How to waste £445 billion? (The Failure of Quantitative Easing)
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- Опубліковано 16 вер 2024
- www.positivemon...
In the years following the financial crisis, the UK wasted £445bn on a failed scheme to stimulate the economy and end the recession. This was one of the biggest missed opportunities in history. Here's how it happened and what would happen if the Bank of England had taken just a small fraction of the money they'd created, and put it into the real economy instead...
(Note: It was increased from £375 billion since the video was made to £445 billion.)
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Positive Money is a not-for-profit research and campaign group. They work to raise awareness of the connections between our current monetary and banking system and the serious social, economic and ecological problems that face the UK and the world today. In particular they focus on the role of banks in creating the nation's money supply through the accounting process they use when they make loans - an aspect of banking which is poorly understood. Positive Money believe these fundamental flaws are at the root of - or a major contributor to - problems of poverty, excessive debt, growing inequality and environmental degradation. For more information, please visit: www.positivemon...
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The proven best economic stimulus is to invest in the people who spend most or all of their income. The poor and middle class.
Yes it is real economy not virtual economy.
I lost my last professional engagement in 2008, when the Royal Bank of Scotland screwed up the company I used to work for. In the space of two weeks we went from full steam ahead, to two weeks notice and unemployment. "Fred the shred" should be behind bars, instead he was just stripped of his Knighthood, the worst and most insulting part is that the private Insolvency firm tasked with the business of administration, took the cost of the from out of the company's remaining assets, instead of processing the money to pay creditors. I have not known full-time stable employment since I lost that position. Every Government since has failed to act appropriately, and in the best interest of its people and real democracy. The Conservative government of the UK is worst I have ever known, and our benefits system is a complete joke. Now we can call zero hour contracts, benefits sanctions, and food banks the norm for all too many people, whilst those who caused the crisis are let off scot-free. Crapitalism fails the people everytime. The usery, fractional reserve, fake money system must be stopped. All money should be created debt free ie; with no interest charged on it, and backed by the GDP. This would greatly strengthen our economy and create jobs for real people. And still people vote Conservative, a party that deregulated the city, and let them do as they please. I would argue that this system stifles real capitalism, because the money does not reach the REAL economy but is sunk into risky financial markets that DO NOT benefit the vast majority of people.
When will we ever the lesson of this crisis?
I had hoped you would make a clear distinction between bank reserves and money we and the government can use to settle payments. Since you didn't, this video doesn't make much sense to me.
The 375 billion GBP Bank of England had swapped for government bonds on banks' balance sheets had the effect you described - inflating the stock market and had negligible positive influence on the real economy, having not increased the banks appetite for lending. That is because even with the extra liquidity they had with 375b increase in reserves, banks were still restricted by capital requirements for lending as well as no increase in creditworthy customers they would be willing to lend to.
I understand Positive Money movement campaigns for a new and different system for managing money in the economy which, in my opinion is desperately needed to increase overall well-being of us all. That being said, I don't see how the idea presented in this video where the Bank of England gives money directly to the government would happen. It would obviously have to be different from the govt simply selling bonds, as it could do that with the big banks at any time, thus increasing the govt debt, which is unfavorable.
The alternative I see is that BoE simply gives the said 10b GBP in the video to the government and have the supply of money in the economy increase directly (not using the intermediaries - the banks). This would, I feel, set a negative precedence where the government gets the money it wants at will and free of charge which would at very least cause unwanted or uncontrollable inflation, one thing central banks try to avoid the most.
I want to interact with you on some issues , can I get your mail address ?
Thanks in advance .
ONE BIG problem how and to who do you distribute this sovereign money ???
If you create new money it can't just be created and spent by the government because that will be poorly spent. We know this from history.
So why not link it to something used to be gold now we have fiat money linked to nothing!
Maybe link it to taxation ?
Or link it to Business rates so small businesses can borrow this new money directly to grow and compete with unfairly advantaged corporate business ??
You need a clear solution with a clear path for how to spread this new sovereign to those who deserve to get the loans !!!
.. And most people think that banks "lend" you ' money' ( currency). It's the signature of the 'borrower' that creates the funds- the Promise To Pay. That becomes the bank's asset and then they can multiply that amount. Most people also think of this currency in paper or physical terms. The majority of credit is just a digital entry on a computer system, ie, the 'cash' doesn't exist- that's just something you get from your ATM if you need it...
