to appear on your doorstep priced many times more than in the shops in the black economy.
Now, of course, the country effectively has a dual economy - the ruins of the autarky and the dollar economy linked to the rest of the world.
I don't know what the implications of this double economy are for the country's inflation.
nino_savatte
No pasaran!
phildwyer said:
Er, but it can be used in that way. Furthermore because the Jews were restricted to certain forms of economic activity and were coralled into ghettoes, this reinforced their Otherness. The Other is always regarded with suspicion and, more often than not, form the butt of the conspiracy theories of the dominant culture/ideology.
Money lending, iirc, is forbidden by the Xtain bible, This automatically makes Jewish people inherently 'evil' in the eyes of Xtians. This attitude persists to this day.
kyser_soze
Hawking's Angry Eyebrow
Is phil arguing once again for a rejection of the Enlightenment and return to Platonist values by picking on one aspect of the Enlightenment/modernity - the labelling and classification of human activity concerning exchange of G&S as economics and how this terrible calumny called capitalism has resulted, and completely ignoring the 000s of years previous to this with individual treatise on price movements, the existance of interest/usury since humans first started exchanging goods for services (there are records of interest being levied in barter societies for the loaning of cattle on the surplus derived from use of said bovines)...also, how Eurocentric is this? The Chinese have had interest as well as money for millenia...which would also suggest that capitalism has been around for millenia as well, just not as the dominant social force (which back in the day was usually a combination of religion and demagogic idolatry - something Plato was very much in favour of as well...)
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