Jump to content
House Price Crash Forum
Sign in to follow this  
SleepyHead

"the Central Banks Are All At It, Counterfeiting Money"

Recommended Posts

He's absolutely right of course, but he won't get anywhere delivering his message in that sort of tone.

(Not that he'd get anywhere with the Eurocrats regardless...)

Share this post


Link to post
Share on other sites

He's absolutely right of course, but he won't get anywhere delivering his message in that sort of tone.

(Not that he'd get anywhere with the Eurocrats regardless...)

I suspect his tone is due to not getting anywhere with the Eurocrats over years.

Edited by DogTired

Share this post


Link to post
Share on other sites

How is he right?

Ignoring the fact central banks can't make counterfeit notes - at best print genuine money needlessly.

The community reinvestment act did not force US banks to not check whether customers could repay loans. That is false.

In fact - most governments have followed a policy of deregulation in recent decades which led to the financial crisis. Opposite of his point.

Obviously spent 35yrs in financial services snorting cocaine or similar as his insight is woeful.

Share this post


Link to post
Share on other sites

Ignoring the fact central banks can't make counterfeit notes - at best print genuine money needlessly.

Genuine money? They make a claim it's worth X but if they keep printing it effectively becomes worthless. Fountain of Fortune covers China's money evolution from 1000-1700 the Chinese economy was full of counterfeit money and at certain time points it was more valuable and more desired than official money.

Money only has value if people want it. If you start messing with the value of money by creating more "genuine" money people reject it.

Share this post


Link to post
Share on other sites

How is he right?

Ignoring the fact central banks can't make counterfeit notes - at best print genuine money needlessly.

The community reinvestment act did not force US banks to not check whether customers could repay loans. That is false.

In fact - most governments have followed a policy of deregulation in recent decades which led to the financial crisis. Opposite of his point.

Obviously spent 35yrs in financial services snorting cocaine or similar as his insight is woeful.

Counterfeit (adj): Made in imitation of what is genuine with the intent to defraud

The citizens of the UK think that their money is genuine and work/save for it. The BOE prints more without work or saving, it creates it out of thin air, and this defrauds those people who have worked/saved by reducing the value of their work/savings. I think that fits the definition of counterfeit.

The community reinvestment act effectively required US banks to make loans that were less than prudent, and an act encouraging this along with the FDIC backing up any losses created the conditions for the sub-prime bubble.

It's not the removal of regulation that caused the financial crisis, it's the removal of responsibility by first implicit and then latterly real bailouts for financial institutions. Private gains, social losses, is the cause of the financial crisis.

Share this post


Link to post
Share on other sites

How is he right?

Ignoring the fact central banks can't make counterfeit notes - at best print genuine money needlessly.

The community reinvestment act did not force US banks to not check whether customers could repay loans. That is false.

In fact - most governments have followed a policy of deregulation in recent decades which led to the financial crisis. Opposite of his point.

Obviously spent 35yrs in financial services snorting cocaine or similar as his insight is woeful.

Hmmm.If central banks make paper notes with their name on it,then they can not be accused of counterfeiting their own design.

Paper notes contain the "promise" that BOE will pay the "bearer" of such note "the sum of..." which was originally based on the weight of silver.That promise was broken a very long time ago, hence the £ now is worth this little nowadays.

It is even much worse now,because the Central Banks do not even print notes (that is expensive).

Instead,they "create" virtual money which starts it's life at the Central Banks' computer.

Nowhere on that virtual money is even the (false) "promise" to pay the bearer the sum of...

Hence,instead of counterfeiting,they should be accused of fraud because of their deliberate false promises that they will pay something which they do not have and never will (in regard to the banknotes and coins which they manufacture).

Ironically,with the "manufacture" (press Enter on the computer keyboard) of virtual money they are not promising anything, hence technically they cannot even be accused of fraud.

Share this post


Link to post
Share on other sites

The fraud is when they promise not to debase it more than a certain amount - i.e. the intended target inflation rate.