Good little video. It would be improved immeasurably if you shot the piano player. Sorry - it drove me nuts.
By complaining that the the Bank of England should have given money to the government instead of into the financial system, you are failing to understand the difference between Asset Inflation and regular Inflation, putting money in assets does not effect the value of currency the same way it does with regular inflation because the market does not notice a difference in the size of the money supply. Government spending too much in printed money would cause noticeable inflation which would only hurt the economy more, and employment would not recover. We see this in the US where the government actually did spend $700 billion as a part of Dodd-Frank, unemployment fell to 5% but full time employment has not recovered, and income has been stagnant as a result of a drop in Purchasing Power Parity. Also not all the money went into the stock market, it went to buying bad assets from banks so that they had liquidity to work with, keeping them from failing so trust could be restored in the system. Rebuilding trust in a financial system would take an extraordinary amount of time. Generally, economists believe QE was the best decision in a bad situation and that it was a success.
Wei Wu Wei That was just to keep inflation high though, in order to avoid a deflatioanry spiral like Japan suffered in the 90s
I deleted my last post but both got deleted will try and sort it later
"By complaining that the the Bank of England should have given money to the government instead of into the financial system" - You do not understand that the Bank of England IS THE GOVERNMENT.
If we chose as a nation to guarantee free housing, free food, free water, free clothing, free electricity, free internet and free healthcare we could have that for every person in the country in less than a year, we could tax the richest 5% of the country and use it to make the lives of the masses more enjoyable. Let's do it, I mean, what's the best that could happen?
Exactly. We could use sovereign money to switch over to renewable energy, automate the hell of it and make it free. The same with communications, water, agriculture, clothing, health-care. The technology is also being developed to print houses, yes 'print' houses with scaled up 3D printers using cement and resin based compounds. We literally have the technology to solve all todays problems, we just have to convince people that it can be done and give them the will and means to do it. Just as banks transform 'imaginary wealth' into 'real wealth' via loans to a productive business, we could do the same by transforming sovereign money into 'real wealth', and create an abundant society that cares for all.
Robert Watts Beautifully written
Robert Watts delusional
Hjalmar Nyman How can you see more clearly? Are you being paid by the people with most of the cash?
Hjalmar Nyman
Delusional in what sense? Do you have any arguments as to why it can't be done?
I like the idea as this would invest in the economy rather than inflate asset prices, assets being held by the wealthy. Not sure about £375bn though!
What you propose is illegal in the UK however, since we are bound by the 2009 Lisbon Treaty - Article 123 states that it is forbidden for central banks to finance government debt by printing money.
+James Alexander legally not as far as I know but most politicians and economists baulk at the idea of giving the Bank of England powers that directly redistribute income. This is part of fiscal policy, which should only be undertaken by an elected government. It has an ideological underpinning.
This argument however, fails to acknowledge that the current QE programme has massively redistributed wealth as the video points out.
"This argument however, fails to acknowledge that the current QE programme has massively redistributed wealth as the video points out."
Exactly :) . Why can one group of people benefit from QE and not another?
QE did not create excess money as it was used to buy GILTS (i.e. Gov debt). The BoE are basically crediting one account and debiting another. They swapped long term debt for short term debt (money) and this was reinvested into the stock market.
BoE was hoping this money would be used to invest into businesses. If we had printed and spent this money it would have introduced an extra 375b into the economy.
A good example for this is: if my GF got a 10k loan to pay off 10k in credit cards (still 10k debt overall). I would not complain that the money should have been used for a holiday as this would have doubled her debt.
Warren mosler explains this on another video.
Very well made and explained, shared.
Not being familiar with England's financial system why couldn't they have done both? QE to improve banking and financial sector and 'sovereign money' to improve and strengthen the labor sector. Faith, trust, and willpower; and beware of the charlatans.
QE is an instrument of monetary policy exercised by the central bank. It is not the central bank's job to redistribute wealth - that's a matter for government policy.
That doesnt' make sense to me! So, here we go. Banks create money with loans. In other words when they loan the money all they do, according to Positive Money, is to write numbers in somebody's account. Then 10 seconds later in the video we hear that in 2009 the bank of England had to lend because the commercial banks were afraid to lend in case the loans wouldnt' be repaid!? Uh! eh, and WHAT? Afraid of what? Since that, still according to PM, the money doesn't exist and is just numbers written on a client account, why would the banks be afraid to NOT be repaid money they never had? What is going on here?
