tag:blogger.com,1999:blog-2277215496195926573.post7437063635079452208..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: How much seigniorage do private banks steal from central banks?Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2277215496195926573.post-9295889473682401192016-05-21T01:17:26.845-07:002016-05-21T01:17:26.845-07:00The confusion arise from the fact that the public ...The confusion arise from the fact that the public ignore the cheating in accounting in bank financial statements.<br />I explained it concisely here: Bank of England: robbing the UK Treasury blind<br />http://leconomistamascherato.blogspot.it/2016/05/bank-of-england-robbing-treasury-of-uk.htmlCĂ©linehttps://www.blogger.com/profile/13815693535197405585noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-26077716825981092952013-11-24T16:11:17.141-08:002013-11-24T16:11:17.141-08:00I'm not sure I agree with this. This is my tak...I'm not sure I agree with this. This is my take on the issue of the 'creating money from thin air' argument.<br />http://petermartin2001.wordpress.com/2013/11/24/can-commercial-banks-create-money-out-of-thin-air/PeterMhttps://www.blogger.com/profile/02052432715870196512noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-79773439684891042112013-11-24T12:08:38.820-08:002013-11-24T12:08:38.820-08:00Anyone can create an asset/liability pair by writi...Anyone can create an asset/liability pair by writing out an IOU. It is only when the IOU is passed to someone else that a 'new money' can be considered to have been issued.<br />So the commercial banks aren't doing anything out of the ordinary, when they loan out money.<br />The commercial banks do, of course, have to abide by certain rules set by their reserve bank ( a requirement to keep a certain level of reserves etc) but ultimately they in turn borrow money , just about as much as they consider they need, from the reserve bank, at lower rates of interest. The difference of course is where they make their profit.<br />So, ultimately, all new money, unless it is counterfeit, does come from Government. The money supply is increased by lending it out. Interest rates are adjusted as necessary to control the process.<br />The money supply could be increased by spending it out too. However, the conventional wisdom is that it's a very bad idea and leads to 'Zimabweland'! Budget deficits should be funded should be via the issue of Treasury bonds. <br /><br />For some reason, the issuing of bonds is not seen by the mainstream as printing money, or even creating money by keystroke. <br /><br />MMTers know better of course. There's no fundamental difference between a bond and a banknote! Converting one to the other, as in QE, has very little effect on the economy.PeterMhttps://www.blogger.com/profile/02052432715870196512noreply@blogger.com