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Bbc's Economics Editor Joins Jp Morgan

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BBC’s Economics Editor, Stephanie Flanders, Joins JP Morgan

http://www.maxkeiser.com/2013/09/bbcs-economics-editor-stephanie-flanders-joins-jp-morgan/

She has written about her move here:

http://www.bbc.co.uk/news/business-24289113

Her reward for protecting the status quo for so long.

I have been following her articles for quite some time. I can not recall here ever questioning the debt-based economic system or fractional reserve banking. I cannot recall her advising her readers to diversify their assetts out of the banking system. As bad as that idiot who runs Money Saving Expert.

I even read in a recent article of hers the recurring myth of a manufacturing-led recovery in the UK. :lol:

In every article she trots out the same idea that the power lies with the Federal Reserve or the Bank of England, that they are the masters of the economic universe. Whereas in reality we know that they are have no real influence in this rigged game.

But can we really expect anything better from the BBC?

It is just a shame she can't take that tool Robert Peston with her.

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Robert Peston will be dancing for joy. She grabs bits of the limelight when she's around. Fortunately for him she was on maternity leave for 2007/2008 and Peston was able to grab all the credit crunch glory by himself. Strictly speaking credit crunch is economics not business but he was there and she was not. That made him the man he is today.

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I can not recall here ever questioning the debt-based economic system

3 questions

  1. What is a "debt based economic system"?

  2. What is the alternative to a "debt based economic system"?

  3. Has any country ever sucessfully implemented a "non-debt based economic system"?

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3 questions

  1. What is a "debt based economic system"?
  2. What is the alternative to a "debt based economic system"?
  3. Has any country ever sucessfully implemented a "non-debt based economic system"?

google "greenback" for the US economy...Government issued notes, not borrowed from the Federal reserve.

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3 questions

  1. What is a "debt based economic system"?

  2. What is the alternative to a "debt based economic system"?

  3. Has any country ever sucessfully implemented a "non-debt based economic system"?

1. An economic system were money is created as debt.

2. A currency based on precious metals e.g. a gold standard.

3. All ancient societies (bar china) as far as I am aware, up until the 1800s (it is difficult to define after then).

I would be fine with a debt-based economic system which was controlled by the government by the way. I just object to private banks being able to create credit (via. banking licenses).

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3 questions

  1. What is a "debt based economic system"?

  2. What is the alternative to a "debt based economic system"?

  3. Has any country ever sucessfully implemented a "non-debt based economic system"?

Err the banks need to expand debt to remain technically solvent whilst being actually completely broke.

Alternative, use savings as funds for lending and pay a decent rate of return.

Crazy I know...

She always seemed to be in her own little world to me.

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1. An economic system were money is created as debt.

2. A currency based on precious metals e.g. a gold standard.

Unless we use physical gold as a currency is there not still an element of debt in that currency.

E.G the bank issues notes that can be exchanged for gold but that note represents a debt from the bank to you.

More to the point there's nothing in the gold standard to stop banks creating debt and money anyway, the origins of fractional reserve banking lie in the realisation that they did not need to hold as much gold as they promised to pay out.

Are you instead arguing for some kind of 100% reserve banking system? Actually even then is that not still debt based?

3. All ancient societies (bar china) as far as I am aware, up until the 1800s (it is difficult to define after then).

Sorry, should have been more precise, have any modern societies managed to implement a non-debt based economy?

I would be fine with a debt-based economic system which was controlled by the government by the way. I just object to private banks being able to create credit (via. banking licenses).

Why?

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He also had an inside line into the Labour government. By all accounts they were briefing him - FT started to call it 'Pestowire'.

The fact his father is a Labour Peer in the House of Lords is purely coincidental.

Don't forget the Eds, both of them.

Edit: Flanders that is.

Edited by Bruce Banner

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Unless we use physical gold as a currency is there not still an element of debt in that currency.

E.G the bank issues notes that can be exchanged for gold but that note represents a debt from the bank to you.

More to the point there's nothing in the gold standard to stop banks creating debt and money anyway, the origins of fractional reserve banking lie in the realization that they did not need to hold as much gold as they promised to pay out.

Are you instead arguing for some kind of 100% reserve banking system? Actually even then is that not still debt based?

If it is 100% reserved it is not debt based but that would never be brought in IMO. You are right that banks could lend out more money than they have in reserve, but this is fraud. It is just not punished. It was severely punished in the middle ages.

It is interest that is the problem, more than the nature of how much is held in reserve. By charging interest it encourages irresponsible lending, and means wealth is transferred to those who issue credit.