The fractional reserve system allows banks to create money, but a small percentage of what they loan has to be real deposits or 'reserves'. The part that they create out of 'thin air' belongs to the central bank, it's not theirs to keep. They only make money on the interest they receive. Since lending is risky they stand to lose part of their actual reserves should the loan repayment fail. I think this is correct, it's not easy to find very clear info on banking techniques and economics is taught in a very ambiguous and unrealistic manner, which has often been criticized by many 'enlightened' economics professors.
The current creating money out of nothing done by the banking system is identical to creating money from counterfeiters. The only difference is that they are different those who profit.
Maurice Allais, nobel prize in economics 1988
If you want to remain slaves of the bankers and pay for the costs of your own slavery, let them continue to create money and control the nation's credit. --- Sir Josiah Stamp (1880-1941)
In Barnet, the council lept on the financial crisis and collapse of the Icelandic banks to sell off public assets such as the gardens of the Granville Estate.
QE isn't just about increasing consumption through a rise in wealth of shareholders. It is also about reducing the relative returns of bonds caused by the higher price (income is the same despite the higher price) hence this encourages banks to lend as returns from lending are increased. Also liquidity increases due to the QE so banks are more willing to lend as they are more financially stable.
What is with the eat the rich rhetoric? I problem I see with your idea is it involves government deciding on what the money should be spent on which they do not do well. But you are right the idea of money without interest on it is a good one. I would like to see competing monies, let the people decide which one they want to use, the best will show its qualities. It would be good to have a money that holds its value over years/decades so we can all stop this race to keep up with inflation via speculation and turn are attention to building a better future.
This is the full reality of trickle down economics.
Good video, but the idea is still basically inflationary which is not ideal.
The first step has to be tax reform/ land reform - the abolition of income, sales and business taxes and the introduction of Land Value Taxation. This is not inflationary and would go a long way to addressing inequality and the boom bust cycle.
Land Reform before Monetary Reform.
It's only inflationary when there aren't new goods, services or when there is no infrastructure created. Besides, even if it was, it's still better then the alternative - the way it is now.
I do agree that Land Reform is a necessary reform though.
*****
Don't adopt that tone with a stranger please. According to Austrian School Economics inflation is by definition an increase in the money supply.
Central control of the money supply - as Positive Money admits - is fraught with potential moral hazard.
That's why land reform/tax reform is a better thing to campaign for imo.
D Bruce Not every increase in the money supply is a bad increase. As long as the purchasing power of people stays stable there is nothing to worry about.
Still, D Bruce, do you really want to keep the current system over the system Positive Money advocates?
D Bruce Inflation of Money Supply is not inherently good or bad. It simply is.
If by inflation you mean the devaluation of goods relative to the average household income then NO this is NOT inflationary.
If bread goes from $5 to $10 but household income stays at $50,000 then we have inflation.
However, if household income also increases to $100,000 then it's NOT inflationary.
In THIS system, the price of goods would remain fixed while the average household income would increase.
What happened was, the value of STOCKS increased while people's household incomes went down and the cost of goods remained fixed. Hell, some goods even went UP in cost. This is what triggered the London riots!
You must look at all these factors and how they relate to one another: avg household income, cost of goods, cost of assets, total money in the system.
Looking at the LEAST important factor (total money in the system) and saying, "Oh that inflationary." misunderstands more important aspects to this entire picture.
I hope that explanation helps.
UniversalPotentate
This video makes giving money to the government sound like the obvious choice. Indeed, if that did happen, inflation would likely take off as everybody suddenly felt richer and more money was chasing a simliar amount of goods and services (although this would indeed help drive growth). The reason the money went to the banks was 1. To save them from failing, and 2. To drive down interest rates (through the selling of government bonds; increased demand for the bonds from the new money; higher bond prices; lower bond yields and thus lower interest rates - bond yields set interest rates). This makes money cheaper for borrowers (stimulates economy), makes it cheaper to service debt, and in the longer term helps inflate the total debt away as money becomes worth less... no?
you should change your slogan. It should end with the positive aspect of your aspiration, after all that is what you want people to remember. When it ends on "not against it" it ruins the whole message. Leave out the "and not against it" part. Just change it into "a fin. sys. that works for" and put "society" in bold letters .
