tag:blogger.com,1999:blog-2761684730989137546.post6622765106047912969..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: Ellen Brown: Sovereign Debt Jubilee, Japanese-Stylemike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger39125tag:blogger.com,1999:blog-2761684730989137546.post-39442958701396742742017-06-29T11:00:19.405-04:002017-06-29T11:00:19.405-04:00And retirees, whose retirement funds cannot be hel...<i>And retirees, whose retirement funds cannot be held safely in commercial bank accounts if they exceed the FDIC-guaranteed $250,000. </i> MRW<br /><br />We can and should have negative to 0% yielding sovereign debt for safe storage needs.<br /><br />And we should have generous, universal pensions so that no one need suffer if they fail to invest or their investments don't pan out.<br /><br />But welfare proportional to sovereign debt account balance? No. Instead, if someone wants a deluxe retirement income then let them take investment risks to obtain it. And if their investments fail to provide for a deluxe retirement they would still have a generous, universal pension to fall back on.Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-17115964380089843272017-06-28T16:48:15.179-04:002017-06-28T16:48:15.179-04:00To accommodate the usury cartel and Wall Street? A...<i><b>To accommodate the usury cartel and Wall Street?</b></i> And retirees, whose retirement funds cannot be held safely in commercial bank accounts if they exceed the FDIC-guaranteed $250,000. Where do you think pension funds are?MRWhttps://www.blogger.com/profile/13878920695841363553noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-50857942259315198832017-06-28T11:36:26.527-04:002017-06-28T11:36:26.527-04:00B, imo they need these reforms to go with it soun...B, imo they need these reforms to go with it sounds like Trump can do it himself:<br /><br />https://www.bloomberg.com/news/articles/2017-06-23/traders-wager-on-liquidity-wave-from-easing-of-bank-regulationsMatt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-78591112694113511832017-06-28T11:29:33.352-04:002017-06-28T11:29:33.352-04:00I'm fascinated by Neil Wilson's claim that...I'm fascinated by Neil Wilson's claim that bonds are more liquid than cash. Look forward to an explanation. Strikes me that cash is more liquid for two reasons:<br /><br />First, a holding of cash can easily be split up into any number of smaller holdings of any size you like. E.g. if you have $1,000 in the bank, you can spend $1, $67 or any figure you like. In contrast, if you have $1,000 of Treasuries, is Neil trying to claim you can go out to the shops and buy $67 of goods with a $67 chunk of that $1,000 holding?<br /><br />Second, in the case of a mass attempt to spend cash / bonds, dollars will never lose value in terms of dollars, whereas bonds CAN lose value in terms of dollars. E.g. in the event of a mass attempt to cash in Treasuries, Treasuries would lose value (apart from very short term Treasuries). That is a DISINCENTIVE to join in a mass sale of Treasuries. <br /><br />And finally I am not claiming there is a HUGE difference in liquidity as between cash and bonds. That is why I said in my first above comment that it is "more difficult" to spend bonds than cash. I did not say cash was "vastly more" liquid than bonds or anything like that.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-65048715705338162452017-06-28T11:13:15.373-04:002017-06-28T11:13:15.373-04:00with a new law to lock in 0.375% WWII rate cap for...<i>with a new law to lock in 0.375% WWII rate cap for T-bills (+ IOR) and bar further sale of T-Notes & T-bills. </i> Beowulf<br /><br />Why pay ANY welfare proportional to sovereign debt holding since, except for physical fiat, aka "cash", it is risk free?<br /><br />To accommodate the usury cartel and Wall Street? Andrew Andersonhttps://www.blogger.com/profile/14296407661618321637noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-11803125362514868592017-06-28T09:27:22.633-04:002017-06-28T09:27:22.633-04:00Oh brother, doesn't she know that the interest...Oh brother, doesn't she know that the interest on reserved the Fed pays out is funded by deducting it from Tsy rebate? If the Fed buys up all $20T public debt, interest collected would go towards paying IOR on (the suddenly $20T larger) bank reserves. Simpler way is, as I suggested in universal healthcare piece discussed here yesterday, to cut net interest costs by > 90% with a new law to lock in 0.375% WWII rate cap for T-bills (+ IOR) and bar further sale of T-Notes & T-bills.beowulfhttps://www.blogger.com/profile/14987548132065830204noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-66332432552740349322017-06-28T09:15:52.176-04:002017-06-28T09:15:52.176-04:00Right and all these people running banks have Warr...Right and all these people running banks have Warren's knowledge.... c'mon...