tag:blogger.com,1999:blog-2277215496195926573.post3259734723306900339..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: Ann Pettifor says central banks don’t create money!!Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2277215496195926573.post-77577410630089623412017-02-09T10:56:20.080-08:002017-02-09T10:56:20.080-08:00Re the money multiplier, I don't think that...Re the money multiplier, I don't think that's what's in her mind. I think it stems from her conviction that somehow only a debt that derives from a real transaction (e.g. sale of a house or groceries in a supermarket) constitutes money. I.e. she seems to think that if a central bank did a helicopter drop (say in the form of freshly printed £10 notes) that somehow those £10 notes are not money. Well as far as I'm concerned, the £10 notes that landed in my garden would be money. Still we'll get more details when her book arrives.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-13864015405155412222017-02-09T08:02:39.832-08:002017-02-09T08:02:39.832-08:00OK I will allow her that lending/borrowing is a tw...OK I will allow her that lending/borrowing is a two way sreet,it does take two to tango so blaming banks entirely is not totally fair.We can have today what we could not normally have afforded until tomorrow and many in society like that as it stands.However it was the sheer scale of the lending ,much of it on reckless property based loans, that was the problem.Every day folk are generally very bad at assessing what they can afford(risk) and often push their borrowings far too deep. Quite often in a vain attempt to keep up with the Joneses.Banks were supposed to be prudent,responsible and honest and not just join in with this kind of frivolity.Can we use any of those words about modern banks today?<br />As to to regulators and central banks, where the heck were they?Trailing in the wake of private bank credit making machines, that's where.<br />By orthodox economist I presume she means the Economic teaching profession which still teaches the incorrect Money Multiplier model of money creation to students.Something Positive Money has been saying is not what happens in the real world,banks make loans then look for deposits.They do not sit around waiting for depositors to come through a door and deposit money before making a loan<br />She does seem way off on the 99% figure,be interesting to see where she get it from.99% or 95% does it matter really?<br />vincehttps://www.blogger.com/profile/05690045138539663594noreply@blogger.com