AuthorTopic: Da Fed: Central Banking According to RE  (Read 51092 times)

Offline John of Wallan

  • Waitstaff
  • ***
  • Posts: 396
    • View Profile
Re: Da Fed: Central Banking According to RE
« Reply #315 on: December 23, 2019, 12:20:46 AM »
So RE, you know more about this than any person I would know(being a former denizen of Wall Street). Explain what is happening in the Repo Market. I've read/heard that the BIG banks are scared to loan money in the repo market because they know someone/thing (one of their fellow banks) is not very stable and they don't want to be holding the bag (so to speak) when the next AIG goes down. Someone said that the big banks are sitting on huge excess reserves that could fund the Repo market but they don't want to lend. Also heard that the Repo Market is just a way for banks and hedge funds to make (skim) money from these overnight (and somewhat longer) trades and that by the Feds' injections this just guarantees profits for the big players.
Thanks,
AJ

I think I did an explanation a while back, but I'll try to clarify with a metaphor.

The Repo Market is connected to the overnight lending between banks.  It's usually low risk lending, but when everybody is scared somebody else is gonna take a dive but they don't know WTF it is, they curtail this lending.  It's like Engine Oil, it greases the cylinders of the economic engine.  What happens when your engine runs low on oil and you keep driving the car?  It seizes up, that's what happens.

So, to avoid this seizure of lack of oil, Da Fed is pumping more oil into the engine every day, which reduces the risk for the individual TBTF Banks.  However, when the big Unknown SOMEBODY goes Tits Up one day, Da Fed will take the hit, and then by extension the Taxpayers will take it.  At currently between $80B and $120B per day in overnight lending, the day this happens you the taxpayer lose ~$100B.  Then you have the issue of a cascade failure, when one of them buys the farm, the derivatives, aka CDS or Credit Default Swaps kick in, and BANG, another onee Bites the dust.  So Da Fed and the Taxpayers could easily end up with a bill much larger than that, in the $1Ts.

RE

So, 2 questions:
1. When, if ever, will the US dollar go hyper inflation like Zimbabwe?
I cant see how money printing forever can end any other way, and I cant see a problem that Da Fed wont just throw more money at, just like current REPO issues..

2. Will US ever once agin become a capitalist society rather than the current hybrid, with Government bailouts for failed companies, which sounds (Shock horror!) an alful lot like socialism?....
Cant see where bailing out the "Too big to fail" fits in with a capitalist society....

Then again what would I know?
I'm just a pinko, freedom lacking, free health care welfare state enjoying, high taxed, god and gun hating, communist Australian. Apparently. 

Comrade JOW.

Offline John of Wallan

  • Waitstaff
  • ***
  • Posts: 396
    • View Profile
Re: Da Fed: Central Banking According to RE
« Reply #316 on: December 23, 2019, 12:30:49 AM »
https://thenewdaily.com.au/finance/consumer/2019/12/22/rba-rates-increase-decrease-pain/

We have record low interest rates here also. All it is doing is blowing the housing bubble bigger. I would not be able to afford to buy my house today if I had to!
All it is doing is inflating peoples purchasing power away as assets inflate while paying very low interest rates on deposits.

I am sure it will end badly shortly...

JOw

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41399
    • View Profile
Re: Da Fed: Central Banking According to RE
« Reply #317 on: December 23, 2019, 02:07:22 AM »

So, 2 questions:
1. When, if ever, will the US dollar go hyper inflation like Zimbabwe?
I cant see how money printing forever can end any other way, and I cant see a problem that Da Fed wont just throw more money at, just like current REPO issues..

Well, I have answered this question any number of time in the Hyper Inflation vs. Deflation thread.  It's a Sticky Thread on the Economics Board, and one of our logest running threads, going back to the very beginnings of the Diner.  It's Book Length easily in word count from numerous contributors, some of whom think it will Inflate.  I am a DEFLATIONIST.

