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J Vine Discusses Corbynomics With The Advisor


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Inflation also erodes debt if wages rise to match it.

PQE is not necessarily inflationary nor is printing money. Depends how much, what its used for, and if there is spare capacity in the economy. We 'print' shed loads of debt out of thin air - makes sense that we create some debt free money to help pay it back !

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Inflation also erodes debt if wages rise to match it.

PQE is not necessarily inflationary nor is printing money. Depends how much, what its used for, and if there is spare capacity in the economy. We 'print' shed loads of debt out of thin air - makes sense that we create some debt free money to help pay it back !

When did you last get a pay rise?

People who take on debts should pay them back in full. They had the advantage of the full loan amount at the current level of inflation and should honour their commitment to pay the same amount back. Or they should go bankrupt and let someone else have a go.

I'd argue that the banking system's money creation powers are also dangerous and should be regulated and scaled back.

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Well why have people at all, I mean if he creates all the demand, all the money and then spends it all. Why bother with having any people?

Ahh the great utopia we always hear about, but never see....

Not a great fan of trickle-down economics then ?
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At least for the time being there's some broader debate about solutions a bit different to TPTB's limited and self serving debate - also Corbyn doesn't seem to go along with the PC language/garbage/soundbite/all use the same old words form of "communication" at least so far not so much, and that in itself is a refreshing change (in that respect similar to Farage) .

Ultimately Corbyn won't make much difference but let the UK have the debate and then the chance to vote on properly debated issues - rather than the compressed, manipulated and censored stuff that they currently try to call debate in the UK.

Edited by billybong
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At least for the time being there's some broader debate about solutions a bit different to TPTB's limited and self serving debate - also Corbyn doesn't seem to go along with the PC language/garbage/soundbite/all use the same old words form of "communication" at least so far not so much, and that in itself is a refreshing change (in that respect similar to Farage) .

Ultimately Corbyn won't make much difference but let the UK have the debate and then the chance to vote on properly debated issues - rather than the compressed, manipulated and censored stuff that they currently try to call debate in the UK.

You are probably right. When Corbyn was elected I didn't know whether to laugh or cry. Since then I've been pleasantly shocked that people have been almost hoodwinked into debating actual economics

My pessimism comes from the fact that I thought this would happen in 2008 - instead the agenda was forced down the UKIP/nationalist route - I mean even on here FFS.

The very fact that its meant to be surprising that hedgefunders or the FT suggest his ideas aren't that barmy, aside from the politics of it, actually just indicates that people generally have no idea what a totally insane situation we're in already.

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People who take on debts should pay them back in full. They had the advantage of the full loan amount at the current level of inflation and should honour their commitment to pay the same amount back.

Ok- so I go to a bank for a loan and they say yes- and type £1000 into my bank account. Where did this money come from? Nowhere- it was created from nothing by the act of typing the numbers into my account. No money was moved inside the bank from somewhere else into my account- the money was simply conjured into existence from nothing.

Not a problem- I will simply repay this loan with a printed note that says £1000 (plus whatever interest owed) sign it and hand this to the bank. Now the loan is repaid.

But no- this will not work. It seems that while the bank can conjure money (in the form of bank credit) from nowhere, I can't do the same. If I want to pay back that loan I will have to go out to work and create real value in the world in order to do so.

So the bank is in effect getting something for nothing here- they are given the power to create money at will while I must offer my labour in return for money. So the bank is in effect buying my labour with money they just make up from nothing.

And note that these banks are private business's, not state institutions. So we have given these private business's the right to create money from nothing and then lend that money out-at interest- and in return those private business's demand not repayment in kind but repayment in labour in the form of earned income.

It's not at all clear to me that there is any honour in this situation whatsoever. There is a contractual arrangement to be sure- one the banks can enforce in law- but the idea that we might owe some kind of moral obligation to repay these parasites is in my view mistaken.

The only possible rationale that might have been offered in justification for the obscene profits of the private lenders was their claim to be the best allocators of societies capital- but we are on a website called House Price Crash- a website that only exists due to the monumental folly of the private banks whose misallocation of capital into the housing market resulted in the meltdown of the global financial system and the creation of an entire generation who have been priced out of the housing market apparently for life.

Edited by wonderpup
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Ok- so I go to a bank for a loan and they say yes- and type £1000 into my bank account. Where did this money come from? Nowhere- it was created from nothing by the act of typing the numbers into my account. No money was moved inside the bank from somewhere else into my account- the money was simply conjured into existence from nothing.

Not a problem- I will simply repay this loan with a printed note that says £1000 (plus whatever interest owed) sign it and hand this to the bank. Now the loan is repaid.

But no- this will not work. It seems that while the bank can conjure money (in the form of bank credit) from nowhere, I can't do the same. If I want to pay back that loan I will have to go out to work and create real value in the world in order to do so.

So the bank is in effect getting something for nothing here- they are given the power to create money at will while I must offer my labour in return for money. So the bank is in effect buying my labour with money they just make up from nothing.