On the basis of HPI, general infaltion, manipulation of the inflation stats, manipulation and changing of targets, inflation metrics, overall policy they certainly are fraudsters, manipulators and con merchants. Their remit and their activities associated with that remit are nothing but a tissue of lies.

Share this post


Link to post
Share on other sites

The fact is - central banks make genuine money. Put the dictionary away.

The fact is the CRA meant banks had to do profitable business in all the communities they were represented in. Introduced in 1977. No specific targets. No specific rules. Probably brought in to combat loan sharks.

Banks taking excessive risks (sacking anyone that blew the whistle, or disagreed) meant a sub prime loan explosion. Who thought sales targets would be a good idea in banking?? (The bankers - they were not forced to do it)

And other risky loans like commercial property, BTL, loans to tycoons without any questions asked.

Share this post


Link to post
Share on other sites

The fact is - central banks make genuine money. Put the dictionary away.

The fact is the CRA meant banks had to do profitable business in all the communities they were represented in. Introduced in 1977. No specific targets. No specific rules. Probably brought in to combat loan sharks.

Banks taking excessive risks (sacking anyone that blew the whistle, or disagreed) meant a sub prime loan explosion. Who thought sales targets would be a good idea in banking?? (The bankers - they were not forced to do it)

And other risky loans like commercial property, BTL, loans to tycoons without any questions asked.

Basically, the only difference between me printing money, and a bank printing money, is that banks are allowed to.

They are allowed to because they give money to the politicians that allow them to.

That, underneath it all, is the truth of the matter.

Share this post


Link to post
Share on other sites

Genuine money? They make a claim it's worth X but if they keep printing it effectively becomes worthless. Fountain of Fortune covers China's money evolution from 1000-1700 the Chinese economy was full of counterfeit money and at certain time points it was more valuable and more desired than official money.

Money only has value if people want it. If you start messing with the value of money by creating more "genuine" money people reject it.

People don't get a say in choosing what they use as currency - that's the whole point of fiat currency.

Of course, ultimately if the authorities push it too far they make their own fiat currency unworkable but they can push very far indeed (see the Weimar inflation, people kept faith in money for a long long time after the hyperinflation started).

Share this post


Link to post
Share on other sites

Hmmm.If central banks make paper notes with their name on it,then they can not be accused of counterfeiting their own design.

Paper notes contain the "promise" that BOE will pay the "bearer" of such note "the sum of..." which was originally based on the weight of silver.That promise was broken a very long time ago, hence the £ now is worth this little nowadays.

It is even much worse now,because the Central Banks do not even print notes (that is expensive).

Instead,they "create" virtual money which starts it's life at the Central Banks' computer.

Nowhere on that virtual money is even the (false) "promise" to pay the bearer the sum of...

Hence,instead of counterfeiting,they should be accused of fraud because of their deliberate false promises that they will pay something which they do not have and never will (in regard to the banknotes and coins which they manufacture).

Ironically,with the "manufacture" (press Enter on the computer keyboard) of virtual money they are not promising anything, hence technically they cannot even be accused of fraud.

A bank note is basically a cheque, made out to the bearer. If I write a cheque to the bearer for five pounds would I be arrested for fraud?

Money has been dematerialized ever since the cheque was invented. The Central Bank has been creating money with a flick of the pen since we came off the gold standard.

The unit of currency in the UK is the pound. A note will pay you that. They do not claim to offer anything else.

Share this post


Link to post
Share on other sites

The fact is - central banks make genuine money. Put the dictionary away.

The fact is the CRA meant banks had to do profitable business in all the communities they were represented in. Introduced in 1977. No specific targets. No specific rules. Probably brought in to combat loan sharks.

Banks taking excessive risks (sacking anyone that blew the whistle, or disagreed) meant a sub prime loan explosion. Who thought sales targets would be a good idea in banking?? (The bankers - they were not forced to do it)

And other risky loans like commercial property, BTL, loans to tycoons without any questions asked.

