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Carney in "Monarchs of Money" --- merged

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I particularly thought he acted VERY poorly around the 12m20s mark here. Dismissive, conceited, really implying the reporter had no idea what he was talking about, and implying he was omnipotent and could see the bigger picture. I know this IS what central bankers are supposed to be like, but to see it in action, well..

http://www.cbc.ca/player/News/TV+Shows/The+National/ID/2382392339/

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About 2.40 minutes in

Neil Macdonald - CBC News:

"Now to be fair Central Bankers didn't ask for all this immense power they excercise nowadays. It was thrust upon them back in 2008 when the financial system collapsed..........................................................."

Hmmm. So that's the CBs cleared of responsibility for the collapse.

Edited by billybong

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About 2.40 minutes in

Briton a nation of savers? :lol:

Half-expect Carney to give his 'dead-money' argument when he takes his position at the BoE. Savers attacked a few times already for not spending, including corporates sitting on cash. As per the video it say the BoE wants to get us spending in today's market 'for growth' where massive house price peaks exist (or to prevent deflation), as evidenced with low base rate and rates on savings. Carney however given savers a swipe with him calling it 'dead money'.

The Star piece contained the following summary of the “dead money” controversy:“[Mr. Carney’s] remark last year about corporate Canada hoarding billions of dollars in ‘dead money’ touched a nerve with the business community, which insisted his analysis was misleading and that it was wise for companies to be cautious at a time of world economic uncertainty.”

Last summer the Bank of Canada was telling corporate Canada that it should invest more and sit on less cash, because in their view the economy was improving. Corporate Canada pushed back, suggesting that there was still a great deal of downside risk to the economy. The Bank of Canada’s economic forecasts proved to be wildly optimistic and the business community’s concerns, in retrospect, look downright prescient.

It is puzzling to me why Mark Carney would continue to tell corporate Canada that their investment decisions are wrong, given how off the mark the Bank of Canada’s forecasts were. I can understand Mr. Carney’s frustration, as an increased rate of investment spending by Canadian business would improve Canadian economic performance. The Bank of Canada would be better served, however, to listen to corporate Canada and the bond market , rather than assuming firms are making mistakes.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/boc-listening-to-wrong-voices-in-dead-cash-debate/article8666202/

Mr. Carney rejected the suggestion that he may be remembered as Canada’s Alan Greenspan – the former U.S. Federal Reserve Bank chief who many critics blame for inflating the housing bubble in that country – if there’s a housing crash.“I’m coming back, so I’ll take responsibility if, if, well, that’s not going to happen,” he said. “I’m also coming back, so I’m here to face the consequences, ultimately.”

http://www.theglobeandmail.com/report-on-business/economy/more-adjustment-to-come-in-home-prices-carney/article8776308/

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Briton a nation of savers? :lol:

Half-expect Carney to give his 'dead-money' argument when he takes his position at the BoE. Savers attacked a few times already for not spending, including corporates sitting on cash. As per the video it say the BoE wants to get us spending in today's market 'for growth' where massive house price peaks exist (or to prevent deflation), as evidenced with low base rate and rates on savings. Carney however given savers a swipe with him calling it 'dead money'.

http://www.theglobea...article8666202/

http://www.theglobea...article8776308/

the "dead money" argument is indeed outrageous coming from the mouth of a banker.

The whole Reason banks exist is to take excess savings and INVEST them in productive economic activity, the bank netting the arbitrage of interest rates. They are a market place for people with excess looking for a safe place to deposit, and an entreprenuer looking for some capital to build his dream business.

This "dead money" is what they are supposed to be investing.

Instead, they place it on red.....

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Carney however given savers a swipe with him calling it 'dead money'.

That's the pension sector gone for a Burton.

Carney's is going to be a disaster for the UK.

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the "dead money" argument is indeed outrageous coming from the mouth of a banker.

My dead-money, what I have of it, has seen its value fall against the 15+ years of house price inflation via the extension of credit. Including huge refinflation since 2008, that bailed out many over-extended stupid borrowers. If having savings where savings are scarce is dead money, what do you call policies to hyper-inflate house prices? It's not productive investment, or lending, when it gets to the stages borrowers begin defaulting.

Generally older homewners with houses inflated to absolute massive value highs, and younger people so nightmarishly priced out. And loads of other borrowers in the middle who chose to take on the debt to buy.

Can't see the live-money opportunities against house prices or so many other business investment opportunities, except in a gambling sense, which relies on BoE and other central banks continuing to keep QEing 10s and 100s of billions at a time, and holding base rates low.