The short answer here is it won't as long as it maintains status as World Reserve Currency.

Another currency BESIDES the Dollar would have to become "more trustworthy" for hyper inflation to occur.  But there is no such currency at the moment.  The Ruble and Renminby have a LOOOONG way to go before the BIS would make them the WRC, and all the Western Currencies like the Euro, the Swissie, the Loonie and the Oz Dollar are all measued in their value against the Amerikan Dollar.  They stand ZERO chance of becoming the WRC.

This is my math analysis speaking, I originally came on the net in the Collapse Blogosphere with the handle "Rogue Economist".  Only a few of us were in the Deflation camp back in 2008. Me, Nicole Foss and Steve Ludlum were about it.


Quote

2. Will US ever once agin become a capitalist society rather than the current hybrid, with Government bailouts for failed companies, which sounds (Shock horror!) an alful lot like socialism?....
Cant see where bailing out the "Too big to fail" fits in with a capitalist society....

It has NEVER been a "Capitalist" society.  It has always been a PLUTOCRACY run by the RICH and for the RICH

Quote
Then again what would I know?
I'm just a pinko, freedom lacking, free health care welfare state enjoying, high taxed, god and gun hating, communist Australian. Apparently. 

Comrade JOW.

Glad to hear that JoW.  I am as RED as you get, about 10 degrees to the Left of Che Guevara. lol


RE
« Last Edit: December 23, 2019, 03:16:36 AM by RE »
Save As Many As You Can

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 19406
    • View Profile
Re: Da Fed: Central Banking According to RE
« Reply #318 on: December 23, 2019, 06:04:43 AM »
There is an interesting thing happening with money that almost no one is noticing.

Crypto savings accounts in "stable coins" (dollar proxies) are paying as high as 8% while banks are paying 2%. If the general public ever figures that out, it's going to cause some problems, since savers can now get a very good return for what looks to be only slightly more risk than a bank deposit. A return savers really need, one that has been eliminated by the endless QE the banks are using to delay.prevent the crash

This represents a coming collision between the Rockefeller/Rothschild banking monopoly and the new bitcoin billionaires who are moving quickly towards the future. I'm not sure how it ends, frankly. I do believe this is why we hear so much negative blowback form the Fed and the US Treasury trying to link digital assets with drug dealing and crime.

As I see it, the banks either wise up and get onboard.....or they try to use their immense power to legislate cryptos right out of existence and replace it with the own vision of centralized digital money.

As some people (notably John McAffee) point out, the genie is out of the bottle. They can make crypto illegal, but they can no more stop it than they can stop people from smoking cannabis. The rise of decentralized exchanges where P2P and B2B crypto transactions can occur with or without the approval of various authorities, is pretty much here, although it hasn't taken over the trade.
What makes the desert beautiful is that somewhere it hides a well.

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 19406
    • View Profile
Re: Da Fed: Central Banking According to RE
« Reply #319 on: December 23, 2019, 07:26:59 AM »
There is an interesting thing happening with money that almost no one is noticing.

Crypto savings accounts in "stable coins" (dollar proxies) are paying as high as 8% while banks are paying 2%. If the general public ever figures that out, it's going to cause some problems, since savers can now get a very good return for what looks to be only slightly more risk than a bank deposit. A return savers really need, one that has been eliminated by the endless QE the banks are using to delay.prevent the crash

This represents a coming collision between the Rockefeller/Rothschild banking monopoly and the new bitcoin billionaires who are moving quickly towards the future. I'm not sure how it ends, frankly. I do believe this is why we hear so much negative blowback form the Fed and the US Treasury trying to link digital assets with drug dealing and crime.

https://www.coindesk.com/fiat-to-crypto-carry-trade-may-tempt-traders-tired-of-negative-interest-rates

Nexo, Celsius, Binance, and Bitrue are all paying high interest for savings held in stablecoins like  Tether  and USDC. USDC, in particular, looks like a very safe bet, as it is backed by the US's leading exchange (Coinbase) and has decent liquidity. Tether, perhaps not a securely collateralized, is still the most widely used stablcoin and the favorite of the bitcoin whales. I don't consider Tether to be safe.