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-83918320351828912182017-06-28T09:13:24.995-04:002017-06-28T09:13:24.995-04:00Warren did say as bank owner then that raising cap...Warren did say as bank owner then that raising capital in not an issue although I don't recall him explaining the procedure. He said banks don't like a higher capital ratio (leverage ratio) because it reduces leverage and bank profit comes from leverage. IIRC he also said that banks don't run at exactly the leverage ratio but leave a bit of space to work with even though it costs them a bit, and they add capital as needed. He shrugged it off as an issue.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-12151931838591244562017-06-28T09:11:39.446-04:002017-06-28T09:11:39.446-04:00Carney stayed out of it in Canada too...Carney stayed out of it in Canada too...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-39745471848279149692017-06-28T09:00:52.009-04:002017-06-28T09:00:52.009-04:00 Tom she is a trained lawyer Tom she is a trained lawyer Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-19583233676898887392017-06-28T08:52:34.050-04:002017-06-28T08:52:34.050-04:00Neil for banks to raise capital like that is much ...Neil for banks to raise capital like that is much easier said than doneMatt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-63995098017290938912017-06-28T08:52:11.203-04:002017-06-28T08:52:11.203-04:00Interest is revenue for the bank. Saying that inte...Interest is revenue for the bank. Saying that interests is a problem is like saying profit is a problem. <br /><br />Revenue minus expense is profit. Those profits are either invested, retained, or distributed to ownership. <br /><br />The amount spent funds circular flow in the economy. The amount saved doesn't.<br /><br />According to MMT, government must make up for nongovernment saving to maintain full employment.<br /><br />Most people seem to find this baffling even though only all that is involved in understanding the conceptual model is a bit of mental arithmetic and some very simple algebra to understand the conceptual model.<br /><br />The problem is not so much the ability to understand as the fixed ideas and cognitive bias that get in the way of correct understanding.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-80843510482485510422017-06-28T08:46:52.796-04:002017-06-28T08:46:52.796-04:00Well you have competent people in the UK right now...Well you have competent people in the UK right now we don'tMatt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-43058711081466142882017-06-28T08:15:45.860-04:002017-06-28T08:15:45.860-04:00" it would cause GFC 2 as banks don't hav..." it would cause GFC 2 as banks don't have enough regulatory capital to accommodate the new 20T of Cash Assets"<br /><br />They just buy whatever capital is required at the current price. The authorities then note the price and level of loans and they relax whatever ratio is required to get the level of loans they think is required. <br /><br />Loans are a pipeline taking time to complete. You don't need capital until drawdown. That's plenty of time to get the required capital and lobby the regulators. <br /><br />We've already seen Carney do that here in the UK. From last July:<br /><br />"The counter cyclical capital buffer rate for U.K. banks was cut with immediate effect to 0 percent from 0.5 percent of financials' U.K. exposure, the BoE said on Tuesday in its biannual Financial Stability Report — the first to be published since the Brexit vote. This will reduce regulatory capital buffers by £5.7 billion ($7.5 billion), raising banks' capacity to lend to households and businesses by up to £150 billion"<br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-9587775144076926172017-06-28T08:09:22.574-04:002017-06-28T08:09:22.574-04:00"Possibly base money holders should be induce..."Possibly base money holders should be induced by lock up their money for extended periods in the form of low interest yielding government bonds because that makes it more difficult for "holders" to suddenly spend their stock of money all at once"<br /><br />It doesn't if it is marketable in a liquid market. It's a complete myth. <br /><br />neo-liberals think bond markets are illiquid and currency markets are fully liquid. It's the opposite way around. <br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-46640973414765902632017-06-28T07:40:59.452-04:002017-06-28T07:40:59.452-04:00And btw Japan grew 0.3% in latest qtr reported.......And btw Japan grew 0.3% in latest qtr reported.... i.e. shitty... they have to stop doing this and so does US... if higher growth rate is desired...