Edit: it's to its

Edited by Venger

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About 2.40 minutes in

"Now to be fair Central Bankers didn't ask for all this immense power they excercise nowadays. It was thrust upon them back in 2008 when the financial system collapsed..........................................................."

Hmmm. So that's the CBs cleared of responsibility for the collapse.

Let's remember Carney is ex-Goldman.

And just today, JPM now 'owns' the SEC:

http://www.zerohedge.com/news/2013-05-01/and-its-next-act-jpmorgan-takes-over-sec

And For Its Next Trick, JPMorgan Takes Over The SEC

Financial Collapse-> print$$, lower rates, remove price signals from equity/bond/pm markets -> CB power, massive bonuses

Problem -> reaction -> solution

But what we also get is an economy where no-one is incentivised to do anything.

You can't compete with a monopoly.

So demand for credit shrinks.

Who is John Galt???

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http://en.wikipedia.org/wiki/Mark_Carney

Carney spent thirteen years with Goldman Sachs in its London, Tokyo, New York and Toronto offices. His progressively more senior positions included co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking. He worked on South Africa's post-apartheid venture into international bond markets, and was involved in Goldman's work with the 1998 Russian financial crisis.

hmm.. having visited Russia recently, I have to say I am more frightened now than I was.

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Canadian TV gives us glimpse of Mark Carney..... and it's not good.

He rather puts me in mind of Nick Leeson. Swap the Nikkei for the UK housing market and Barings' capital base for a trillion pounds of QE and the analogy is complete.

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Historically peasants would each rent a bit of land from a landowner who enjoyed enormous income, wealth and power derived from this unearned income. The peasants had no choice, if they wanted access to land to grow food and make a living, they had to pay for the privilege.

The money system exhibits a similar 'rentier' structure. We pay interest to the commercial banking system for almost every pound in circulation. We pay for the very existence of a viable and essential medium of exchange. If we didn't pay this unearned 'rent' on our money supply, it would not exist. We would not be able to conduct our business, we would not be able to earn a living. We are trapped by our money system as much as our ancestors were trapped by their land owners.

The alternative money system proposed by positivemoney (and others) is analogous to a return to 'common' land - the money supply issued collectively and debt-free as a common utility.

We would no longer have to pay 'rent' for the use of it.

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Historically peasants would each rent a bit of land from a landowner who enjoyed enormous income, wealth and power derived from this unearned income. The peasants had no choice, if they wanted access to land to grow food and make a living, they had to pay for the privilege.

The money system exhibits a similar 'rentier' structure. We pay interest to the commercial banking system for almost every pound in circulation. We pay for the very existence of a viable and essential medium of exchange. If we didn't pay this unearned 'rent' on our money supply, it would not exist. We would not be able to conduct our business, we would not be able to earn a living. We are trapped by our money system as much as our ancestors were trapped by their land owners.

The alternative money system proposed by positivemoney (and others) is analogous to a return to 'common' land - the money supply issued collectively and debt-free as a common utility.

We would no longer have to pay 'rent' for the use of it.

And no it isn't.

Most money (the so called 97%) or so are created by borrowers, through the bank and pledge to re-obtain these money/credit at later date and to extinguish the loan liabilities. They give this newly created to supplier of services, labour, captial equipment and property etc and received the service/equipment in return.

The current lending model is fine except the problem that the bank Director have limited liabilities and banks don't have enough capital to cover the loses. Further these Basel II sovereign debt / AAA requires 0% capital reserve trickery was the issue.

+ve money wants the government to create all the money - it is probably as bad as government creating all the jobs. Even the tough talking George has not show us the government is actually capable of stop spending money it doesn't have.

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Worth watching, the big line was there wont be a good way out of this, just a least bad way.

The questions really is who are the winners and losers are because QE at the end of the day is an exercise of picking (or creating) winner.

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+ve money wants the government to create all the money - it is probably as bad as government creating all the jobs. Even the tough talking George has not show us the government is actually capable of stop spending money it doesn't have.

The positivemoney model is that the state/collective/people/nation would create all future increments in the money supply.

The initial reform is that the status of all existent money is changed overnight from being a bank-credit IOU to being actual money legally owned by the bank account holder.

New money would thereafter be issued by the state in concert with real economic growth and, as a component of state spending, it would be dwarfed by tax revenues.

The 'money reform would make us all commies' argument is a straw man.

Do please read the PM proposal:

http://www.positivemoney.org/wp-content/uploads/2013/04/The-Positive-Money-Proposal-2nd-April-2013.pdf

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The questions really is who are the winners and losers are because QE at the end of the day is an exercise of picking (or creating) winner.

Winners? Easy - those closest to the source of the new money. Those who get access to the new issuance first.

