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The Spaniard

Strip Private Banks Of Their Power To Create Money

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Martin Wolf of the prestigious Financial Times has written an article which supports full reserve banking and monetary reform as advocated by Positive Money.

http://www.positivemoney.org/2014/04/strip-private-banks-power-create-money-financial-times-martin-wolf-endorses-positive-moneys-proposals-reform/#comments

(Sorry not to post a direct link to the FT article, but you can sign up on the FT website for a few free articles.)

Good to see serious MSM support for full reserve banking and monetary reform.

Well done, Martin Wolf.

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I never thought this kind of thing would ever show up in the MSM. They must be getting desperate.

Andy Haldane, the soon to be BoE chief economist has some interesting things to say about the current state of Economics;

In the light of the financial crisis, those [macro and micro model] foundations no longer look so secure.Unbridled competition, in the financial sector and elsewhere, was shown not to have served wider society well. Greed, taken to excess, was found to have been bad. The Invisible Hand could, if pushed too far, prove malign and malevolent, contributing to the biggest loss of global incomes and output since the 1930s. The pursuit of self-interest, by individual firms and by individuals within these firms, has left society poorer.

...

The crisis has also laid bare the latent inadequacies of economic models with unique stationary equilibria and rational expectations. These models have failed to make sense of the sorts of extreme macro-economic events, such as crises, recessions and depressions, which matter most to society. The expectations of agents, when push came to shove, proved to be anything but rational, instead driven by the fear of the herd or the unknown.

http://www.zerohedge.com/news/2014-04-24/bank-england-chief-economist-be-warns-its-time-rethink-everything

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The expectations of agents, when push came to shove, proved to be anything but rational, instead driven by the fear of the herd or the unknown.

The opposite of rational is normally irrational but when it comes to the financial sector the true opposite of rational seems to include the words crooked, fraudulent, dishonest etc etc but they're words hardly ever used in that connection.

Edited by billybong

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The opposite of rational is normally irrational but when it comes to the financial sector the true opposite of rational seems to include the words crooked, fraudulent, dishonest etc etc but they're words hardly ever used in that connection.

The bankers were absolutely rational. They realized they could pay themselves a ton of other people's money as a 'reward' for lending vast amounts of money to people who couldn't pay it back, the government would bail them out when that bankrupt the banks, and they would never be punished. What could be more rational than that?

If you don't want people to do that, then ensure the motivational structure doesn't encourage them to do so. But, God forbid, that actually means letting banks go bust, and that can't be allowed to happen.

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Allowing individuals to print their own money through private credit creation (i.e. borrowing) is quite democratic in itself. Perhaps its the whole short termism, private profit socialised loss model that operates in the banking sector needs to be addressed first.

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The politicians need reigning in too. Stop the power of Governments to be able to borrow a penny, otherwise the politicians will just keep putting their grubby hands into the cookie jar whenever they are hungry or feel like bribing the voters.

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