The other night, when I had the TV on, I saw that one of the programmes, featuring the BBC top economics and business correspondent, Robert Peston, was all about the financial panic of recent years. Oh dear, I thought, I can just imagine the usual line about how it was all the fault of greedy bankers, insufficient regulation, “unregulated laissez faire capitalism”, and on and on. Well, not quite. Yes, some of those elements were there, but there was also quite a lot of sophisticated explanation of how a combination of forces – leverage, “too big to fail bailout protection, over-confidence in newfangled ideas of risk management and misalignment of incentives for bankers – combined to create the storm. I would have liked to see more focus on the role of ultra-low central bank interest rates in creating the crisis, as well as government intervention in the housing market and through deposit insurance, but to be fair, this was mentioned, several times. There was little in the show with which someone like Kevin Dowd, recently referred to here, would dispute, although I imagine Kevin might want to make more about the vexed issue of ownership of banks and limited liability.
And about three-quarters of the way into the show was Toby Baxendale, founder of the Cobden Centre, the organisation founded last year to flag up the problems caused by central banking fiat money, and which sets out alternative ideas, such as the possibility of giving depositors in no-notice cash accounts the right to demand that their cash is properly looked after, not lent out for months in a risky play. (Yup, it is that pesky fractional reserve banking issue again). Toby was very forceful and his views were treated respectfully by Peston. There was no sneering.
In short, this was and is a pretty good programme as far as the MSM goes. I give it about 8 out of 10. Yes, I am not drunk.
Across the pond it’s “No, I am not drunk.”
Yes, we have no bananas.
The Cobden Proposition is an interesting one though. I wonder if it can actually even be done in our system. It seems to be saying that people should be able to specify that their account is M0 money, but the problem is that all money in accounts is M3. That is, there isn’t any actual money in any accounts; an account balance is just a claim on[1] some M0 (liquidity).
Consider, if Mr Gates has £1bn in Mr Goldstein’s bank. How much money has Mr Gates actually got?
[1] That is, a potential request for some M0. If it’s available.
Yes J.P. – good news.
Ian B.
Do not worry – things are worse than most people think, so we will not have to worry about those M3 accounts for much longer.
I suspect you will survive (even prosper). You are tough minded and have no illusions.
Remember even the power elite are dominated by illusions – Barack and co honestly think their dream based perfect society will work.
A wonderful egalitarian world community.
Under all the corruption (and brutality) they are actually in a delusional state. At one level sharp and “with it” (and very, very cunning), but at a deeper level quite barmy.
This gives people who are not in a delusional state an advantage.
You know their dream (whether one calls it “Marxist” or “Progressive” does not really matter – after all it is at least as old as Plato) will not work.
“Paul it is our job to prevent the collapse of civilization – not to gloat at the thought of the left seeing their ideal society collapse at the very moment of their triumph”.
Yes I know, I know.
Good luck Cobden Centre.
Well I dunno Paul, I think we’re more at the stage of “recording the collapse for the history of future generations” than “preventing the collapse”. But you know me, bit of an Eeyore. 🙂
I have this image of an archaeologist in the year 4000 or so, instructing some students in the field-
“And in this stratum we find the iPads, and the cellphones- look, there’s one. And then in this stratum above are the characteristic simple unglazed pottery shards and a midden heap”.
says Ian B. to Paul Marks. Excuse me while I go slit my wrists.
🙂
Yeah,
The Northamptonshire Popular Front are not the most optimistic of sorts 🙂
Yeah,
The Northamptonshire Popular Front are not the most optimistic of sorts 🙂
‘Popular’? If only…
Yeah,
The Northamptonshire Popular Front are not the most optimistic of sorts 🙂
That is the Popular Front of Northamptonshire – the “Northamptonshire Popular Front” is that person sitting over there.
LOL!
Well, watching it… incredulous at the repeated Pesto assertion that “money is being lent to businesses”
Right – oh … I can give an example…. 25 year record of fiscal probity and not even a single late payment. Hard assets in excess of 10X the required amount (at present market prices)
So, you want to borrow £150K? yes that’s fine, if you deposit £150K with us – we’ll lend you £150K – we, slightly shocked… and what will the terms be?
Ah yes, let me see… 3% over base and an arrangement fee.
la-la land
This is set for loads more trouble
SPLITTER!!!