Wednesday, April 23, 2014

Currency = How Dynamic Nations Denominate All The Credit That Citizens Of Growing Populations & Economies Continuously Extend To One Another.

   (Commentary posted by Roger Erickson)

For decades & centuries, people have been repeatedly asking: "Is there any limit to how much currency a nation can create?"

The answer seems intuitively obvious. Why doesn't everyone know it? Maybe some don't WANT this answer to be widely accepted? Or are entire populations really this timid and lazy about considering such a simple yet fundamental topic?

Whatever teamwork can produce, then the cooperative credits which team members extend to one another already exist. 

The only question is how accurately to denominate and track those distributed credits, so that all team members can use their credits, when and as needed - to rapidly explore even more team options.

The goal is to expand future team options, NOT to hoard current fiat (aka, the distributed inter-citizen credits that drive & sum to aggregate growth).

Amazingly, those bastions of the modern G7, the policy bureaucracies of the USA, Canada, Europe & Australia, all seem to be ignoring that self-evident answer. Hence, they have to be constantly reminded - even today - by people like Bill Mitchell, Warren Mosler & Randy Wray.

'You will note that:  
[Nations] do not spend by “printing money”. They spend by creating deposits in the private banking system. Clearly, some currency is in circulation which is ‘printed’ but that is a separate process from the daily spending and taxing flows; 
There has been no mention of where the government gets the ‘credits’ and ‘debits’ from! Central banks create bank reserves (money) out of thin air; and 
Any coincident issuing of government debt (bonds) has nothing to do with ‘financing’ the government spending – a point that is explained further on in this chapter.'


Anonymous said...

Re: Maybe some don't WANT this answer to be widely accepted?

That's always been my conclusion. And it seems obvious enough, after all. The idea that Geithner, Summers, Rubin, Dimon, Bernanke, Greenberg...keep going all the way back to 1913, just don't get it seems very implausible. "Not getting it"--maintaining the usual household metaphor--means you get to concentrate wealth via economic esoterization and obfuscation-pontification, demagoguery, privatization, selective taxation, bribery, extorsion, blackmail, warfare- funding of both sides, globalized "free" markets and free trade agreements, periodic chaos, and the like. The computer just gives you all the more leverage for this--it makes full control and fraud possible. It's all very Hegelian. The Swiss study showed that the global corporate power and wealth is extraordinarily concentrated, which in any case makes sense when you consider the scale of capital investment need to construct a modern industrial-technological society. How could it exist without energy, minerals, dams, etc.? Without nuances, Carlin, Russo, et. al. got it right, as did Quigley, Sutton, and the like. They all converge, essentially. "We are owned." The end game is as the Brzezinski quotes recently poseted have it (be they apocryphal or authentic, it's the accuracy of the content that counts).

Anonymous said...

Oops, that should be "extortion."

Anonymous said...

Rothschild and Rockefeller families team up for some extra wealth creation

By Alistair Osborne, Business Editor

The Rothschild and Rockefeller families have teamed up to buy assets from banks and other distressed sellers in a union between two of the best-known names in financial history.
RIT Capital Partners, which is chaired by Lord Rothschild, has taken a 37pc stake in Rockefeller Financial Services, the family’s wealth advisory and asset management wing. It has snapped up the holding from French bank Société Générale for less than £100m.

The transatlantic alliance cements a five-decade acquaintance between the now ennobled Jacob Rothschild, 76, and David Rockefeller, 96, the grandson of the ruthlessly acquisitive American oilman and philanthropist John D Rockefeller.

The two patricians now plan to capitalise on their family names to buy other asset managers or their portfolios, using their networks of top-notch contacts to ensure they get a seat at the table for any deal.

“We’ve known each other for a long time, they have a good business,” said Lord Rothschild yesterday. “We haven’t got a presence in the US and this brings together two formidable names in finance.”

He said the two firms planned to capitalise on current market conditions where banks, like SocGen in this instance, are selling non-core assets to rebuild capital ratios. “At a time when big banks are destabilised, there may well be opportunities,” he said. “We could buy an asset management company or grow one. Rockefeller already has $34bn (£21.9bn) assets under administration.”

He said David Rockefeller was still “very involved” in the business, though it is run day to day by chief executive Reuben Jeffery.

The Rockefeller group goes back to 1882, set up to invest the family money made by John D Rockefeller’s Standard Oil, the forerunner for today’s Exxon Corporation, which he built with a Darwinian aggression. “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in,” he once said.

The Rothschild banking dynasty has its roots in the 18th century when Mayer Amschel Rothschild set up a business in Frankfurt.

Lord Rothschild fell out three decades ago with his cousin Sir Evelyn de Rothschild, who then ran the UK branch of the family bank NM Rothschild. That sprang to fame in 1815 when it bought government bonds in anticipation of Napoleon’s defeat at Waterloo.

Lord Rothschild’s relations with the French side of the family have been better though and he likened the Rockefeller deal to RIT’s tie-up earlier this year with the Edmond de Rothschild Group, which has €150bn (£120bn) under management.

“We think that having that span of interests in Europe and America – as well as China – will give us a better chance of finding exceptional investment opportunities,” he said.

RIT, which has net assets £1.9bn, has had a tricky few months with the shares down about 14pc in the past year. They fell 6 today to £11.25.

Lord Rothschild said: “Everyone has been marked down. We didn’t have a brilliant year on the quoted side but we did do very well on the private side,” realising investments in North Sea operator Agora Oil and Gas and credit manager Harbourmaster.

Anonymous said...

See for example:

Tom Hickey said...

"For more than a century ideological extremists at either end of the political spectrum have seized upon well-publicized incidents such as my encounter with Castro to attack the Rockefeller family for the inordinate influence they claim we wield over American political and economic institutions. Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that's the charge, I stand guilty, and I am proud of it."

- David Rockefeller, 2002, from his book Memoirs, p. 405

image of scanned page here.

It corroborates Quigley:

"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank... sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
Carroll Quigley (1910-1977) | Professor of History at Georgetown University, member of the Council on Foreign Relations (CFR), mentor to Bill Clinton, in Carroll Quigley, Tragedy and Hope: : A History of the World in Our Time. New York: The Macmillan Company, 1966., ch. 20

Conspiracy theorists have run away with this, tending to discredit it, but Rockefeller himself essentially admits that the "masters of the universe" believe that they know know best what's good for the world and they alone have the intelligence, power, and wealth to bring it about — through neoliberalism and neoconservatism. The world is "the rich man's burden."