And note that these banks are private business's, not state institutions. So we have given these private business's the right to create money from nothing and then lend that money out-at interest- and in return those private business's demand not repayment in kind but repayment in labour in the form of earned income.

It's not at all clear to me that there is any honour in this situation whatsoever. There is a contractual arrangement to be sure- one the banks can enforce in law- but the idea that we might owe some kind of moral obligation to repay these parasites is in my view mistaken.

The only possible rationale that might have been offered in justification for the obscene profits of the private lenders was their claim to be the best allocators of societies capital- but we are on a website called House Price Crash- a website that only exists due to the monumental folly of the private banks whose misallocation of capital into the housing market resulted in the meltdown of the global financial system and the creation of an entire generation who have been priced out of the housing market apparently for life.

Well quite.

If you had tried to tell me half of that back in 2000 eyes would have rolled and I would have assumed you were a post Berlin Wall, weird, bitter and twisted commie nutjob.

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I agree that the banking system is an immoral mess. But no-one has been proposing to strip the banks of their money-creation powers, or even to limit them. Instead what I heard proposed amounted to more bailouts for the same broken system, despite the failures of the previous intervention - only the mechanism of delivery was different.

That distinction between money you borrow and money you earn is at the very heart of this.

A borrower can quickly outbid a worker for the necessities of life. It takes a working person decades of work to get to the same position as the borrower - by which time they'll find that everything has already been bought by whoever was willing to take on the biggest debt soonest.

If we decide that since the banks act in bad faith, that we are entitled to embark on debt forgiveness (either explicitly or through wage inflation), then the imprudent borrower has won twice at the expense of the working person. Not only have they monopolised housing and other assets with the money the banks created for them, they are freed from the obligation to pay anything back, and have effectively become the new upper class just by filling in a form at the right time in history.

The inherent unsustainability of money creation through debt is another topic. Where does the money come from to pay the interest, other than through ever larger loans in the future? How can money track real wealth, when the only way to create money unencumbered by a corresponding debt obligation is through insolvency - not success but failure?

You could muster an argument for 'people's QE' along the lines of positive money and citizens income, and it would be very persuasive given the failure of the current system. But Murphy framed it solely as an inflationary bailout, ensuring the numbers on the screen keep going up even during a recession.

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Well quite.

If you had tried to tell me half of that back in 2000 eyes would have rolled and I would have assumed you were a post Berlin Wall, weird, bitter and twisted commie nutjob.

Of course you can conjure credit up from nowhere...you simply issue an invoice in advance of doing the work and receiving payment.

What you are talking about is credit, not cash. cash YOU can settle with and you cant make it. Banks need cash to settle the credit they "gave" you.

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Ok- so I go to a bank for a loan and they say yes- and type £1000 into my bank account. Where did this money come from? Nowhere- it was created from nothing by the act of typing the numbers into my account. No money was moved inside the bank from somewhere else into my account- the money was simply conjured into existence from nothing.

Seriously, is this actually true? Can someone point me towards a reliable source?

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Seriously, is this actually true? Can someone point me towards a reliable source?

Its not true. the typing is true, but the bit before, the agreement to a loan was missed out. Also missed out was the method to move the balance to either cash or another account...

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Seriously, is this actually true? Can someone point me towards a reliable source?

Its not true. the typing is true, but the bit before, the agreement to a loan was missed out. Also missed out was the method to move the balance to either cash or another account...

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Seriously, is this actually true? Can someone point me towards a reliable source?

Its not true. the typing is true, but the bit before, the agreement to a loan was missed out. Also missed out was the method to move the balance to either cash or another account...

See, I can produce a double post out of thin air too.

Edited by Bloo Loo
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Its not true. the typing is true, but the bit before, the agreement to a loan was missed out. Also missed out was the method to move the balance to either cash or another account...

The agreement to the loan is the contract to repay that gives rise to the credit creation process- but the credit itself is created from nothing.

This is how the Bank of England describes the process;

In the modern economy, most money takes the form of bank deposits. But how those bank deposits are created is often misunderstood: the principal way is through commercial banks making loans. Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

So according to the BoE banks create new money when they make loans. In theory their ability to do so is limited by reserve requirements- In the real world it's the bank loan tail that wags the central bank reserve dog;

reserves are, in normal times, supplied ‘on demand’ by the Bank of England to commercial banks in exchange for other assets on their balance sheets. In no way does the aggregate quantity of reserves directly constrain the amount of bank lending or deposit creation.

So in practice the limits on how much credit the banks can create are more like guidelines than actual hard and fast rules- their primary constraint being just how much debt they can foist on the population.

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I am amazed at how many people here have drunk deep of the Corbyn Kool-Aid.

Socialism is socialism is socialism. It has never worked, it doesn't work, and it will never work.

Anyone hoping for a solution to their daddy issues in Corbyn should at least be aware that all politicians are Corbyn-lite. Every problem which the government has created (which is to say, every problem), will be exacerbated by Corbyn.

