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Mervy King's Recent Speech In Full

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http://www.bankofengland.co.uk/publications/speeches/2010/speech455.pdf

I think this is a great speech and I agree with pretty much all of it. Whatever the judgement people have of Mervyn King, when it comes to understanding the bigger picture with regards to banking, he is right on the money. It's good to know there is someone with his clout speaking out in this way.

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I think this is a great speech and I agree with pretty much all of it. Whatever the judgement people have of Mervyn King, when it comes to understanding the bigger picture with regards to banking, he is right on the money. It's good to know there is someone with his clout speaking out in this way.

Bagehot's book is a classic, it is a beautifully written description of banking and the nature of our system of credit.

Published in 1873, just a few years after the run on Overend and Gurney in Lombard Street.

If you want to understand more about how the system works, read this book instead of the garbage on this forum.

http://www.amazon.co.uk/Lombard-Street-Description-Money-Market/dp/0471345369/ref=sr_1_2?ie=UTF8&qid=1288335713&sr=8-2

Edited by BandWagon

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Bagehot's book is a classic, it is a beautifully written description of banking and the nature of our system of credit.

Published in 1873, just a few years after the run on Overend and Gurney in Lombard Street.

If you want to understand more about how the system works, read this book instead of the garbage on this forum.

http://www.amazon.co...88335713&sr=8-2

what garbage? Austrian theory?...which from the summary was Bagehots basis for curing credit booms....ie...savings are the key....

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http://www.bankofengland.co.uk/publications/speeches/2010/speech455.pdf

I think this is a great speech and I agree with pretty much all of it. Whatever the judgement people have of Mervyn King, when it comes to understanding the bigger picture with regards to banking, he is right on the money. It's good to know there is someone with his clout speaking out in this way.

Its a pity there wasn't more truth in this. Had he and his merry men had more say Brown would never had gotten away with as much damage as he did. Not seeing much in the way of reforms under his new bosses.

Edited by Realistbear

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Bagehot's book is a classic, it is a beautifully written description of banking and the nature of our system of credit.

Published in 1873, just a few years after the run on Overend and Gurney in Lombard Street.

If you want to understand more about how the system works, read this book instead of the garbage on this forum.

http://www.amazon.co.uk/Lombard-Street-Description-Money-Market/dp/0471345369/ref=sr_1_2?ie=UTF8&qid=1288335713&sr=8-2

Thanks for the link - I've added it to my wish list.

That's a bit harsh about this forum though... I've learned and shared more here than I ever imagined I would. I only came here as I thought house prices were a bit high and have come away with a thorough understanding of economics. The more you put in, the more you take out, but this place is a credit to the Internet.

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Its a pity there wasn't more truth in this. Had he and his merry men had more say Brown would never had gotten away with as much damage as he did. Not seeing much in the way of reforms under his new bosses.

He was just following orders though. He could have resigned, but that wouldn't have helped either. Instead, he has built on his reputation and now people listen when he speaks. That he knows and identifies the problems, rather than pandering to the banks gives me hope.

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I've always thought that Merv 'got it'. But this makes his actions all the more criminal, not less. He can jawbone all he wants to, but day in, day out, he's shafting all decent people in this country. And woe betide sterling going over 1.60 for more than a day or two, before the QE jawboning cranks up again in earnest.

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I've always thought that Merv 'got it'. But this makes his actions all the more criminal, not less. He can jawbone all he wants to, but day in, day out, he's shafting all decent people in this country. And woe betide sterling going over 1.60 for more than a day or two, before the QE jawboning cranks up again in earnest.

As Injin often says, dont listen to what they say, look at what they are doing for the truth.

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Bagehot's book is a classic, it is a beautifully written description of banking and the nature of our system of credit.

Published in 1873, just a few years after the run on Overend and Gurney in Lombard Street.

If you want to understand more about how the system works, read this book instead of the garbage on this forum.

http://www.amazon.co...88335713&sr=8-2

+1, though it is somewhat out of date!

Full text available for free here:

http://www.gutenberg.org/ebooks/4359

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Am I reading that right, that the proposals include effectively the end of fractional reserve banking, and hence an unwinding of the credit expansion of the last say 30 years? Even if not moving to 100% capital reserve rations, moving to 'much much higher...order of magnitiudes higher' indicating what 50-70% ratios?

If I understand this correctly, his is *massive*, right, we are talking about a very significant change in savings rates, and a very very very significant change in mortgage approvals. Is this the trigger for a 30 year bear market in property prices, unwinding the ridiculous HPI of the last 30 years?

Could someone who understands this stuff better than I provide a synopsis.

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I've always thought that Merv 'got it'. But this makes his actions all the more criminal, not less. He can jawbone all he wants to, but day in, day out, he's shafting all decent people in this country. And woe betide sterling going over 1.60 for more than a day or two, before the QE jawboning cranks up again in earnest.

+1

he's a fat piggy thief who thinks if he says the right words he can carry right on trucking.

he's probably right too, mores the pity.