As soon as I heard him say..... It started with the community investment act....*roll eyes* *hit stop* *ignore whatever other useless crap he was going to spout*

Share this post


Link to post
Share on other sites

Counterfeit (adj): Made in imitation of what is genuine with the intent to defraud

The citizens of the UK think that their money is genuine and work/save for it. The BOE prints more without work or saving, it creates it out of thin air, and this defrauds those people who have worked/saved by reducing the value of their work/savings. I think that fits the definition of counterfeit.

The community reinvestment act effectively required US banks to make loans that were less than prudent, and an act encouraging this along with the FDIC backing up any losses created the conditions for the sub-prime bubble.

It's not the removal of regulation that caused the financial crisis, it's the removal of responsibility by first implicit and then latterly real bailouts for financial institutions. Private gains, social losses, is the cause of the financial crisis.

1) All money comes from nothing. If anything the only institution that should create money should be the CB's on behalf of the gov. Then use that money to replace part of the taxes we pay.

Also if CB's counterfeit money, then what the heck do private backs do day in and day out, and have been doing for the last couple hundred years??? Why the hell is he so quiet on that one???

2)*rolleyes* I've heard that crap posted sooo many times. The american right love it, especially the nutjobs (what a surprise a UKIP MP believes it too!). Shame its a total load of nonsense. All the CRA required is that you cannot set interest rates or deny loans based on race, and if you take in deposits in an area that's where you operate in terms of making loans, with very very strong protections on the terms of the loans,

So if you have a white person who has xxxx credit score, has yyyy assets, and zzzz risk profile and you make him a loan. Then you cannot deny a loan to a black individual with those exact same xxxx, yyyy, zzzz.

In fact if you look at the statistics for the number of loans that qualified as CRA (I have since I argued with someone else about this when I lived in the U.S), you'll find that the subprime lenders such as countrywide made next to zero of them. This is because the practices they used are forbidden under CRA. So CRA does not allow things such as no-downpayment loans, or teaser-rate mortgages, or NINJA loans. They are all specifically forbidden under CRA.

You'll also note that as the US bubble grew the percentage of loans that qualified under the CRA shrank and shrank. I.e. some decent quality loans were still being made by small local honest lenders, as they had been for 30 years or more. But the fraud shops, countrywide and co, were churning out ever greater number of fraudulent loans, massively expanding the total loan base.

Eventually those mortgages blew up, causing massive problems in ethnically white states and white regions of states. So places like Arizona, south Florida, etc. Regions where the other ethnicities congregated, and so where CRA mortgages existed in relatively high proportion (new jersey, inner city Philadelphia, etc) saw little of a housing bust.

Edited by alexw

Share this post


Link to post
Share on other sites

(The bankers - they were not forced to do it)

I was 'with you' as, what seemed, a rare rational voice - until the above.

I'm up for banker-bashing as much as the next person, but it's a mistake to think that any individual banker had any choice. At the top, the board would have been replaced in a heartbeat if they refused to make short-term profit when other banks were doing exactly that... and, from there on down, the choice was between being a reckless banker and leaving the industry. Now, this doesn't mean I've respect for those who stayed - but it does require that I have some understanding.

The real problems are deeper and more systemic than you imagine. There's a problem with private ownership of banks... and the matter is exacerbated when banks ownership (and the ownership of multinational corporations) is managed by 'professional investors' - who are both dependent upon banks and who have no reason to care about long term value. In combination these factors led to the wrong compensation structures and the wrong kind of accountability system-wide. As greedy and scummy as the bankers have been shown to be, it is inevitable that they would be so... if a banker would dare to be less scummy or less greedy, there has been an immense line of even more ruthlessly greedy and shamelessly scummy replacements eager to fill their predecessor's shoes. We really aren't in a much better situation now... there's still no accountability... we've evaded bank bankruptcies - and the exact same demographic remain lucratively in the driving seat of an out-of-control train - irrespective spectacular, demonstrated, failures.

Share this post


Link to post
Share on other sites

Hmmm.If central banks make paper notes with their name on it,then they can not be accused of counterfeiting their own design.