In the end, I suppose it doesn't matter, because we will reach the end of this road. Corbyn merely represents the wedging of the accelerator to the floor.

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I am amazed at how many people here have drunk deep of the Corbyn Kool-Aid.

Socialism is socialism is socialism. It has never worked, it doesn't work, and it will never work.

Anyone hoping for a solution to their daddy issues in Corbyn should at least be aware that all politicians are Corbyn-lite. Every problem which the government has created (which is to say, every problem), will be exacerbated by Corbyn.

In the end, I suppose it doesn't matter, because we will reach the end of this road. Corbyn merely represents the wedging of the accelerator to the floor.

I think you have overlooked the reality that you already live in a Socialist system- the only difference being that it is a system that only works to the benefit of a small number of people at the top rather than the majority.

Back in 2008 when a lot of very wealthy people were about to lose a lot of money the system bailed them out using taxpayers money- this is Socialism- and to this day the wealthy are still the primary beneficiaries of policies like QE and ZIRP because both preserve the value of financial and other assets that might otherwise return to the low values an unrigged market would ascribe to them.

So your choice is not between Socialism or some kind of free market- it is a choice between a form of socialism that works on behalf of the 1% or a form that takes into account the needs of the remaining 99%

The moment the Central Banks got into the game of rigging the market the transition to Socialism Globally was complete- the only issue now is who benefits from this victory of Socialism worldwide- is it to be the 1% or so of those who own most of the worlds assets or is it to be the 99% who don't own such assets but just work for a living?

I'm not convinced that there ever was a true free market society- but even if there was all that ended in 2008 when the Central Banks took the decision to take over the game and rig it to preserve the wealth and power of the very people who had brought that system to it's knees.

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When did you last get a pay rise?

People who take on debts should pay them back in full. They had the advantage of the full loan amount at the current level of inflation and should honour their commitment to pay the same amount back. Or they should go bankrupt and let someone else have a go.

I'd argue that the banking system's money creation powers are also dangerous and should be regulated and scaled back.

Not so long ago the banks 'lost' more money than ever made in the history of banking, and we know what's happened since. Until people begin appreciating that alternatives not giving more money to rich people do not necessarily equal disaster/zimbabwe/socialism nobody needs to feel particularly honourable about it.

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I agree that the banking system is an immoral mess. But no-one has been proposing to strip the banks of their money-creation powers, or even to limit them. Instead what I heard proposed amounted to more bailouts for the same broken system, despite the failures of the previous intervention - only the mechanism of delivery was different.

Banks can do what the Hell tey like. But WHEN it all hits the fan they MUST never again be bailed out or in.

Unfortunately they will be

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I'm not convinced that there ever was a true free market society- but even if there was all that ended in 2008 when the Central Banks took the decision to take over the game and rig it to preserve the wealth and power of the very people who had brought that system to it's knees.

1920-21 USA check it out

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I think you have overlooked the reality that you already live in a Socialist system- the only difference being that it is a system that only works to the benefit of a small number of people at the top rather than the majority.

Back in 2008 when a lot of very wealthy people were about to lose a lot of money the system bailed them out using taxpayers money- this is Socialism- and to this day the wealthy are still the primary beneficiaries of policies like QE and ZIRP because both preserve the value of financial and other assets that might otherwise return to the low values an unrigged market would ascribe to them.

So your choice is not between Socialism or some kind of free market- it is a choice between a form of socialism that works on behalf of the 1% or a form that takes into account the needs of the remaining 99%

The moment the Central Banks got into the game of rigging the market the transition to Socialism Globally was complete- the only issue now is who benefits from this victory of Socialism worldwide- is it to be the 1% or so of those who own most of the worlds assets or is it to be the 99% who don't own such assets but just work for a living?

I'm not convinced that there ever was a true free market society- but even if there was all that ended in 2008 when the Central Banks took the decision to take over the game and rig it to preserve the wealth and power of the very people who had brought that system to it's knees.

Don't get me wrong - I understand and even enjoy the well rehearsed logic, but I just can't go along with the 'Socialism'meme (is it just hpc thing ?).

I mean if you take it literally its all a bit of ridiculous cognitive dissonance at best. "The problem is with... Socialism, don't you worry your pretty little head about Capitalism, just feck off and whip yourself into a frenzy about immigration instead".

Not simply to do with greed ? No. Not simply to do with self-preservation ? No. Not simply to do with gullibility about 'free' markets ? No. Not simply to do with how we 'regulate' the system ? No. No. especially NO ! Thats socialism ! Thats the problem !!

A democratic capitalist state is meant to have the inbuilt ingenuity to interrogate, debate, come up with ingenious solutions to make things better. And better again. What the hell has happened since 2008 ?

Instead, at least on here and out of fear, the (mental) Capitalista State steps in, and in its command economy, assigns blame resources onto 'socialism' and 'immigrants'. I mean on one level its genius, on another its just helps corrode capitalism/demcocracy's peerless ability to renew itself resulting in a doomed prolonging of criminal incompetence.

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