The Banks in other words.

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The 'money reform would make us all commies' argument is a straw man.

Do please read the PM proposal:

http://www.positivemoney.org/wp-content/uploads/2013/04/The-Positive-Money-Proposal-2nd-April-2013.pdf

Look at this one:

The decision on whether to increase or decrease the money supply would be taken by a completely independent and transparent body, the Monetary Creation Committee, in line with an inflation target set by government.

and then take a look a MPC and Carney and we all know how well this work in practise.

Removing from circulation taxes collected by the government (with the government’s permission).

Firstly, George will need to show us that Government is actually able to spend less money then previous year.

The investment account and custody accounts concepts are sound - but that doesn't require handling the money creation power to the 'committee' who will no doubt be staffed by utmost selfless and honest men and women.......... (from the City...)

Edited by easy2012

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The investment account and custody accounts concepts are sound - but that doesn't require handling the money creation power to the 'committee' who will no doubt be staffed by utmost selfless and honest men and women.......... (from the City...)

Well, someone has to have the power to expand and contract the money supply.

Politicians - to buy the next election?

Commercial bankers - to blow asset bubbles etc.?

A public body as politically neutral, transparent and accountable as we can possibly make it?

Of course I agree that everything is vulnerable to abuse and corruption.

We can only do our best and be eternally vigilant.

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The questions really is who are the winners and losers are because QE at the end of the day is an exercise of picking (or creating) winner.

Its a bit like saying who will be the winners and losers on the titanic, but right now those with big BTL portfolios, The Wilsons etc are the winners, though it galls me to say it. ;)

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Well, someone has to have the power to expand and contract the money supply.

Politicians - to buy the next election?

Commercial bankers - to blow asset bubbles etc.?

A public body as politically neutral, transparent and accountable as we can possibly make it?

Of course I agree that everything is vulnerable to abuse and corruption.

We can only do our best and be eternally vigilant.

Yes and the current system of money creation is perfectly fine - people borrow and pledge a loan deeds, use the money for investment (ah..that is the catch), and then work/get/steal the money to repay to cancel the loan deeds.

This is an abstraction of what economic activities is about - I gain something I need from others, and then I provide my service/goods/assets in order to repay the something I took from others.

The CB reserve acts like Gold bar in the olden days, and bank credit the receipts. QE itself obviously does not increase the money supply until the government spends it. Without CB creation of the reserves, obviously the bond market would have revolted by now - borrowing £120+ billion will force the rates up particularly if such borrowing means the capital reserve gets hit at the same time.

Rather than needing a money creation committee, CB should just stick to its inflation targeting of 1% (as with ECB, 2% is too generous and 1% allow for acceptable small error).

Finally - a bank whose managers will go bust will behave a lot more properly than one who don't and the segregated custody account eliminate the too big to fail.

Another thing is that with +ve money proposal bank loan rates (funded by investment account only) will sky rocket - and whether this is desirable will obviously depending on whether one is cash rich or loaded with debt.

Edited by easy2012

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We can only do our best and be eternally vigilant.

It's never worked in all of human history. Every paper currency, without exception, dies. And death is overdue on the current batch.

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It's never worked in all of human history. Every paper currency, without exception, dies. And death is overdue on the current batch.

Sterling is about 319 years old. The British pound was defined as 12 troy ounces of silver, so it's worth less than 1/200 or 0.5% of its original value. This is about 3% per year.

But it has not died..

:-)

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Yes and the current system of money creation is perfectly fine - people borrow and pledge a loan deeds, use the money for investment (ah..that is the catch), and then work/get/steal the money to repay to cancel the loan deeds.

This is an abstraction of what economic activities is about - I gain something I need from others, and then I provide my service/goods/assets in order to repay the something I took from others.

The CB reserve acts like Gold bar in the olden days, and bank credit the receipts. QE itself obviously does not increase the money supply until the government spends it. Without CB creation of the reserves, obviously the bond market would have revolted by now - borrowing £120+ billion will force the rates up particularly if such borrowing means the capital reserve gets hit at the same time.

Rather than needing a money creation committee, CB should just stick to its inflation targeting of 1% (as with ECB, 2% is too generous and 1% allow for acceptable small error).

Finally - a bank whose managers will go bust will behave a lot more properly than one who don't and the segregated custody account eliminate the too big to fail.

Another thing is that with +ve money proposal bank loan rates (funded by investment account only) will sky rocket - and whether this is desirable will obviously depending on whether one is cash rich or loaded with debt.

Managers move.

At what point to managers cease to be accountable for the lending on their watch, considering 25+ year products?

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  • 238 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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