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-14425424691997879312017-06-28T07:25:55.140-04:002017-06-28T07:25:55.140-04:00" It's just swapping one type of financia..." It's just swapping one type of financial asset (treasuries) for another type of financial asset (money in your checking account). It's moving numbers down in your savings account and up in your checking account. "<br /><br />Another oversimplification by the MMT elites.... it would cause GFC 2 as banks don't have enough regulatory capital to accommodate the new 20T of Cash Assets .. they would have to mark down the prices of all the other assets they have... same with the coin....<br /><br />We have to watch this in light of Mnuchin saying he has "Treasury Superpowers" to deal with the debt ceiling.... these idiots may crash the whole thing again...Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-91042225765615811012017-06-28T06:45:22.821-04:002017-06-28T06:45:22.821-04:00Milton Friedman and Warren Mosler argued for a zer...Milton Friedman and Warren Mosler argued for a zero debt regime: i.e. they claimed the only state liability should be zero interest yielding base money. I think that's right, or very nearly so.<br /><br />Possibly base money holders should be induced by lock up their money for extended periods in the form of low interest yielding government bonds because that makes it more difficult for "holders" to suddenly spend their stock of money all at once, given an outbreak of irrational exuberance, and cause hyperinflation. Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-15903219376411263762017-06-28T01:07:53.278-04:002017-06-28T01:07:53.278-04:00To use an analogy, if you go and watch a motor rac...To use an analogy, if you go and watch a motor race around a track and the cars go from 100mph to 200mph would you worry that they will run out of track?<br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-53084099326724195432017-06-28T01:06:05.874-04:002017-06-28T01:06:05.874-04:00Interest is denominated in $/month and loans are i...Interest is denominated in $/month and loans are in $.<br /><br />Mixing the two up is the same as mistaking miles per hour for miles. <br /><br />NeilWhttps://www.blogger.com/profile/11565959939525324309noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-84024159480005904422017-06-27T23:54:11.833-04:002017-06-27T23:54:11.833-04:00I saw her at a Steve Keen lecture asking him to ex...I saw her at a Steve Keen lecture asking him to explain further how the interest loans gets paid when the banks don't issue the interest. (If they did, entry wouldn't get paid, they worked be handing out free money). But to the ordinary person it does look like there is a problem with paying the interest unless is manufactured somewhere. Steve keen was explaining how money paid into the bank is paid out again and so the same dollars can go back and forth in and out of the banking system several times. Steve Keen called it the velocity of money and in this way the interest gets paid. Bank staff also spend their wages back out into the community. Steve Keen went over it again with her but she still insists that as banks don't issue the interest there's a problem. Despite Steve Keen's impressive computer modelling showing this some academics say he has got it wrong. Kaiveyhttps://www.blogger.com/profile/04195639305785321786noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-74798542027150522862017-06-27T19:30:17.973-04:002017-06-27T19:30:17.973-04:00I think all "operational reality" amount...<i>I think all "operational reality" amounts to spreachsheet shuffling. </i><br /><br />That is partially true but not the whole of it. The rest is institutional arrangements for doing so.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-55127871345199220702017-06-27T19:26:55.208-04:002017-06-27T19:26:55.208-04:00Sorry for the typo: spreadsheet shuffling.Sorry for the typo: spreadsheet shuffling.Nonehttps://www.blogger.com/profile/07639679604202236276noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-69261585855538649782017-06-27T19:25:51.625-04:002017-06-27T19:25:51.625-04:00@ Tom
I think all "operational reality"...@ Tom <br />I think all "operational reality" amounts to spreachsheet shuffling. <br /><br />To all, thank you for your comments.Nonehttps://www.blogger.com/profile/07639679604202236276noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-21285953479160709962017-06-27T19:20:30.614-04:002017-06-27T19:20:30.614-04:00As a tax credit that is a government liability, cu...As a tax credit that is a government liability, currency is also a debt of the government that is "redeemed" by its use in paying tax obligations. Currency in circulation, bank reserves (rb and vault cash), and Tsys held by non-government are outstanding tax credits that have not yet been redeemed.<br />Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.com