Paper notes contain the "promise" that BOE will pay the "bearer" of such note "the sum of..." which was originally based on the weight of silver.That promise was broken a very long time ago, hence the £ now is worth this little nowadays.

It is even much worse now,because the Central Banks do not even print notes (that is expensive).

Instead,they "create" virtual money which starts it's life at the Central Banks' computer.

Nowhere on that virtual money is even the (false) "promise" to pay the bearer the sum of...

Hence,instead of counterfeiting,they should be accused of fraud because of their deliberate false promises that they will pay something which they do not have and never will (in regard to the banknotes and coins which they manufacture).

Ironically,with the "manufacture" (press Enter on the computer keyboard) of virtual money they are not promising anything, hence technically they cannot even be accused of fraud.

The central bank can only legally print money to a level designated by Parliament - the fiduciary issuance of about 65 Billion. The virtual money you describe is a promise to supply that money - an act I think could be argued as counterfeiting.

Share this post


Link to post
Share on other sites

I was 'with you' as, what seemed, a rare rational voice - until the above.

I'm up for banker-bashing as much as the next person, but it's a mistake to think that any individual banker had any choice. At the top, the board would have been replaced in a heartbeat if they refused to make short-term profit when other banks were doing exactly that... and, from there on down, the choice was between being a reckless banker and leaving the industry. Now, this doesn't mean I've respect for those who stayed - but it does require that I have some understanding.

The real problems are deeper and more systemic than you imagine. There's a problem with private ownership of banks... and the matter is exacerbated when banks ownership (and the ownership of multinational corporations) is managed by 'professional investors' - who are both dependent upon banks and who have no reason to care about long term value. In combination these factors led to the wrong compensation structures and the wrong kind of accountability system-wide. As greedy and scummy as the bankers have been shown to be, it is inevitable that they would be so... if a banker would dare to be less scummy or less greedy, there has been an immense line of even more ruthlessly greedy and shamelessly scummy replacements eager to fill their predecessor's shoes. We really aren't in a much better situation now... there's still no accountability... we've evaded bank bankruptcies - and the exact same demographic remain lucratively in the driving seat of an out-of-control train - irrespective spectacular, demonstrated, failures.

Of course, if the shower of shit at the Financial Services Authority had done their jobs half competently we might not be in the mess we're in now.

https://en.wikipedia...vices_Authority

The FSA rarely took on wider implication cases. For example, thousands of consumers have complained to the Financial Ombudsman Service about payment protection insurance (PPI) and bank charges. However, despite determining that there was a problem in the selling of PPI,[32][33][34] the FSA took effective action against very few firms in the case of PPI and it was the Office of Fair Trading (OFT) that finally took on the wider implications role in the case of bank charges. The FSA and the FOS had staff placed within their co-organisation in order to advise on wider implication issues. It is surprising, therefore, that so little action took place.[citation needed]

The FSA in an internal report into the handling of the collapse in confidence of customers of the Northern Rock Plc described themselves as inadequate.[35] It was reported that in order to prevent such a situation occurring again, the FSA was considering allowing a bank to delay revealing to the public when it gets into financial difficulties.[36]

The FSA was criticised in the final report of the European Parliament's inquiry into the crisis of the Equitable Life Assurance Society.[37] It is widely reported that the long awaited Parliamentary Ombudsman's investigation into the government's handling of Equitable Life is equally scathing of the FSA's handling of this case[38]

The FSA ignored warning signals from Northern Rock building society and continued to allow the bank to operate without a risk mitigation programme for months before the bank's collapse.[39]

The FSA was criticised by some within the IFA community for increasing fees charged to firms and for the perceived retroactive application of current standards to historic business practices.[citation needed]

The perceived lack of action by the FSA in many cases, and allegations of regulatory capture led to it being nicknamed the Fundamentally Supine Authority by Private Eye magazine.

The FSA was not legally able to circumvent statute yet hid behind secret legal opinion regarding its summary removal of practitioners' legal rights in respect of their ability to use a longstop defence against stale claims.