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Am I reading that right, that the proposals include effectively the end of fractional reserve banking, and hence an unwinding of the credit expansion of the last say 30 years? Even if not moving to 100% capital reserve rations, moving to 'much much higher...order of magnitiudes higher' indicating what 50-70% ratios?

If I understand this correctly, his is *massive*, right, we are talking about a very significant change in savings rates, and a very very very significant change in mortgage approvals. Is this the trigger for a 30 year bear market in property prices, unwinding the ridiculous HPI of the last 30 years?

Could someone who understands this stuff better than I provide a synopsis.

It certainly has the potential to put the cat amongst the pigeons. He certainly shares similar conclusions to myself and others on this forum in regard to what reforms are needed.

It is an interesting call to end fractional reserve banking completely. Framed against the need for less debt and more equity, I read this as needing to end "risk free" (ie. taxpayer backed) universal banking (where all accounts are a form of fractional reserve banking).

There is already a bill going through parliament for giving savers a choice of keeping their money in a safe account (government bonds, cash only etc) or an investment account (where the money is loaned on, at risk). This would end the concept of universal banking being possible in a risk free environment (see the bit about 'alchemy'), which is a pretty big deal.

Calling for timed savings on all investment accounts could also be implied though. I'm not sure if this is the best solution (as it could trap savers in bad investments), but it is one which some are calling for. I'd rather give the potential saver a choice of having a equity share (ie. a direct risk of losing money) in the investment, while being able to trade out at any time - this is what Limited Purpose Banking, as suggested by Prof. Kotlikoff, provides. King also mentions the latter too, so he is clearly open to a few options.

IMO, removing the government deposit guarantee and requesting that banks offer a choice of safe and investment accounts would open the market up. Safe accounts and LPB or timed savings may become popular, purely because of free market demand in this scenario. What is clear, while ever both implicit ("too big to fails") and explicit (government deposit) guarantees exist, risk is not being correctly appropriated - it just gets dumped on the taxpayer, with savers opting out of taking responsibility.

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Am I reading that right, that the proposals include effectively the end of fractional reserve banking, and hence an unwinding of the credit expansion of the last say 30 years? Even if not moving to 100% capital reserve rations, moving to 'much much higher...order of magnitiudes higher' indicating what 50-70% ratios?

If I understand this correctly, his is *massive*, right, we are talking about a very significant change in savings rates, and a very very very significant change in mortgage approvals. Is this the trigger for a 30 year bear market in property prices, unwinding the ridiculous HPI of the last 30 years?

Could someone who understands this stuff better than I provide a synopsis.

I think he's making observations of alternative possibilities. Certainly not proposals.

What he does (very effectively I think) is offer alternatives, for politicians to make decisions (as of course he ought to and has to).

As I understand it when the banks collapsed he insisted the decisions to bail them out were political not monetary. Gordon Brown could perfectly equally have chosen not to give taxpayer support to Fred Goodwin's RBS but made the political decision to do so.

That said, I'm mostly in the camp that believes government's make decisions they're told to by their 'handlers' anyway, going back at least to when William of Orange was bailed out by the Anglo-Dutch merchants lending him money via the creation of the Bank of England in 1694.

Edited by Frank Sidebottom

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No mention of yields tending to zero leaving pensions unaffordable and the crisis looming into which can he has kicked yesterday's crisis into.

Never a truer word spoken brother. One minute I think Merve has some sort of conscience and sense of morality, and the next ... NADDA .

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"In September 2007, everyone thought that the crisis was one of liquidity and as a result there was an expectation central banks could provide the solution. But it quickly became clear that it was in fact a crisis of solvency."

Actually, in September 2007, it was 100% obvious to anyone who looked, that it was a solvency crisis.

King, Bernanke, the bald demon from the US, the banks....the president, Darling, ALL said it was a temporary crisis of liquidity.

They STILL do....hence the QE......

THEY are STILL ignoring the FACT, obvious to all, that they are propping up rich vested interests for god knows what purpose.

Trading through this gets harder every day they leave it because the DEBT IS REAL, and assets are falling in value, and now, in the US, are UNAVAILABLE for redemption.

still...At least I and many others here and throughout the net, A: saw it coming, and B: said it like it was....INSOLVENCY.....and NOTHING has changed.

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what garbage? Austrian theory?...which from the summary was Bagehots basis for curing credit booms....ie...savings are the key....

Bagehot did not provide a 'cure' for credit booms, he understood the market was far too complex for that.

Rather read the book than regurgitate nonsense from the internet.

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Bagehot did not provide a 'cure' for credit booms, he understood the market was far too complex for that.

Rather read the book than regurgitate nonsense from the internet.

well, I read the very old fashioned speak of chapter 1 and 2.....confidence is key...

nothing new here for me.

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First published in 1873, but when the credit crisis broke, the BoE turned to his advice from this book.

The nature of banking and crises has barely changed since then.

of course, the nature of banking is the same...its about the lending of money creating credit.

Mises also has a theory...

Im not sure what you mean about the rubbish on the internet, but I read the first two chapters of the book on the internet, Mises on the Internet and gather many opinions on the internet.

I assume you mean the "money as debt" videos.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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