As I see it, the banks either wise up and get onboard.....or they try to use their immense power to legislate cryptos right out of existence and replace it with the own vision of centralized digital money.

As some people (notably John McAffee) point out, the genie is out of the bottle. They can make crypto illegal, but they can no more stop it than they can stop people from smoking cannabis. The rise of decentralized exchanges where P2P and B2B crypto transactions can occur with or without the approval of various authorities, is pretty much here, although it hasn't taken over the trade.
What makes the desert beautiful is that somewhere it hides a well.

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41399
    • View Profile
The inverting yield curve is about more than recession this time
« Reply #320 on: January 31, 2020, 05:56:38 AM »
https://www.msn.com/en-us/money/markets/the-inverting-yield-curve-is-about-more-than-recession-this-time/ar-BBZu7bK

The inverting yield curve is about more than recession this time
13 hrs ago


A key slice of the U.S. yield curve inverted on Thursday for the first time since October, reviving memories of growth fears that plagued investors last year and signaling doubts that the Federal Reserve will succeed in reviving inflation.

FILE - In this Tuesday, Aug. 13, 2019, file photo trader Andrew Silverman works on the floor of the New York Stock Exchange. The threat of a recession doesn’t seem so remote anymore, and stocks sank Wednesday after the bond market threw up one of its last remaining warning flags on the economy’s health.© ASSOCIATED PRESS FILE - In this Tuesday, Aug. 13, 2019, file photo trader Andrew Silverman works on the floor of the New York Stock Exchange. The threat of a recession doesn’t seem so remote anymore, and stocks sank Wednesday after the bond market threw up one of its last remaining warning flags on the economy’s health.

The gap between the yield on three-month and 10-year Treasuries at one point slipped to as low as minus 2 basis points on Thursday. The spread -- seen by some as a warning signal because it has inverted before each of the past seven U.S. recessions -- last reached those levels as economic conditions deteriorated at the height of the trade war.
Drop in longer dated yields inverts 3-month, 10-year spread© Bloomberg Drop in longer dated yields inverts 3-month, 10-year spread

With the coronavirus outbreak threatening to disrupt the Chinese economy, concerns about the business cycle are undoubtedly a factor. But more important still are emerging doubts over the ability and commitment of policy makers to shore up growth and spur inflation.

The inversion has deepened since Chairman Jerome Powell and colleagues kept rates unchanged this week and signaled they would pull out all the stops to combat a global disinflationary downdraft.

Following his press conference Wednesday, fed funds futures showed increased conviction by traders that a cut is coming this year, although they continue to price in just one quarter-point reduction. Meanwhile, inflation-linked debt markets are expressing doubts that price pressures will increase, with so-called breakeven rates slipping in the wake of Powell’s comments.

“The bond market is basically telling the Fed that it hasn’t done enough and will be called back to do more and that the longer they wait the more they will have to do,” said Michael Darda, market strategist at MKM Partners. “If the bond market thought Powell’s comments on wanting higher inflation were credible in his press conference, you wouldn’t have seen break-even inflation rates falling as they did.”

Related video: Why investors are obsessed with the yield curve (provided by WSJ)


A measure of core U.S. inflation released Thursday showed price pressures slowed to an annualized 1.3% in the fourth quarter from 2.1%, a weaker figure than analysts had expected.
Derailed Optimism

The yield curve has historically reflected the market’s sense of the economy, particularly about inflation. Investors who think inflation will increase typically demand higher yields to offset its effect. Because price growth usually comes from a strong economy, an upward-sloping curve generally means that investors have upbeat expectations.

