Friday, June 14, 2013

Matias Vernengo — More on David Graeber’s Debt


David Fields in the comments: "An interesting discussion on Graeber, including Graeber himself"

Naked Keynesianism

More on David Graeber’s Debt
Matias Vernengo | Associate Professor of Economics, University of Utah
(h/t David Fields in the comments)

10 comments:

Unknown said...

I'll simply point out again that money can be issued as Equity, instead of as Liabilities.

But that means the money would become a means of "sharing" wealth rather than looting it.

Can't have that, can we?

Matt Franko said...

F.,

What is "money"?

rsp,

Unknown said...

I use the word "money" colloquially as synonymous with private purchasing power.

And you can save your balance sheet sophistry for someone it might fool. If borrowing short to lend long was truly honest then the banks would not need government deposit insurance and a legal tender of last resort, now would they?

And since it's come to light that central banks don't need to be solvent then it is now obvious that central banks are simply counterfeiters for the so-called "creditworthy." The game is up.

Matt Franko said...

F,

It's not sophistry, perhaps you are having trouble understanding how it works and so are just claiming "counterfeiting!"

Let's look at that word:

"To counterfeit means to imitate something. Counterfeit products are fake replicas of the real product. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product."

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

How does this apply in your scenario?

What is the "real product" and what is the "fake product"?

Banks do not "borrow short to lend long", loans create the deposits... read Dan's recent piece over at NEP... they adjust reserve ratios AFTER the loans are made to move INTO compliance...

Banks lend against capital according to regulatory ratios established and monitored by the govt that commissions the banks to act as their fiscal agents/partners...

To me, its like you are an ancient Israelite raging against the dreaded "tax collectors" all the time with all of this...

rsp,

Unknown said...

How does this apply in your scenario? Matt Franko

As you yourself admit, "loan create deposits" = loans create new purchasing power. But new purchasing power dilutes existing purchasing power, at least temporarily, and in the case of some things such as real estate the dilution is likely to be permanent. That's theft, pal, in either case. And since bank credit mimics genuine fiat, that's theft by counterfeiting.

To me, its like you are an ancient Israelite raging against the dreaded "tax collectors" all the time with all of this...
Matt Franko

And what are you? Have you actually read the entire Old Testament? I suggest you get started if for no other reason than to properly understand the New Testament.

Moreover, the early Christians "shared" their possessions. I point out that money can be issued as Equity ("shares") without usury and you leap to defend the present corrupt system - usury for stolen purchasing power, especially from the poor since they are deemed less "creditworthy."

Matias Vernengo said...

Just want to point out that David Fields had linked to Geoff Ingham's review of Graeber's book in another post worth reading http://nakedkeynesianism.blogspot.com.ar/2013/06/o-sacred-hunger-of-pernicious-gold-what.html
That actually prompted my post

Tom Hickey said...

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Unknown said...

F. Beard said...
"I use the word "money" colloquially as synonymous with private purchasing power."

Of the various colloquial & scholarly definitions of money, this is not one of them.

If I understand it correctly, and I may not, your definition seems to include any object used to facilitate the exchange of goods & services.

Is this an accurate assumption?

If so, it seems to imply that all transactions are monetary in nature.

If a piece of metal provides the purchasing power to attain a shoe then by your definition a metal piece is money.
But then is not the shoe also money?
Viewed from the opposite party, it is a shoe that has provided the purchasing power in order to attain a piece metal. By your logic shoes are money. Even more this seems to imply that money exchanges for money, which in turn implies that everything is money.
Is everything money?

How does money differ from a commodity.

Your definition is so broad as to be utterly useless.

That being said, you can use whatever definition you like, just don't expect other people to understand your idiosyncratic usage.

Unknown said...

Money is a symbol; it might be a symbol of debt OR it might be a symbol of ownership, including part-ownership.

Look at a balance sheet. Both Equity and Liabilities are on the same side. The why can money ONLY be a liability? Hmmm? Because stealing, if legal, is more profitable than "sharing?"

And with the banking cartel, the liabilities are mostly virtual, not real, because the population has no other real option for risk-free deposit storage and transactions.

Unknown said...

But bank assets are real - at least those backed by collateral - as anyone who has ever lost their home to the banking cartel can attest.

So virtual liabilities and real assets = a license to steal for the banks?