epiphany Posted November 6, 2011 Share Posted November 6, 2011 So money tied up in assets is released into circulation without any money being taken out of circulation to pay for those assets, even though they have been sold, the end result being that (albeit indirectly) new money is being printed and released into the economy. Yes, but with interested attached. So basically, the banks not only benefit from a bailout where they would (and should) have had their assets liquidated to determine their true value in the marketplace, but also they earn interest on lending money that isn't really there's. Mind you, that is . Link to comment Share on other sites More sharing options...
Chris_Sleeps Posted November 6, 2011 Share Posted November 6, 2011 is interesting too, as a foundation to learn how the system works. Link to comment Share on other sites More sharing options...
Grandad.Malky Posted November 6, 2011 Share Posted November 6, 2011 Call me stupid, but where are the billions coming from to bail out the banks? ? Hi ya stupid. Link to comment Share on other sites More sharing options...
donkey Posted November 6, 2011 Share Posted November 6, 2011 Yes, but with interested attached. So basically, the banks not only benefit from a bailout where they would (and should) have had their assets liquidated to determine their true value in the marketplace, but also they earn interest on lending money that isn't really there's. Mind you, that is . Wel yes, release money into the economy as loans from banks. Which begs the question, why don't the gov. lend it themselves and make the profit for the treasury, thus reducing the deficit (something which they are apparently terribly keen to do.) My own theory is that it is because they are a bunch of self interested swindlers with direct and indirect interests in the financial sector. Link to comment Share on other sites More sharing options...
I1L2T3 Posted November 6, 2011 Share Posted November 6, 2011 Yet the banks still seem to be "constipated" in many respects. Part of it is due to banks re-building balance sheets. From their business perspective it's a perfectly rational strategy. It doesn't help businesses crying out for finance. But it's irrelevant for tens of thousands of established businesses that don't necessarily need more finance but rather more customers. Link to comment Share on other sites More sharing options...
gnvqsos Posted November 6, 2011 Share Posted November 6, 2011 I can't answer the first two, but printing money does not create more wealth. You have more capital to represent the same amount of wealth and that leads to inflation, and hyper-inflation when it goes really badly. I see you are a fan of Friedman.Many economists believe extra money can lead to the use of underemployed resources and will create wealth if there is slack in the economy ie a recession/depression.Capital in Economics is the sum of man made resources which help produce things. Link to comment Share on other sites More sharing options...
epiphany Posted November 6, 2011 Share Posted November 6, 2011 is interesting too, as a foundation to learn how the system works. 95% of money in circulation has been loaned into existence by commercial banks. Once people understand how this money is created they will understand why banks spend millions every year lobbying parliament to uphold this incredible privilege. Link to comment Share on other sites More sharing options...
donkey Posted November 6, 2011 Share Posted November 6, 2011 Call me stupid Hi ya stupid. I think she means she wants you to phone her. Link to comment Share on other sites More sharing options...
Chris_Sleeps Posted November 6, 2011 Share Posted November 6, 2011 I see you are a fan of Friedman. Not consciously. I'm still learning. Thatcher was a monetarist which puts me off. Link to comment Share on other sites More sharing options...
gnvqsos Posted November 6, 2011 Share Posted November 6, 2011 Not consciously. I'm still learning. Thatcher was a monetarist which puts me off. Well. she would totally endorse your line of thought. Link to comment Share on other sites More sharing options...
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