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The Spaniard

Qe - One Step Towards Monetary Reform?

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QE is a device used to solve the liquidity crisis, which itself is obvioulsy a solvency crisis, hidden by lies.

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Positive Money is hopeless:

"When the BoE spends, for example,

£10bn of newly created QE money

to buy gilts from non-banks, both

the central bank money and the

commercial bank credit money

aggregates increase in tandem by

£10bn. All else equal, our money

supply increases"

yes and when the money supply increases, all else equal, the price/value of money falls , ie the money is debased, and you get inflation. Do this for long enough and the currency becomes toilet paper. Zimbabwe?

Positive Money don't even understand simple supply and demand.

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Positive Money is hopeless:

"When the BoE spends, for example,

£10bn of newly created QE money

to buy gilts from non-banks, both

the central bank money and the

commercial bank credit money

aggregates increase in tandem by

£10bn. All else equal, our money

supply increases"

yes and when the money supply increases, all else equal, the price/value of money falls , ie the money is debased, and you get inflation. Do this for long enough and the currency becomes toilet paper. Zimbabwe?

Positive Money don't even understand simple supply and demand.

Please read the PM Proposal document.

http://www.positivemoney.org/wp-content/uploads/2011/04/The-Positive-Money-Proposal-2nd-April-20131.pdf

From page 16:

How the Money Creation Committee Would Work

Each month, the Money Creation Committee would meet and decide whether to increase, decrease,

or hold constant the level of money in the economy. During their monthly meetings the MCC would

decide upon two figures:

1. The amount of new money needed in order to hit their democratically mandated target. If this

target was a simple inflation target, as in the example above, this would mean creating money

in order to maintain aggregate demand at the level consistent with the targeted rate of inflation

(similar to the setting of interest rates today), and;

2. The amount of new lending needed in order to avoid a credit crunch in the real (non-financial)

economy and therefore a fall in output and employment.

etc ...

Hardly 'Zimbabwe' now, is it?

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Please read the PM Proposal document.

http://www.positivem...April-20131.pdf

From page 16:

How the Money Creation Committee Would Work

Each month, the Money Creation Committee would meet and decide whether to increase, decrease,

or hold constant the level of money in the economy. During their monthly meetings the MCC would

decide upon two figures:

1. The amount of new money needed in order to hit their democratically mandated target. If this

target was a simple inflation target, as in the example above, this would mean creating money

in order to maintain aggregate demand at the level consistent with the targeted rate of inflation

(similar to the setting of interest rates today), and;

2. The amount of new lending needed in order to avoid a credit crunch in the real (non-financial)

economy and therefore a fall in output and employment.

etc ...

Hardly 'Zimbabwe' now, is it?

Not if it works as well as you contend. I'd suggest, however, that neither of those objectives is simple or practically achievable. For instance, central banks are currently dependent on a network of commercial lenders to keep them informed about the state of the markets and the economy's reserve requirements. Representatives of the BoE and Treasury consult with so-called Gilt Edged Market Makers every day to undertake the Bank's instructions, feedback from which in turn informs and directs govt spending. It's something of an understatement to say that policy makers often get things wrong - the entire financial crisis can be seen as a systemic under-pricing of risk - but is a Money Creation Committee meeting once a month likely to do any better?

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Please read the PM Proposal document.

http://www.positivemoney.org/wp-content/uploads/2011/04/The-Positive-Money-Proposal-2nd-April-20131.pdf

From page 16:

How the Money Creation Committee Would Work

Each month, the Money Creation Committee would meet and decide whether to increase, decrease,

or hold constant the level of money in the economy. During their monthly meetings the MCC would

decide upon two figures:

1. The amount of new money needed in order to hit their democratically mandated target. If this

target was a simple inflation target, as in the example above, this would mean creating money

in order to maintain aggregate demand at the level consistent with the targeted rate of inflation

(similar to the setting of interest rates today), and;

2. The amount of new lending needed in order to avoid a credit crunch in the real (non-financial)

economy and therefore a fall in output and employment.

etc ...

Hardly 'Zimbabwe' now, is it?

Oh , please !

So, some politburo money committee is going to meet to grace us with their wisdom and put their fingers in the air and get the money supply equation exactly right ?!

Never mind this being impossible to compute, I am so sick of Positive Money and their ignorance.

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Oh , please !

So, some politburo money committee is going to meet to grace us with their wisdom and put their fingers in the air and get the money supply equation exactly right ?!

Never mind this being impossible to compute, I am so sick of Positive Money and their ignorance.

Indeed and there will always be reasons why this will be exceeded. That hospital needs more money to treat an influx of children with whatever-itis!! What politician is going to say "no we wont give any more funds, even though l could simply create it for nothing". Wont wash. Just look at the spastication of the general public in response to the practicaly non-existent attempt by the govt not to spend exponentially more each year.

QE will never go back in the bottle. It will enable the govt to dodge any real decisions that its precious voters might not like. And so the currency will be more and more rapidly debauched til collapse. QE also favours segments of society, exactly how the govt would behave under positive money (unless you push for citizens wage and the govt getting NONE of any freshly minted money) and so QE will be a great way of putting people off the idea of govt issued money/positive money for quite some time.

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Not if it works as well as you contend. I'd suggest, however, that neither of those objectives is simple or practically achievable. For instance, central banks are currently dependent on a network of commercial lenders to keep them informed about the state of the markets and the economy's reserve requirements. Representatives of the BoE and Treasury consult with so-called Gilt Edged Market Makers every day to undertake the Bank's instructions, feedback from which in turn informs and directs govt spending. It's something of an understatement to say that policy makers often get things wrong - the entire financial crisis can be seen as a systemic under-pricing of risk - but is a Money Creation Committee meeting once a month likely to do any better?

To be honest I can't see how it can do much worse than the private banking sector, given their utter failures.

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What do HPC folk think of this positivemoney blog post?

http://www.positivemoney.org/2013/04/qe-monetary-reform-by-stealth/

Yes I get the drift completely but the missing ingredient from PM POV is that base money would need to be made available for holding by individuals.

So everyone would have a current account at the BoE.

But that is not part of the QE program.

And if it was, the rate paid on those personal BoE accounts would need to be negative.

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  • 245 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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