"Banks create money out of nothing" - Guardian

[littlebabyjesus]

Hurrah and Greebo, how many times have you both been told not to encourage little cesare when his "little difficulty" with reading and writing gets him all riled up and he feels the need to use naughty words, like "knob" , "cunt" , "poo"", or "gove". Just ignore him and eventually he'll grow out of it.

I've never studied economics for any exam, but I wouldn't put too much confidence in o or a levels. Even degree level economics appears to teach quite a bit of highly questionable stuff. These are often contested areas in which the received 'wisdom' is not wisdom at all, but utter foolishness. And some of the biggest fools are the most 'qualified' economists, whose qualifications don't stop them getting things spectacularly wrong.

I have my disagreements with love detective, but he also talks a lot of sense. If what he says would fail exams, the problem is with the exams, not ld's analysis.

 

[camouflage]

You have switched from talking about a picasso operating as money to IOUs operating as money. They're two very different things. And no wheat has not become the universal equivalent in your example - it's become a component part of one exchange. Exchange with money implies a chain of others transactions centring on money - that cannot happen with wheat, the idea is ludicrous.

With Picasso I am remarking on the subjective nature of 'value', and these subjective judgments of value can then be become universal exchange tokens used to transact things like food, energy, iron ore etcetera. We can subjectively assign value to anything and then attach exchange value to it. If Picasso were alive today and someone was selling future-Picasso-painting-tokens endorsed by the artist himself, any amount of new 'money' could be made to appear today. Isn't that what T-bills are? A stake in the future out-put of American tax-paying labour?

Your problem seem to be that you do not understand that money is the money-form of value - and so has certain properties peculiar to it (i.e that it acts as the universal equivalent). Wheat or paintings are the commodity-form of value - and these have their own properties (i.e that they contain more value then went into their production) that are different from the money-form of value.

I don't agree that I don't understand that, I tackled the difference without reading Marx back when I got obsessed with um... never mind. The main thing is that Marx had opinions and insights that are worth discussing. Opinions and Insights, Marx did not generate the nature of truth or something.

Something having value does not make it money.

No, but something having value is a basis on which money can be made. In my wheat-farm example a whole back-story appeared that I neglected to share (my bad), essentially a world where money was based on tokens representing food-staple production, where everyone from engineers to prostitutes used farmers iou's as money. Now I think about it I may be describing a kind of Regressionist theory of money *shudder* Anyway the tokens theselves cannot be eaten, they are just tokens, they are ot the wheat. They are however useful for measuring wheat, and measuring everything else.

 

[butchersapron]

With Picasso I am remarking on the subjective nature of 'value', and how though a subjective judgement of value they can then be exchanged for these universal exchange tokens for things like food, energy, iron ore etcetera. We can subjectively assign value to anything and then attach exchange value to it. There are I am sure processes by which value can be magiced up and exchange value derived from that. If Picasso were alive today and someone was selling future-Picasso-painting-tokens endorsed by the artist himself, any amount of new 'money' could be made to appear today. Isn't that what T-bills are? A stake in the future out-put of American tax-paying labour?

You said a picasso could act as money - you didn't say it could act as value. I have pointed out that it can act as the commodity-form of value, not as the money-form of value (a situation which is dependent on there being a money-form of value that the picasso isn't)

I don't agree that I don't understand that, I tackled the difference without reading Marx back when I got obsessed with um... never mind. The main thing is that Marx had opinions and insights that are worth discussing.

You don't understand it.

No, but something having value is a basis on which money can be made. In my wheat-farm example a whole back-story appeared that I neglected to share (my bad), essentially a world where money was based on tokens representing food-staple production, where everyone from engineers to prostitutes used farmers iou's as money. Now I think o it I may be describing a kind of Regressionist theory of money *shudder*

Making money out of something is entirely different from that thing being money.

 

[littlebabyjesus]

Hmmm. Isn't the point that money isn't really 'based on' anything. In the past props like gold have been used to give the appearance that it's based on real things, but really that's just a show to give confidence. For instance, if your food-tokens are exchanged for the food they represent, the money disappears. For a money system, you need something essentially useless but still valued, like gold. But really, you don't need anything at all.