According to the Maastricht Treaty, EU member states are not allowed to finance their public deficits by printing money.
If that £375bn went anywhere else we would undergo a horrible amount of inflation.
Quantitative easing also created inflation - in the financial market. I do not know about you, but I rather have fresh new money equally divided among everybody to stimulate the economy then having just newly created money in the financial sector.
Why do you say 'undergo'? Money only means something when it is put into action, it's not like money itself makes prices rise or anything. Yeah, sure, the money supply expands, but banks stopped lending, remember?
***** Sorry, I meant those two sentences as independent points. I'd rather they didn't hit a few keys on a keyboard and generate £375bn, video seems to miss is that the aim of the quantitative easing probably wasn't supposed to make everybody benefit financially by the trickle down wealth of the investors. I bet it was actually to make everyone benefit in a different way, probably by keeping companies alive and trading. I also know cock-all about economics sorry so i'm probably not a great person to debate with, sorry.
I can't seem to find anything regarding Member states being unable to "Finance their public deficits by printing money" Could you direct me to the Article in the treaty?
I did find article 104c, I found to be of interest in this situation, wouldn't the fact that as a nation we are currently in violation of articles against excessive deficits make this argument void? allowing banks to finance public sector?
www.eurotreaties.com/maastrichtec.pdf
Boris Pasternak I copied that sentence verbatim from this media source www.bbc.co.uk/news/business-15198789. It's near the bottom where it discusses 1920's Germany and Zimbabwe. Not the most reliable of sources I know, but my ignorance of quantitative easing, and economics in general, led me to try and find a concise source of information.
OR, let's NOT create more counterfeit money? Stop bailing out banksters? Let the damn country go broke, since IT IS.
Money created by the central bank is as far away from counterfeit money as it's possible to be.
Go on positivemoney.org & sign their petition. let's get this money scandal sorted.
I am very happy with this video. It so nice to have such tool so I have not to waste time to explain the basic!
Congratulations! Well done!
Bom Dia
Muito obrigado pela informação.
Mas infelizmente não chego a entendê-la perfeitamente.
Um grande abraço.
r u happy with this video? :)
The specialised artificial bubbles like those created in the housing market through banking deregulation that allowed people to borrow more, whilst the housing stock remained stable, created a single sector inflation - pushing up house prices, taking more money from the real economy (Average houses are over 8 times average wage now - it used to be 3.5) - reducing the disposable money available after rent/mortgage to spend, which shrinks the economy as it needs customers with money - though they patched this temporarily by making debt cheaper through credit cards and loans - but now that is also unsustainable. QE created to pay down debt instead of inflating markets or wages has never been shown to be inflationary, in fact history is replete with "Debt Jubilees", which is what we need now, ^oo^
Quantitative Easing hurts ALL of us, especially the poor. No matter what it's used for. It's a trap that you can not escape from and will cause Hyperinflation. If you print more currency it devalues the currency that everyone already has in their pockets, pensions and savings. For example your £1, is now worth 80p, then 50p then 40p......until it's worthless. It's not prices going up, it's your money going down. This has happened many times before with many countries, it never ends well.
Specialised artificial bubbles like those created in the housing market through banking deregulation that allowed people to borrow more, whilst the housing stock remained stable, created a single sector inflation - pushing up house prices, taking more money from the real economy (Average houses are over 8 times average wage now - it used to be 3.5) - reducing the disposable money available after rent/mortgage to spend, which shrinks the economy as it needs customers with money - though they patched this temporarily by making debt cheaper through credit cards and loans - but now that is also unsustainable. QE created to pay down debt instead of inflating markets or wages has never been shown to be inflationary, in fact history is replete with "Debt Jubilees", which is what we need now, ^oo^
QE is inflationary after a short deflationary period, because as you correctly stated, a rising house market pulls money away from other markets, causing a deflation in price in those markets, (see every stock-market crash to see that), but what the criminal government/banks are trying to do this time is "inflate" prices within deflating markets, using QE, while real wages stagnate, resulting in all property being stolen from the working, and given to the parasite class, which are the governments and banks. The system is complicated, so in short, QE is nothing more than theft from the people, which ever way you look at it. And yes, I agree, a debt jubilee is needed, not more fake counterfeit fiat currency.
