Saturday, 26 July 2014
Positive Money and Ann Pettifor.
Ann Pettifor has been getting all worked up lately about the rather obvious fact that when base rates rise, so too will rates for mortgages, which will be a problem for a proportion of mortgagors. See images below for some examples of her near hysteria.
Now that rather contradicts the disdain with which she regards Positive Money. Reason is that PM, along with the New Economics Foundation, Prof Richard Werner and others, advocate a system under which interest rate adjustments ARE NOT used to adjust demand: rather, what’s varied is the amount of new base money that the authorities create and spend (net of any tax increases or cuts government chooses to make).
Thus under that system, interest rate gyrations ought to be LESS PRONOUNCED, all else equal, than under the existing system: something that Ann Pettifor would presumably welcome.
Perhaps she'd like to re-consider her disdain for Positive Money.