The spread of the deadly virus from China has derailed new-year optimism among investors and thrown a spotlight on the ability of policy makers to handle a downturn. Merian Global Investors reckons the market is screaming for more easing. Societe Generale SA expects a 100-basis-point drop in the policy rate this year.

“People are looking for some form of safety and buying Treasuries out the curve is really the only way to do it,”said Nick Maroutsos, co-head of global bonds at Janus Henderson Group Plc. “The Fed has been adamant about pumping as much liquidity into the market as possible. And you could see the Fed try to pump even more in over time if this risk-off scenario continues -- to try to normalize the curve a little bit and bring front-end rates down.”

Falling yields also triggered other market dynamics which are exacerbating the move. Convexity hedging -- when mortgage portfolio managers buy or sell bonds to manage their duration exposure -- is back in play. As yields fall, they make purchases. The yield on 10-year Treasuries dipped as low as 1.53% on Thursday, the lowest since October.

The sequence of a swift drop in yields and curve flattening unleashing convexity-linked forces that re-starts the cycle is a recurring feature of the Treasury market .

A massive wave of convexity-related hedging in the swaps market in March helped send 10-year yields to levels then not seen since 2017. That came after the Fed took an abrupt shift away from policy tightening they had been doing in 2018. The Fed went on to cut rates three times over all of 2019.

Other factors may be at work now as well. Structural demand for long-dated Treasuries -- linked to liability-driven investment and hedging from foreign investors including Taiwanese insurers -- has helped to drive the curve flatter, according to Citigroup Inc.
a close up of a black background: Yield on 10-year Treasuries drops to lowest since October© Bloomberg Yield on 10-year Treasuries drops to lowest since October

Pascal Blanque, the chief investment officer at Amundi SA, said the market shouldn’t read too much into the latest yield-curve inversion.

“We don’t see these recent movements as indicators of a global or U.S. recession, but as an overreaction of financial markets that usually happens under these circumstances,” he said. The Fed’s decision Wednesday suggests that “despite the warning sign, there is no immediate need for further stimulus,” he said.

Still, the death toll from the coronavirus is climbing, and it means investors are likely to remain cautious. The risk of reduced economic activity is raising a chance of rate cuts, according to ING Bank NV.

The inversion “highlights broader market fears that the virus and its human and economic threat could spread,” wrote James Knightley, chief international economist at the bank. “The more that it does, the more likely it starts to alter consumer and corporate behavior, thereby promoting policy action to mitigate the dangers.”

--With assistance from Stephen Spratt.
Save As Many As You Can

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 19406
    • View Profile
Re: Da Fed: Central Banking According to RE
« Reply #321 on: January 31, 2020, 06:05:19 AM »
I wasn't quick to worry about the Coronavirus, because I think this kind of threat can be handled. Especially in China, where the command and control government can just quarantine people and they have no choice but to acquiesce.

However, it does look VERY contagious and fairly lethal, so I don't discount that we might see a lot of dead people before it gets handled.

We will know within a few more weeks whether it's going to be a mass killer. Just have to wait and see.
What makes the desert beautiful is that somewhere it hides a well.

Offline Surly1

  • Administrator
  • Master Chef
  • *****
  • Posts: 18609
    • View Profile
    • Doomstead Diner
Add Coronavirus: The Deceptively Simple Number Sparking Coronavirus Fears
« Reply #322 on: January 31, 2020, 10:47:45 AM »
The Deceptively Simple Number Sparking Coronavirus Fears

Here’s what the oft-cited R0 number tells us about the new outbreak—and what it doesn’t.



When a new disease emerges, health organizations turn to a seemingly simple number to gauge whether the outbreak will spread. It’s called the basic reproduction number—R0, pronounced R-nought—and though useful for decision makers, it’s a nightmare for public communication. In brief, R0 is the average number of people who will catch the disease from a single infected person, in a population that’s never seen the disease before. If R0 is 3, then on average every case will create three new cases. But even though it seems incredibly straightforward, it’s hard to calculate and tricky to interpret.