I posted this in another thread:

Sorry, should have been more precise, have any modern societies managed to implement a non-debt based economy?

None as far as I am aware. Although Gaddafi in Libya and Saddam Hussein in Iraq both hinted at doing it.

http://rt.com/news/economy-oil-gold-libya/

Why?

This response will get a little messy as I can only really guess as to what the government might or might not do.

I want the government to control the money supply because then politicians (and by extension tax payers) would have control of how much money (debt) is in the economy.

House prices have risen because banks have the power to pump money into the economy and the easiest way to do this is via lending against fixed assets such as houses. It is difficult to led to businesses (especially small and medium sized business) so most banks put little effort into it. Yet is is these businesses that create wealth. A government controlled money supply would, in my opinion, increase lending to small and medium businesses as they would see that by doing this the economy would grow in real terms.

Also, the gains from lending (interest) would go to the state and not private banks. Have you ever wondered why the nicest looking buildings on every high street are banks? Why the best computer systems are (generally) owned by banks? Why those who run banks can award themselves massive bonuses far in excess of anything awarded in the manufacturing sector? Because by charging interest the wealth in society is transferred to those who issue credit.

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Unless we use physical gold as a currency is there not still an element of debt in that currency.

E.G the bank issues notes that can be exchanged for gold but that note represents a debt from the bank to you.

More to the point there's nothing in the gold standard to stop banks creating debt and money anyway, the origins of fractional reserve banking lie in the realisation that they did not need to hold as much gold as they promised to pay out.

Are you instead arguing for some kind of 100% reserve banking system? Actually even then is that not still debt based?

I interpret "debt-based" as meaning that debt issuance does not cause the money to exist in two places at once - not the total absence of debt itself. For example if I lend money on zopa, my money is gone until the borrower actually repays it.

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It is interest that is the problem, more than the nature of how much is held in reserve. By charging interest it encourages irresponsible lending, and means wealth is transferred to those who issue credit.

How does one borrow money without paying interest. Why would a bank or anyone else make an interest free loan to someone when to do so costs money and bears a risk of default?

Short of shutting down the banking system entirely I don't see how you get rid of interest.

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How does one borrow money without paying interest. Why would a bank or anyone else make an interest free loan to someone when to do so costs money and bears a risk of default?

Short of shutting down the banking system entirely I don't see how you get rid of interest.

Islam does this. You just charge a fee.

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This would explain Hugh Pym's increasing promince again recently on the BBC website.

Hugh Pym, Oh Please! He'd struggle with the complex workings of a piggy bank and still underwhelm his depth of economic knowledge to the average Sun reader. Or perhaps I'm biggin' up his abilities a little too much.

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Islam does this. You just charge a fee.

That's still charging interest, they just use a few legal fudges to get around Islam's prohibition on charging interest.

And how does that not encourage irresponsible lending and transfer wealth to the issuers of credit (per your original point).

Edited by Goat

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That's still charging interest, they just use a few legal fudges to get around Islam's prohibition on charging interest.

I am not sure regarding Islam, it was just something I read. Although the following links explain it a bit better than I can:

http://en.wikipedia.org/wiki/Usury#Avoidance_mechanisms_and_interest-free_lending

This link also provides other alternatives to avoid interest.

http://www.islamic-awareness.org/History/usury.html

http://www.islamic-finance.com/item5_f.htm

The truth is that when banks create money...their loans are not backed by any real wealth on their behalf. Nor do they lend out depositors' money. When you give your house or business as guarantee for their money, this money is not backed by gold, silver or tangible wealth. It is an empty promise except for the fact that the government, with the central bank as lender of the last resort, is ready to bail out the banks should a run on their money occur.

The argument being that lending based upon real wealth does not encourage irresponsible lending because there is something of value at stake. Whereas for a British bank, for example, there is no risk as they are not lending real assets.

And how does that not encourage irresponsible lending and transfer wealth to the issuers of credit (per your original point).

The transfer of wealth is not the problem, it is to whom the wealth is transferred. If the government charges interest then wealth is transferred to the government who can re-distribute it via lower taxes or government spending. When we have a private banking system wealth is transferred to a minority where it is not distributed at all.

Regarding responsible lending. If the government lent money, then it would be politicians (and by extension the voting public) who would decide what the lending criteria would be and what would be deemed responsible and irresponsible.

If you are going to allow lending with interest either allow everyone to do it, or only the government.

I will look into the interest side a bit more and post again if I can find a specific example.

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Well at least she's going to try and grow the economy...

What exactly is she going to be doing at JP Morgan?

Collecting £400,000/yr :o as a belated 'Thank You' for helping to get Dimon's Mob off the hook.

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