It's unfortunate that the guardians of the emperor's new fiat currencies clothes have the public talking about anything but the origin and manipulation of money in some distorted dance between governments and corporations that allows colossal purchasing power through debt to be given to corporations that have never earned and have no justification for that power - Recently we saw ARM a successful British company bought up by a corporation 100 billion dollars in debt - and yet this is perversely called "an investment" instead of asset stripping, ^oo^
Yes, I agree, it's very frustrating to.
Looks to me as if our " governments " need to go back to school and try to understand how the money supply works. But also the sheeple need to go and join them too because after 10 years of austerity they went and voted the same idiots back into office to carry on with more of the same?? Keep up the great work Positive money.
Money shouldn't be created out of thin air but rather should keep it's value at a set amount in relation to commodities or rise in case there's a shortage of it.
Good video, but how did the bank of england actually put that money to the financial markets? Did they create money to buy goverment bonds from the banks, who then put that money in to the stock markets?
The BoE used most of the newly created credit to buy Public Debt bonds, known as Gilts, which were owned by private investors. These investors are usually pension funds and insurance companies.
Ok, thanks!
I am saddened at this institutionalized point of view with assumptions
which are either inaccurate or politically accepted. The explanation of
factors effecting the factors of production would in any market tested
job would be at best skewed towards government or political
disinformation. The figures in his model are based as Mark Carnie said
based on the governments inaccurate unemployment figures which have
never been triangulated and indeed Cameron have admitted as incorrect.
The explanation for non productive growth in the housing giving plus
growth figures are a testimony to failed short term policies which may
push us back in the growth stakes in the near future.Underlying growth
in the productive sector has been inadequate and patchy at times.The
inadequate explanation for house price rises shows no meaningful
expertise in this area beyond that held by an MP. In truth the
subsidizing of a nation wide building program at a cost to the council
tax payer of 35 thousand per house is a great mistake taking money away
from essential investment yielding little benefit to society.This money
if spent on infra structure would benefit society with much higher
returns and jobs.The housing crisis in London is a drag on society
choking off production and pushing up production costs to global
uncompetitive levels. Commentators put the total social costs by
austerity to include demunation in intellectual capital in UK PLC to be
260 billion.Presumably the government does not issue or measure
independent social economic costs as they would paint a negative picture
of the economy in any attempted model.
The summary of this situation is the government has inflated the housing
market by subsidy to push up otherwise failing economy.A surplus of
labour has held back any underlying growth in the productive economy.
Taken as a whole poor quantitative easeying choices by not subsidizing
the customers of the banks, but a few bankers and investors which have
not decanted any stimulus to the economy. Radom capital inputs such as
PPI have had a short term stimulating effect where quantitative easing
has clearly failed. Austerity by ametures has simply been a transfer of
short term costs to longer term costs. It is useful to listen to these
lectures but sometimes they are presented from a bias point of view from
the accumulation of hypothesis to conclusion.
I've been debating this with some friends (Tory friends) and one thing someone has just asked me is why borrow though QE rather than directly borrowing with historically low interest rates? Can someone shed some light on this for me please.
+stuart chapman
Because if confidence is low, which is is after a global crash, people don't lend. So the government couldn't find people to borrow from. Also, and this is the real reason: printing money and giving it to the city of london, hurts normal people the most, and enriches the wealthy.
Yeah this is what I thought. thanks :)
... can someone please explain to me why the video suggests the QE money goes into the stock market, but I can't find much reference that this is how the money is spent. thanks.
Poor you, left hanging for 6 years.
When banks recieve the money from QE they lend it out to stock investors.
Then they invest in stocks which drives up their price.
Banks need to be banned from speculative lending. If banks were only able to loan to enterprises, inflation can be managed to match the creation of new and more goods and services.
When the BoE buys assets (stocks, etc.) with new money, who gets the money from the assets?
Is it the shareholders of the BoE?
+Kemble Walker super late answer, but the BoE buys government bonds from commercial banks, pension funds, insurance companies (whoever holds lots of bonds) etc. in a reverse auction (essentialy "who wants to sell their bonds, what price are you willing to sell?"). So to keep it simple, commercial banks now have more money which they can issue out more loans with, pension funds have more money to buy other assets in.
+giacomoly OK, and the BoE buys these bonds with electronically created money?
yep!