 

[camouflage]

You don't understand it.

I understand how notional crypto-tokens 'backed' by nothing than the volume of trade in them can be real money, and giggled at some people who couldn't understand this idea and only consider money real if it's made of shinny metal they can hold in their hand. Is that the same thing?

 

[butchersapron]

I understand how notional crypto-tokens 'backed' by nothing than the volume of trade in them can be real money, and giggled at some people who couldn't understand this idea and only consider money real if it's made of shinny metal they can hold in their hand. Is that the same thing?

No.

 

[camouflage]

No.

Ok then, what do you understand the difference to be?

 

[butchersapron]

Ok then, what do you understand the difference to be?

The difference between the two forms of value that i just posted about? You could have a look at the posts i made about them i suppose.

 

[butchersapron]

Have we got this clarified yet then - you no longer think that a painting or a a bag of wheat can act as money?

 

[camouflage]

Have we got this clarified yet then - you no longer think that a painting or a a bag of wheat can act as money?

I never said that, I said abstractions representing [a bag of wheat anyway] could be used as money. And from there could be extended to represent anything that people might wish to buy and sell. Then I realized I was talking suspiciously close to something called Regression Theorem, a favourite of Von Mises types, this gave me pause, and then concern.

I wish to repose for awhile, and consider my position.

 

[butchersapron]

Yes you did.

I think that part of this is that all sorts of silly bits of paper can be passed around ad used as money. It occurs to me that money has always been primarily produced outside of government. Sure M1, 2 and 3 might be relatively easy for states and central banks to control or measure... actually I wander, can a Painting be considered money? The art-market is as susceptable to bubbles as the property market isn't it? If during good-imes a Piccaso can reliably be exchanged for a number of US iou's, does that make a Piccaso also a form of money?

Money is difficult to control by anyone, I beleive gold-freaks for instance are obsessed wth the idea of controlling money as if they are aristocrats obsessed with maintaining control of land and title.

And you then followed it up with the wheat example (which you then confused with IOUs).

 

[camouflage]

Actually iirc, I wasn't talking about bags-of-wheat, but rather future-bags-of-wheat. Meaning that money tied to real assets that don't actually exist yet can be created, (as if from future-thin-air).

 

[camouflage]

Yes you did.



And you then followed it up with the wheat example (which you then confused with IOUs).

ah, you're right, I asked if a painting could be used as money.

I now suppose sort of, in a way. It can be used in an exchange and as a means of storing 'value'. Money is used for the same purposes, but I think you're right, this doesn't mean the painting and 'money' are the same thing.

A painting is just one example though, as are promises of future output. All sorts of things can be used for parts of what money is used for, some of those things fucntion better than others. At the end of the day it's about liquidity, there are things that are not quite money but are very liquid, and the economy can become full of the use of these things. Finance can be full of all sorts of paper, much of it liquid and much of it as good as money (at least in terms of raising credit/debt). Either way when the bubble bursts it all falls down in the same way. That's what I'm getting at.

 

[butchersapron]

Actually iirc, I wasn't talking about bags-of-wheat, but rather future-bags-of-wheat. Meaning that money tied to real assets that don't actually exist yet can be created, (as if from future-thin-air).

You were talking about real Picasso's though. And you now think that your example was wrong?

You're now confusing fictitious-capital and it's properties (i.e being based on expectations of future surplus-value production or redistribution of existing value) with the money-form of value. Go repose.

 

[camouflage]

You were talking about real Picasso's though. And you now think that your example was wrong?

You're now confusing fictitious-capital and it's properties (i.e being based on expectations of future surplus-value production or redistribution of existing value) with the money-form of value. Go repose.

Yes, Marx was certainly an interesting fellow, I wish he were alive today to post on this forum, unfortuanetly he isn't. His thoughts will echo through the ages.

 

[butchersapron]

Marx has nothing to say as your attention span is 35 minutes. And he has nothing to say precisely at a period when the growth of fictitious capital has caused two related crisis and brought on global austerity. Thorough refutation.