FSA regulation was also often regarded as reactive rather than proactive.[citation needed] In 2004-05 the FSA was actively involved in crackdowns against financial advice firms who were involved in the selling of split-cap investment trusts and precipice bonds, with some success in restoring public confidence.[citation needed]. However, despite heavily criticising split-cap investment trusts, in 2007 it suddenly abandoned its investigation.[40] Where it was rather poorer in its remit is in actively identifying and investigating possible future issues of concern, and addressing them accordingly.[citation needed]

There were also some questions raised about the competence of FSA staff.[41]

The composition of the FSA board appeared to consist mainly of representatives of the financial services industry and career civil servants. There were no representatives of consumer groups. As the FSA was created as a result of criticism of the self-regulating nature of the financial services industry, having an independent authority staffed mainly by members of the same industry could be perceived as not providing any further advantage to consumers.

Although one of the prime responsibilities of the FSA was to protect consumers, the FSA was active in trying to ensure companies' anonymity when they were involved in misselling activity, preferring to side with the companies that have been found guilty rather than consumers.[42][43]

This was most obviously seen in the case known as the LAUTRO 19, where the FSA identified 19 insurers which had breached their contractual warranties by using incorrect charges to calculate the premiums for mortgage endowment policies. This miscalculation led to massive consumer detriment as well as vast and unquantifiable costs for the advisers who unwittingly sold these products. The FSA steadfastly refused to publicly name the miscreant companies and spent £100,000s on legal fees to baulk the efforts of the Information Commissioner who had concluded that naming the companies would be in the public interest.

It was announced in November 2008, that despite self-acknowledged failures by the FSA in effectively regulating the financial services industry, FSA staff would receive bonuses.[44] On 31 May 2008, The Times confirmed that FSA staff had received £20m in bonuses for 2008/09, a 40% increase on the previous year.[45]

On 11 February 2009, FSA deputy chairman, Sir James Crosby resigned after it was revealed that he had fired a whistleblower, Paul Moore, who had warned of dangerous lending practices at HBOS when he had been in charge of risk regulation.[46]

Lord Adair Turner, the then FSA chairman, defended the actions of the regulator on the BBC's Andrew Marr show on 13 February 2009. His comments were that other regulatory bodies throughout the world, which had a variety of different structures and which are perceived either as heavy touch or light touch also failed to predict the economic collapse. In line with the other regulators, the FSA had failed intellectually by focusing too much on processes and procedures rather than looking at the bigger economic picture. In response as to why Sir James Crosby had been appointed deputy chairman when his bank HBOS had been highlighted by the FSA as using risky lending practises, Lord Turner said that they had files on almost every financial institution indicating a degree of risk.[47]

Turner faced further criticism from the Treasury Select Committee on 25 February 2009, especially over failures to spot or act on reckless lending by banks before the crisis of 2008 occurred. He attributed much of the blame on the politicians at the time for pressuring the FSA into "light touch" regulation.[48]

On 17 April 2009, a whistleblower (former FSA employee) alleged that the FSA had turned a blind eye to the explosion in purchases of whole sale loans taken on by various UK building societies from 2005 onwards. The FSA denied the claims - "This is not whistleblowing, it is green ink" a spokesman said. "The allegations are a farrago of lies, distortions and half truths made by an obviously disgruntled former employee who clearly has an axe to grind. It does not paint a realistic picture of our supervision of building societies."[49]

On 18 August 2012, the Treasury Select Committee criticised the FSA for its poor enforcement of the LIBOR rate setting rules.[50]

Edited by zugzwang

Share this post


Link to post
Share on other sites

Of course, if the shower of shit at the Financial Services Authority had done their jobs half competently we might not be in the mess we're in now.

[/sup]

The FSA did not do too well in the lead up to the financial crisis, but of course, it no longer exists. Its successors appear to have more teeth.

Most of the issues you refer to are historical and it underwent quite a lot of change post-crisis. It never regulated LIBOR, so the Treasury Select Committee was talking rubbish when it blamed the FSA for that.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   217 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.