@@KembleWalkerSRPZ The money is created on the Bank of England's ledger. The principle is the same whether that ledger is maintained on a computer database (which it is) or as an old fashioned paper ledger. The "electronic" point is neither here nor there.
this wouldnt work. Prices of consumer good would just rise. Printing money out of thin air and just giving it to people doesnt work. If it did, life would be pretty easy huh.
bull shit the BOE bought UK bonds, so the new money went to the government so it s up to the governement to decide how to use that money.
plus, you have to remenber that this new money has to be refund when the bonds come to expiry
+savonarola medici - the UK government not England
- well look at the debt levels and the recent deficits, new bonds were not issued????
Okay, I was nodding my head until the "solution" part of the video. It condemned the whole "trickle down" idea of QE before it then advocated the idea of creating money out of thin air and "giving it" to common people. But how would it be distributed to common people? The money would have to go through banks, and big businesses would bid for it, and much of this artificial spending on the economy would lead to malinvestment (see the US housing bubble). Almost all artificial spending on the economy benefits the rich and barely trickles down to the little guy.
+Austin Rogers Create a national investment bank or the government could have used RBS. Then they could have provided cheap loans to small and medium sized businesses in the UK or to ordinary people. Call it a recession loan.
One example they gave was to build schools, you have to employ heaps upon heaps on ordinary middle/lower income folks around the country to build them, their wages they will inevitably spend.
What if the money was used to tackle private debt somehow.
If you put the money into the financial market, you might still be able to withdraw it after, but if it's given to the public by government spending, it will be very hard to withdraw the money from the economy and it might create a hyper inflation like German did.
Haixin Zheng Not if the amount of new money created from time to time is just enough to maintain the money supply in the economy as it grows. This is what Positive Money is proposing; not flooding the country with money.
Haixin Zheng Money spent on goods and services of real value circulates through the economy, creating more business and enhancing the country's economic life. Excepting, of course, for money that is taken out of circulation by hoarding etc.
Finally someone who thinks
Why does the democratic or equitable allocation of resources require a new term?
It doesn't. It's called Land Reform or The Single Tax.
It doesn't. Giving to those who need the most is a popular and intelligent idea.
Giving to those who don't need it while others are starving is unpopular … therefore it needs a special name like "Quantitative Easing."
UniversalPotentate
Spot on. This is more about cronyism than anything else.
However, you cannot help out an addict by giving them more of what they are addicted to (assuming you really wanted to fix the problem at all). The modern economy is not some esoteric mathematical formula that runs like a well-oiled machine, but economists, whose perceived value to society is at stake, would have you believe that it is.
Real wealth, only represented by money, is made not by playing games with formulae, but by adding value to goods and services. If you dig up earth and dump it into someone's garden, then they won't think that was particularly clever. However, if you extract glass, steel, gold and diamonds out of it and provide other people who build roads with low-cost hardcore with what is left, then many groups would pay for that.
But if you then traded these valued benefits out and made sure that every time someone traded after that (and if you controlled the trading mechanism - money - you would control it), they then they lost on the deal and you gained, then you'd be unpopular again.
However, you could always go you your banker friend and with the help of some legislative tweaks and arrangements of deals whereby it became possible, you could make loans available to people who couldn't actually afford them. Their memories would evaporate with economical speed. They would thank you for for their new found wealth and acceptance into the halls of the wealthy[lol]!
Then they would subsequently acquire a taste for the money and want more. You could continue to suck increasing amounts of interest out of them for years. You could charge ever higher prices and extract ever higher taxes; win-win for you and you, lose-lose for them.
However, eventually, you'd come up against the fact that they would never be able to pay it off and also that the actual value of the goods and services that you originally provided was no longer accurately represented by the perceived money value. But hopefully, by that time, you'd have lots of people and resources to make sure that you'd be OK until after the dust settled and you'd be OK again.
Economic modelling attempts and only attempts to understand what is going on with the interactions between people and their trading. In many cases, this modelling simply doesn't work, but if you have invested in a master's degree in the subject, you aren't about to admit that.
Then, going back to my first point, who is likely to say "thank you" and in a very tangible way? Would that be 'Joe Bloggs' or 'Lord Muck?' You probably wouldn't want to have 'Lord Muck' feeling left out - that could be very unhealthy for you. 'Joe Bloggs' - couldn't he pose a problem? Give him more beer, cigarettes, Eastenders and the Internet sell him more stuff that he wants but doesn't need and yet keep him struggling to pay even the basic bills (wonderful stuff, credit!) - it's cheap and you won't get much fight from him. Most of it is over his head anyway and if a few cotton on, then label them conspiracy theorists and jeer at them publicly. More pie anyone?