 

[camouflage]

Marx has nothing to say as your attention span is 35 minutes. And he has nothing to say precisely at a period when the growth of fictitious capital has caused two related crisis and brought on global austerity. Thorough refutation.

I disagree, I think you have nothing to say, I've not read an original thought from you er... ever actually. You write a lot of Marx and then admit that he has nothing to say about todays situation, then you talk more Marx.

 

[butchersapron]

Astonishing. Danger of podcasts once more.

 

[camouflage]

Astonishing. Danger of podcasts once more.

Podcasts now?

You remind me of this time by the Thames, there I was enjoying a pleasant spliff and gazing thoughtfully across the glittering water when all of a suddenly this old derelict comes wabbling up to me waving a can of Stella and babbling nonesenses. Eventually he wondered off though.

 

[butchersapron]

Come on. This confused lightweight nonsense is no good to anyone. Stick to just googling 'banks' - or have your repose and come back when you've had a think about the points put to you.

 

[revol68]

I disagree, I think you have nothing to say, I've not read an original thought from you er... ever actually. You write a lot of Marx and then admit that he has nothing to say about todays situation, then you talk more Marx.

Did you really miss the sarcasm in that post?

 

[camouflage]

Did you really miss the sarcasm in that post?

yes, I suppose so.

On the reread I guess I missed it because my preceeding point wasn't that Marx has nothing to say...

 

[camouflage]

Come on. This confused lightweight nonsense is no good to anyone. Stick to just googling 'banks' - or have your repose and come back when you've had a think about the points put to you.

Well I enjoy it, what appeals to me more and more about my opinions is the way they annoy you, that if nothing else makes all the difference as far as I'm concerned.

 

[butchersapron]

Well I enjoy it, what appeals to me more and more about my opinions is the way they annoy you, that if nothing else makes all the difference as far as I'm concerned.

They annoy me in the way that lazy idiocy does - it's not so much the content as shitness of the method. You've made clear you have nothing to say on anything that takes a bit of time - that doesn't annoy me. So, have your repose and come back.

 

[camouflage]

They annoy me in the way that lazy idiocy does - it's not so much the content as shitness of the method. You've made clear you have nothing to say on anything that takes a bit of time - that doesn't annoy me. So, have your repose and come back.

My method, hmm, I take in information in a casual driveby kind of way, I draw some conclusions, some observations, share them with others on internet forums or conversations with friends. I guess you could call it- forming my own opinions... yeah. Happily I'm not here writing a dissertation or academic paper of any kind so my standards are comfortable rather than rigorous (I got other shit to do man). It's good enough for my purposes. I can see you are affronted that people have opinions. Not my problem fella.

 

[butchersapron]

My method, hmm, I take in information in a casual driveby kind of way, I draw some conclusions, some observations, share them with others on internet forums or conversations with friends. I guess you could call it- forming my own opinions... yeah. Happily I'm not here writing a dissertation or academic paper of any kind so my standards are comfortable rather than rigorous (I got other shit to do man). It's good enough for my purposes. I can see you are affronted that people have opinions. Not my problem fella.

I'm glad you have opinions. It's just a shame they're so shit and ill-informed. if ever a bit of rigour was required i think right about now would be it. But no, it's all good, it's all the same. They love you.

 

[camouflage]

I'm glad you have opinions. It's just a shame they're so shit and ill-informed. if ever a bit of rigour was required i think right about now would be it. But no, it's all good, it's all the same. They love you.

Well, that's just... your opinion, man.

who are 'they' anyway, the voices in your head?

 

[Random]

What, specifically, is he wrong about?

That banks create money from nothing. They may create money, but in a dependent role, as LD says. So it's not from nothing. Which changes the whole importance of this fact, from "OMG bankers are the secret rulers of the WORLD!" to "banks play a role in circulating money".

 

[camouflage]

That banks create money from nothing. They may create money, but in a dependent role, as LD says. So it's not from nothing. Which changes the whole importance of this fact, from "OMG bankers are the secret rulers of the WORLD!" to "banks play a role in circulating money".

Banks are wealth creators, lol.

 

[butchersapron]

Depth, depth and more depth.