R0 is important because if it’s greater than 1, the infection will probably keep spreading, and if it’s less than 1, the outbreak will likely peter out. So it offers vital information to organizations and nations as they consider how to respond to an outbreak—such as the one the world is currently experiencing.

In December, a previously unknown coronavirus, now called 2019-nCoV, emerged in the Chinese city of Wuhan. There have been more than 4,500 confirmed cases, the majority of which have been in mainland China. But several dozen cases have been detected in more than 15 other countries, and as the outbreak has spread, so has fear. Public-health researchers have sped to estimate the R0 of the new disease, and as they have shared their findings, this number has fueled several alarmed missives on social media.

In the past week, at least six teams of researchers, along with the World Health Organization, have published estimates of R0 for the new coronavirus. All these groups used different methods, but their results have been mostly consistent, with estimates hovering between 2 and 3. WHO was a little more conservative than the others, with estimates of 1.4 to 2.5. One Chinese team is a clear outlier, with estimates of 3.3 to 5.5. And a British-led group initially published a high average value of 3.8 last week before revising it downward to 2.5 as new data emerged.

In the intervening time, however, some observers seized upon the 3.8 number, with one Harvard doctor describing it as “thermonuclear pandemic level bad” in a tweet that has since been retweeted more than 16,000 times. That’s a dubious interpretation, and here are six reasons why.

First, the R0 estimates for the new coronavirus are in line with those for many other diseases. They’re similar to those for SARS (2 to 5) and HIV (also 2 to 5), and considerably lower than those for measles (12 to 16).

Second, a bigger R0 doesn’t necessarily mean a worse disease. Seasonal flu has an R0 that hovers around 1.3, and yet it infects millions of people every year. SARS had an R0 of 2 to 5 and infected just over 8,000 people. The number is a measure of potential transmissibility. It does not actually tell you how fast a disease will spread.

“People make the mistake of thinking that a high R0 means that you’re inevitably going to end up with a pandemic, and that’s not what it means at all,” says Maia Majumder from Harvard Medical School, who published one of the seven estimates for the new virus. In her view, if the number is higher than 1, we should take the disease seriously. But exactly how high it is beyond that threshold isn’t very informative at this stage.

Why? Because third, R0 is an average. Let’s say the virus has an R0 of 2. This could mean that every single infected person passes the virus to two other people. It could also mean that one infected person is a “super-spreader” who infects 100 people, while 49 infected people infect no one. These two scenarios have radically different implications for what will happen during an outbreak.

Super-spreader events are dangerous for health-care workers, but counterintuitively, they can sometimes be a good sign. They suggest that most infected people won’t actually perpetuate the outbreak, while the most problematic cases “may be more likely to be recognized due to their dramatic nature,” writes David Fisman of the University of Toronto. This attention can mean that control measures are put in place more readily, he explained in a posting to the ProMED email list. Other coronaviral diseases, such as SARS and MERS, involved super-spreader events, although it’s still too early to say if 2019-nCoV will have the same.

Fourth, R0 is not easy to calculate. That’s especially true in the early days of an epidemic, when it’s not even clear how many cases there have been. Some people might have been infected without showing symptoms. Others might not have reported their symptoms to health authorities. Absent clear data on who has the disease, let alone how they’re moving around and interacting with other people, scientists have to calculate R0 by doing complicated simulations using a variety of possible methods. That’s why early estimates can vary so wildly, and why they should be taken with a grain of salt.

Fifth, R0 is not some magical, immutable property of the virus itself. It depends on how likely someone is to be infected after contact with an infectious person, and how often such contact occurs—and these quantities are also affected by how societies deal with a virus. When SARS first emerged, transmission dynamics played out very differently in China and Canada, which is why the virus’s R0 values cover a wide range, from 2 to 5. “In places with good infection control, where you can isolate cases as soon as they happen, you’ll see a lower R0 than, say, in places where an outbreak initially took off,” Majumder says.