Mike Russell A terribly bleak and dystopian view of our world and the human condition.
I LOVE IT!!
I believe that education of how the Central Banks of each country works AND especially on personal finance will end these problems.
You cannot understand banking, central banking and personal finance whilst falling into the traps you mentioned.
It begs the question of how even the folks in the Bible had the sense to understand the problem of usury … ill-gotten gains.
There's no representative good or service that's exchanged for money in usury. Understanding what's a fair interest rate and why might take some mathematical minds but the second ALL money enters our system as a debt to be repaid … OH BOY!
Nonetheless, banking and central banking have charged forward while only the wealthy get an education about personal finance. No one seems educated on how the economic and financial systems actually work … at least not in large enough numbers to make a political change.
I think you and I see the same problem in very similar terms.
Good to meet you, Mike! :-)
UniversalPotentate I was referring to 'Sovereign Money', not Quantitative Easing. I don't know why we need a new term for 100 year old policies. Or even older if you agree with D Bruce's abstraction.
the 19minute video ''Banks Get $1.5 Trillion Bailout Over Coronavirus'' by The Jimmy Dore Show
Repeal Bank Charter Act of 1844 now
£6 000 please!
I think QE for the people is a better system by giving money direct to people as a citizen dividend.
Quantitative easing for the people is the only way. Giving it to the banks is just throwing it down the big black uneconomic hole.
You are stupid... simply creating money will cause inflation and bubbles... prices go up therefore Govnt has to spend more... so it will have to sell bonds... in the other way FED can buy those bonds...
Actually the real quantitative easing is government buying treasury bonds from the banks... that's why the money ends up in the banks and not general population...
US government is not dumb like you to think is going to create money and give to the people without causing hyperinflation... lol
Get a grip...
Then why are we in deflation now after printing trillions of dollar? As is evident by now QE isn't inflationary or deflationary.
Bubbles are caused by the current system. Banks create money through debt creation. There is no limit on the amount banks create in the good times which leads to booms followed by busts when banks hit hard times and do not lend therefore rediuced money creation. There is no planning on the part of the banks as to the appropriate amount of money to be created
...to maintain a stable economy. Positive money suggests removing the power to create money from the banks and giving it back to the government. A transparent independent body would decide how much money would be appropriate to create to keep a stable economy and encourage a desirable and appropriate amount of growth
The government would then create the recommended amount of money and spend it how they see fit. At a time when people are suffering greatly due to lack of housing, underfunded NHS, no home help care, and the planet is at risk due to an unwillingness of governments to invest in green energy infrastructure this makes sense. Giving money to the rich, which doesn't benefitg those in real need or a planet on the brink doesn't.
A better way to waste all that money is to give it to me
Money = Power. The one who designes to whom money flows, is designing the power-structure of society. They will never allow for the mass of people to be empowered.
No access to debt = power
The question is who should get access to debt those who pay no or very little tax (our current f7ked up system) or those who pay their taxes.
TAX is the measure of contribution and Debt is the systemic risk they really should be linked !!!
So now you say that Keyneism is not the problem. You think you need Keynesian stimulus, but just in a different way, right? BS.
How can I find this beautiful music?
Can someone please explain me how these £375 Billions were put into the stock market (?)
savonarola medici
I think I get it thank you for your detailed comment. Sound to me that it's more like a way to give money to a certain category of people rather that the people that need it most.
Saâd FILALI KHATTABI Are you really using entry salaries as an indication for intelligence? You do realise Hedge fund and investment bankers earn more than workers at the BofE because it is the private sector...
What do you mean with electronicly created ?
None of it was printed; the Bank of England credited its own account by typing the numbers into its computer system, just like this: £375,000,000,000, but their numbers were used to buy government bonds. Commercial banks electronically create money every time they make a loan: they type the numbers into the borrower's bank account (it's new electronically created money) and it can be used to buy a house or whatever the borrower told the bank it wanted to do with the money. The money is electronically un-created when the borrower pays it back. The Bank of England explains this in its document 'Money Creation in the modern Economy:' www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy
give it to me. i'll waste it. and i'll make this youtube video explaining it in 2 seconds.
Wow, my comment debunking this video has been removed. How professional
Well done.
