An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
The Central Bank should not buy bonds (sovereign or not) or anything else (sorry goldbugs) from the private sector since that violates equal protection under the law.
The proper way to lower interest rates is: 1) An equal Citizen's Dividend. 2) Negative interest on large and non-individual citizen accounts.
But keep ignoring justice and what's to lose besides your head (eg. France 1793)?
CB and Treasury are significantly increasing non risk Reserve assets at depositories.... the price of risk assets then has to be immediately reduced to maintain regulatory compliance...
It’s not a figurative “zombie attack!” , leave the figurative language out of it here ... there is no need...
The system is performing properly as it is configured ....
Total Bank asset value is a regulated fixed multiple of current retained earnings... if govt adds reserve assets to total bank assets then the value of the other non-reserve assets has be reduced... it’s a simple proportional control system...
Here ... grind your way thru prerequisites and then a 400 level course in this then you won’t need the moron Art degree finger painting figurative language any more....
Matt, I have no idea who you are targeting your rants at, but in case it was me, I taught graduate level control theory. Proportional control is intro level theory that is covered in part of a lecture in an undergraduate course.
Nice to know you know you taught control theory, I only minored in it.
Anyway, you should know, much more than me, that the sham* liabilities of the banking cartel toward the non-bank private sector mean the corresponding negative feedback is a sham too.
And that means, to my somewhat less expert eye, that the system, besides being inherently unjust and discriminatory, is also unstable - a conclusion born out by 300+ years of banking history, including recent banking history.
*due to heavy government privilege such as deposit gaurantees and lender/asset buyer of last resort.
Any financial system based on debt is going to be unstable. This instability can be somewhat tamed by good regulation.
Calling banking a sham is a value judgement. Unless one prefers government planners abolishing the private sector, having private banks can be seen as being the lesser evil versus alternatives. Since there are no plausible alternatives being discussed, I do not spend my time worrying about this topic.
I said the "liabilities of the banking cartel toward the non-bank private sector" are a sham - due to government privilege.
The rest of your comment is a strawman too - as if there's no alternative to government privileges for a usury cartel but to abolish the private sector!
Except we don't and never have had truly private banking due to privileges, implicit and explicit, for private banks such as:
1) needlessly expensive fiat, eg. the Gold Standard, making fiat too expensive for large scale use by the population. 2) inability of citizens to use fiat in account form. 3) Positive (actually non-negative given overhead costs) yields on the inherently risk-free debt of the monetary sovereign. 4) government deposit guarantees. 5) a Central Bank for banks only. 6) loans (discount window) and asset purchases by the Central Bank to/from private banks.
Here's an alternative (and challenge) for you: abolish those privileges in an ethical manner that does not plunge the country into depression.
Brian I know your educational and teaching background... you are probably the most qualified of anyone on planet earth AND possessing the interest in examining these systems..
I’d like to see you using MORE of your training in system control as applied to these systems...
You have the most technical potential of anybody in “MMT” imo...
The Central Bank should not buy bonds (sovereign or not) or anything else (sorry goldbugs) from the private sector since that violates equal protection under the law.
ReplyDeleteThe proper way to lower interest rates is:
1) An equal Citizen's Dividend.
2) Negative interest on large and non-individual citizen accounts.
But keep ignoring justice and what's to lose besides your head (eg. France 1793)?
“This behaviour seems to be”
ReplyDeleteAnthropomorphism much?
CB and Treasury are significantly increasing non risk Reserve assets at depositories.... the price of risk assets then has to be immediately reduced to maintain regulatory compliance...
“Zombie attack.”
ReplyDeleteIt’s not a figurative “zombie attack!” , leave the figurative language out of it here ... there is no need...
The system is performing properly as it is configured ....
Total Bank asset value is a regulated fixed multiple of current retained earnings... if govt adds reserve assets to total bank assets then the value of the other non-reserve assets has be reduced... it’s a simple proportional control system...
https://en.m.wikipedia.org/wiki/Proportional_control
ReplyDeleteHere ... grind your way thru prerequisites and then a 400 level course in this then you won’t need the moron Art degree finger painting figurative language any more....
Matt, I have no idea who you are targeting your rants at, but in case it was me, I taught graduate level control theory. Proportional control is intro level theory that is covered in part of a lecture in an undergraduate course.
ReplyDeleteBrian,
ReplyDeleteNice to know you know you taught control theory, I only minored in it.
Anyway, you should know, much more than me, that the sham* liabilities of the banking cartel toward the non-bank private sector mean the corresponding negative feedback is a sham too.
And that means, to my somewhat less expert eye, that the system, besides being inherently unjust and discriminatory, is also unstable - a conclusion born out by 300+ years of banking history, including recent banking history.
*due to heavy government privilege such as deposit gaurantees and lender/asset buyer of last resort.
Andrew,
ReplyDeleteAny financial system based on debt is going to be unstable. This instability can be somewhat tamed by good regulation.
Calling banking a sham is a value judgement. Unless one prefers government planners abolishing the private sector, having private banks can be seen as being the lesser evil versus alternatives. Since there are no plausible alternatives being discussed, I do not spend my time worrying about this topic.
Brian,
ReplyDeleteI said the "liabilities of the banking cartel toward the non-bank private sector" are a sham - due to government privilege.
The rest of your comment is a strawman too - as if there's no alternative to government privileges for a usury cartel but to abolish the private sector!
Andrew, you are proving Matt’s point about figurative language. However my statement is easily parsed.
ReplyDeleteIf one does not prefer nationalising economic activity -> private banking is a lesser evil versus alternatives.
If one prefers nationalising economic activity -> Is another possibility, but “lesser evil” does not fit the bill.
There is a near certainty that Matt would complain about “lesser evil,” but anyone with a good command of English should be able to parse the meaning.
Except we don't and never have had truly private banking due to privileges, implicit and explicit, for private banks such as:
ReplyDelete1) needlessly expensive fiat, eg. the Gold Standard, making fiat too expensive for large scale use by the population.
2) inability of citizens to use fiat in account form.
3) Positive (actually non-negative given overhead costs) yields on the inherently risk-free debt of the monetary sovereign.
4) government deposit guarantees.
5) a Central Bank for banks only.
6) loans (discount window) and asset purchases by the Central Bank to/from private banks.
Here's an alternative (and challenge) for you: abolish those privileges in an ethical manner that does not plunge the country into depression.
Brian I know your educational and teaching background... you are probably the most qualified of anyone on planet earth AND possessing the interest in examining these systems..
ReplyDeleteI’d like to see you using MORE of your training in system control as applied to these systems...
You have the most technical potential of anybody in “MMT” imo...