Originally posted by Doggy Styles
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Bankers save the world.
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Originally posted by Doggy Styles View PostI don't suppose anyone here could do a better job.
In a more open and honest fashion without stealing money - more than likely yes!Comment
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Originally posted by petergriffin View PostThe uneducated plebs put the blame on central banks and QE, while the real culprit is fractional reserve banking. Only 3% of new money is created by the Bank of England, the rest is created by banks out of nothing when they give loans.
They weren't instituted to directly create money as that may even be against the constitutions of some governments, but to provide the stability required for FRB to take off. Furthermore, they actively - indirectly - purchase government debt and other 'assets'. They also provide lending to banks at low rates and act as a lender of last resort. So how do they escape blame exactly when they are required for FRB to be stable?Comment
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Originally posted by Zero Liability View PostRofl
They weren't instituted to directly create money as that may even be against the constitutions of some governments, but to provide the stability required for FRB to take off.
One needs to understand the difference between money and currency. QE has only marginally increased the monetary base. If used properly, QE could have been a good tool, for example printing money and giving it directly to the people.
Fractional reserve banking - Wikipedia, the free encyclopedia
Because bank deposits are usually considered money in their own right, fractional-reserve banking permits the money supply to grow beyond the amount of the underlying reserves of base money originally created by the central bank.
Commercial [i.e. high-street] banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.<Insert idea here> will never be adopted because the politicians are in the pockets of the banks!Comment
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Originally posted by petergriffin View PostThat's not how money creation works. Central banks can only create currency, but banks can create money directly through the accounting they use when they make loans.
One needs to understand the difference between money and currency. QE has only marginally increased the monetary base. If used properly, QE could have been a good tool, for example printing money and giving it directly to the people.
Fractional reserve banking - Wikipedia, the free encyclopedia
http://www.bankofengland.co.uk/publi...ion.pdf#page=1
Plus - from the BoE website:
Quantitative easing (QE) is an unconventional form of monetary policy where a Central Bank creates new money electronically to buy financial assets, like government bonds.Comment
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Originally posted by Zero Liability View PostThey also provide lending to banks at low ratesComment
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Originally posted by OwlHoot View Post...
Drat, I've hit my Telegraph 20 article monthly limit
Bastards!Comment
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Originally posted by petergriffin View PostThat's not how money creation works. Central banks can only create currency, but banks can create money directly through the accounting they use when they make loans.
One needs to understand the difference between money and currency. QE has only marginally increased the monetary base. If used properly, QE could have been a good tool, for example printing money and giving it directly to the people.
Fractional reserve banking - Wikipedia, the free encyclopedia
http://www.bankofengland.co.uk/publi...ion.pdf#page=1
It's still open to abuse now but obvious it is not. Nothing I mentioned requires direct money creation barring asset purchases, and even those are done via the intermediation of private banks.Comment
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