Just don't create new money
Right.
Good vid
This must be seen by all!
But wait the property market is the politicians retirement fund....
floating market with new money just make a greater inflation, by that poor people's become poorer n their welth decreased
That is one of the biggest myths ever. Poor people are poor precisely because they have no wealth to see decreased in value. As long as incomes rise in step with inflation, it is only the wealthy, with vast amounts of stored, unproductive wealth that "suffer".
Not that money creation causes inflation anyway, it's all in the spending of it, and even then, inflation only occurs after almost 100% of existing output stocks have been purchased. In an economy with increasing inventories of goods building up in warehouses, quite a lot of money can be pumped in without general inflation.
When newly created money gets invested into real estate, which is limited in quantity and whose quantity can't simply be increased to soak up demand, we get property inflation which can only be dealt with via taxation (and that's a WHOLE other topic).
Keynes live!!!!!!!!!!!!
please explain how exactly that money entered the share market?
All by illuminati design......just like education.
Did the BoE print your Economics degree too?
Economic consensus is that QE was a success and CB's only option to stimulate demand, maybe read some studies fella?
How can you say they "wasted £375 billion" shows a complete misunderstanding of how central banks work
This video is propaganda guys.
Scuba Sausage
Do enlighten us.
Printing money and giving to the people will cause hyperinflation, it looks like a good idea, but is stupid
The propaganda is this video is too damn high
+ImaThanusan Ima, if you want to see how the money system works you can read it straight from the horse's mouth: the Bank of England itself. Their publication in 2014 called 'Money Creation in the Modern Economy' explains it right from the first sentence on page 1. Commercial banks create 97% of our money electronically by making loans; when they stop the Bank of England starts QE. www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf
This is pure propaganda, completely intellectually dishonest. QE doesn't only benefit actors in financial market (bond traders, stockholders etc...) , but also John and Jane who want to take loans out at their branch bank to start their small business etcetera, or who simply want to spend on credit.
Average people benefit from it, as well as "the rich". Although, perhaps asymmetrically.
+Illuminati Watch how so? Do you have data or information to support this claim?
+James Alexander Do backs lend money to normal people? If so, then that supports my claim. One function of QE is to provide banks with the wherewithal to lend.
+Illuminati Watch
Proposition A: QE benefits financial markets.
Proposition B: Banks lend money.
Proposition C: Normal people benefit from QE.
If A is true THEN B is true THEN C is true.
One break in that chain and C becomes false.
- Do financial markets = banks? If so why don't states borrow from banks instead of markets?
- Are banks forced to lend to people? They are private entities and free to do what they want.
- Does lending money to someone equate to giving money to them? Which is basically what QE is.
Also:
www.amazon.com/Other-Peoples-Money-Business-Finance/dp/1610396030
"But lending to firms and individuals producing goods and services, what most imagine as the principal business of a bank, amounts to less than 10% of that total (less than 3% in Britain; Goldman has gone from doing 'God's work' by helping companies raise the capital needed to grow to deriving less than 10% of revenues through underwriting new capital issues - provides now mainly derived through trading). Most of the assets and liabilities are obligations from and to other financial institutions. The value of daily foreign exchange transactions is almost 100X the value of daily international trade in goods and services.."
P.S: en.wikipedia.org/wiki/Trickle-down_economics
"There is no "trickle down" economics as defined by economists, the term is almost exclusively used by critics of policies with other established names."
+Illuminati Watch www.cnbc.com/2015/08/18/st-louis-fed-official-no-evidence-qe-boosted-economy.html
+James Alexander First, great response. I am aware that banks invest more time and money in HFT and derivatives trading etc...and offer less loans. I'm not sure if the state can impose minimum small-business lending requirement on banks, though I doubt that, so tbh I wouldn't be surprised if banks didn't benefit from QE funds to disburse more loans.
While banks may not offer loans on a significant scale to small businesses, to what extent do they offer mortgage loans? Imagine the disruption to housing markets if people can't take out loans to buy houses (specifically, think of industries such as construction etc...). Of course, if banks don't offer mortgages on a significant scale, this is negligible.
Still, QE may have been necessary, if only to prevent a bank run. If not for QE, then people may have lost money they'd deposited (there's some sort of deposit insurance I believe, but it's capped at a certain level). So for the sake of financial/societal stability, QE may have been necessary.