The current R0 estimates for the new coronavirus are specific to Wuhan, and mostly to the era before people knew about the virus. New estimates will emerge as the virus spreads to places that are now aware of and watching for it. “Likely, these will all be significantly lower,” says Kristian Andersen, a virologist at the Scripps Research Translational Institute.

Sixth, R0 is not destiny. It is a measure of a disease’s potential. And once nations realize that a new disease exists, they can actively screen for it, check that health-care workers are using proper protection, and instigate quarantines. Even simple steps such as hand-washing might make a difference. All these measures could potentially lower the chances that the virus will spread and ensure that its actual transmission rate—the quantity known simply as R—is less than R0, and ideally less than 1. There are a few reassuring signs: One study suggests that patients are now being isolated just one day after showing symptoms, as opposed to six days after at the start of the outbreak.

None of this should be cause for complacency. The new virus is a serious threat, and the world should absolutely start considering what to do if containment measures fail. But at a time of great uncertainty, people grasp for solid answers, and numbers seem to offer them.

This new virus has emerged at a time when scientists have more avenues than ever for publishing their data and comparing notes. That can be a good thing, since fast and open communication can help bring diseases to heel more quickly. The risk is that a complicated number is released without context into a world that doesn’t know how to think about it. “Getting these R0 values out very rapidly is super important,” Andersen says. “But the way that some people and news outlets have interpreted what they mean … that part is problematic.”
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline azozeo

  • Master Chef
  • *****
  • Posts: 9741
    • View Profile
Da Fed: Ain't worth Ass Wipe
« Reply #323 on: March 27, 2020, 07:38:56 AM »







https://www.theonion.com/u-s-economy-grinds-to-halt-as-nation-realizes-money-ju-1819571322/amp
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Offline moniker

  • Bussing Staff
  • **
  • Posts: 190
    • View Profile
Money and Banking Textbooks All Wrong About Money Creation
« Reply #324 on: May 24, 2020, 08:20:11 PM »
John Titus of the Best Evidence channel recently had a video saying that depositor accounts at commercial banks and commercial bank accounts at central banks are completely unrelated. He described them as comprising "2 different circuits". This was completely different from what I learned in college and graduate school, and if Titus did not present as intelligently as he does I would have not listened to him anymore.

But it turns out he is correct. In a later video he refers to https://www.fairmoney.info/pdf/. On page 12,

The two articles from the Bank of England overturn many cherished beliefs
held by the public. The Bank points out in clear language that:

 Commercial banks create money.
 Commercial banks are not intermediaries.
 The money multiplier has no application in the real world.
 Reserve accounts do not constrain commercial bank lending.
 Excess reserves are not lent to the general public.

The articles should result in swathes of textbooks being withdrawn and
republished with updated chapters. The reality is that this is unlikely to occur
in the foreseeable future.

Economics is haunted by more fallacies than any other study
known to man.

Henry Hazlitt (1894 – 1993)
American journalist
The Wall Street Journal and The New York Times

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41399
    • View Profile
Re: Money and Banking Textbooks All Wrong About Money Creation
« Reply #325 on: May 24, 2020, 08:26:31 PM »

Economics is haunted by more fallacies than any other study
known to man.

Did I ever tell you about how we would make up fake Econ Proofs down in the basement of Havemeyer Hall when we were bored and wasted?  lol.  I am certain to this day some of these joke proofs made it over to the Econ dept and were used for somebody's Ph.D. lol.

I'm not sure Econ is #1 stupid though.  Psych is up there too.

RE
Save As Many As You Can

Offline moniker

  • Bussing Staff
  • **
  • Posts: 190
    • View Profile
Re: Money and Banking Textbooks All Wrong About Money Creation
« Reply #326 on: May 24, 2020, 09:30:29 PM »
Did I ever tell you about how we would make up fake Econ Proofs down in the basement of Havemeyer Hall when we were bored and wasted?  lol.  I am certain to this day some of these joke proofs made it over to the Econ dept and were used for somebody's Ph.D. lol.

