Inflation rising, stocks down - end of housing boom?

[AlfredJPruffock]

They don't 'get' money from anywhere. They are allowed to create money from nothing based on the amounts they hold in trust i.e. deposits. Why else do you think inflation exists?

Therefore most of the interest people pay is interest on money that never really existed.

Interesting point N.

Does one need some kind a permit to create money from nothing, it might come in handy.

[DaveB]

They don't 'get' money from anywhere. They are allowed to create money from nothing based on the amounts they hold in trust i.e. deposits. Why else do you think inflation exists?

Therefore most of the interest people pay is interest on money that never really existed.

Interesting point N.

Does one need some kind a permit to create money from nothing, it might come in handy.

Not quite true. The banks leverage the money they have on deposit from customers to provide funds for for lending. They lend at rates above base rate and pay interest at rates below base rate. Shortfalls in liquidity for either are made up by borrowing or lending to the BoE at base rate. Profit all round.

The BoE, licensed by the Govt. is the only entity legally allowed to create money from nothing vial the royal mint. They can increase or decrease the physical money supply by adjusting production.

The "money" that this represents is largely generated by the international markets, based on the arbitrary values put on the commodities traded.

Inflation only occours partially through the availability of excess money in the system. Supply and demand are the main drivers in the economy. e.g. the recent increases in fuel and energy costs being reflected in increasing inflation rates.

[sasguru]

at last,

sasguru is agreeing with the Benes Invoicing Ltd wisdom !

good lad

Milan.

Not exactly as Benes Crapinvoicing Ltd. co. does not yet hold a portfolio of 3 London flats in prime locations, eh?

PS For all of which the existing mortgage is less than 50% of paper value.

SG in smug mode.

[Angela_D]

My (mis)undestanding is that when a central bank wishes to release liquidity to the money circulation then it invites bids for 'lots' of money from commercial banks. The winner (according to criteria of money policy) then 'gets' the money. I don't know if there is any movement or this is an increase in gearing so they can just 'magically' have more money to lend out.

Don't know how major commercial lenders provide cash supply to other banks.

~Maybe there is a super website that explains all this ??

As a good number of folks on this board work in finance we ought to know.

[deforce]

The BoE, licensed by the Govt. is the only entity legally allowed to create money from nothing vial the royal mint.

So, how does the Royal Bank Of Scotland and the Bank Of Scotland fit into this money creation thingy? I've got a Royal Bank Of Scotland tenner in my hand right now...

[AlfredJPruffock]

So, how does the Royal Bank Of Scotland and the Bank Of Scotland fit into this money creation thingy? I've got a Royal Bank Of Scotland tenner in my hand right now...

Good Point D !

And to think the BOE was started by a Jock ...

Speaking of which the Bank Of Pruffock (fully legit Guv) opening celebrations will commence on the 1st of July and readers of CUK forum will be priviliged to a commerative Bank of Pruffock Fiver photocopy for only 100 guineas (plus VAT which is optional if you pay in cash) stand by for further details of this once in a lifetime unique opportunity.

And you may find yourself
Working in a strange foreign city
And you may ask yourself
How do I debug this ?
And you may ask yourself
Where is that lucrative contract ?
After the Moneys gone

Same as it ever was...
Same as it ever was ...

[TheMonkey]

It's all a scam. Bring back trade of real items.

Client: "So that's 2 cows and a horse for a week of your time"
Contractor: "And a guinneapig an hour for travel"

[DaveB]

So, how does the Royal Bank Of Scotland and the Bank Of Scotland fit into this money creation thingy? I've got a Royal Bank Of Scotland tenner in my hand right now...

They are just ordinary clearing banks like the rest of the high street names. The currency is a hangover from when they were national banks. They get it printed at the roayl mint under direction from the BoE.

[stackpole]

It's all a scam. Bring back trade of real items.

Client: "So that's 2 cows and a horse for a week of your time"
Contractor: "And a guinneapig an hour for travel"

You'd need a feckin big wallet.

[milanbenes]

Sasguru...

"Not exactly as Benes Crapinvoicing Ltd. co. does not yet hold a portfolio of 3 London flats in prime locations, eh?

PS For all of which the existing mortgage is less than 50% of paper value.

SG in smug mode.
",





mate, all I can say is, oh dear, is that all ! and you are soooo smug !

dude, you need to aim higher, you appear to be settling for less.

Milan.