I'm not sure Econ is #1 stupid though.  Psych is up there too.

RE
I wouldn't be surprised if someone got the Nobel Prize for one of those proofs!

Offline moniker

  • Bussing Staff
  • **
  • Posts: 190
    • View Profile
Re: Money and Banking Textbooks All Wrong About Money Creation
« Reply #327 on: May 25, 2020, 07:44:38 AM »
John Titus of the Best Evidence channel recently had a video saying that depositor accounts at commercial banks and commercial bank accounts at central banks are completely unrelated. He described them as comprising "2 different circuits". This was completely different from what I learned in college and graduate school, and if Titus did not present as intelligently as he does I would have not listened to him anymore.

But it turns out he is correct. In a later video he refers to https://www.fairmoney.info/pdf/. On page 12,

The two articles from the Bank of England overturn many cherished beliefs
held by the public. The Bank points out in clear language that:

 Commercial banks create money.
 Commercial banks are not intermediaries.
 The money multiplier has no application in the real world.
 Reserve accounts do not constrain commercial bank lending.
 Excess reserves are not lent to the general public.

The articles should result in swathes of textbooks being withdrawn and
republished with updated chapters. The reality is that this is unlikely to occur
in the foreseeable future.

Economics is haunted by more fallacies than any other study
known to man.

Henry Hazlitt (1894 – 1993)
American journalist
The Wall Street Journal and The New York Times
I'm starting to think this may be disinformation from the central bankers in anticipation of imminent total collapse of the banking system. :o

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41399
    • View Profile
Re: Money and Banking Textbooks All Wrong About Money Creation
« Reply #328 on: May 25, 2020, 07:56:38 AM »
John Titus of the Best Evidence channel recently had a video saying that depositor accounts at commercial banks and commercial bank accounts at central banks are completely unrelated. He described them as comprising "2 different circuits". This was completely different from what I learned in college and graduate school, and if Titus did not present as intelligently as he does I would have not listened to him anymore.

But it turns out he is correct. In a later video he refers to https://www.fairmoney.info/pdf/. On page 12,

The two articles from the Bank of England overturn many cherished beliefs
held by the public. The Bank points out in clear language that:

 Commercial banks create money.
 Commercial banks are not intermediaries.
 The money multiplier has no application in the real world.
 Reserve accounts do not constrain commercial bank lending.
 Excess reserves are not lent to the general public.

The articles should result in swathes of textbooks being withdrawn and
republished with updated chapters. The reality is that this is unlikely to occur
in the foreseeable future.

Economics is haunted by more fallacies than any other study
known to man.

Henry Hazlitt (1894 – 1993)
American journalist
The Wall Street Journal and The New York Times
I'm starting to think this may be disinformation from the central bankers in anticipation of imminent total collapse of the banking system. :o

Anything that comes from the WSJ likely comes from the BIS.

RE
Save As Many As You Can

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41399
    • View Profile
🏦 Wall Street expects trillions more in stimulus from the Fed, Congress:
« Reply #329 on: June 09, 2020, 10:02:11 AM »
Privatize the Profits,  Socialize the Losses...the Mantra of Capitalists.

RE

<a href="http://www.youtube.com/v/iXz-nsSwvnA" target="_blank" class="new_win">http://www.youtube.com/v/iXz-nsSwvnA</a>
Save As Many As You Can

 

Related Topics

  Subject / Started by Replies Last post
2 Replies
2571 Views
Last post December 26, 2014, 11:19:47 PM
by RE
1 Replies
1379 Views
Last post July 03, 2015, 05:31:53 PM
by azozeo
0 Replies
808 Views
Last post July 07, 2016, 04:28:57 PM
by RE