tag:blogger.com,1999:blog-2761684730989137546.post6930640184508357443..comments2024-03-29T02:19:19.866-04:00Comments on Mike Norman Economics: Robert Woodford - City of London: The shocking study no mainstream media outlet dared to publishmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2761684730989137546.post-23173263364891272622019-03-10T13:19:44.215-04:002019-03-10T13:19:44.215-04:00Unfortunately the SPERI report does not have any s...Unfortunately the SPERI report does not have any simple clear ideas for solving or at least reducing the problem. The problem would be much reduced by switching to full reserve banking.<br /><br />Banks under the existing system are subsidised, hence the bank industry is larger than it should be. That is, under the existing system, one person or firm can lend to another via a bank and the lender is guaranteed not to lose out because the state (i.e. taxpayers) stand behind the lender via deposit insurance. The latter “lender / borrower” relationship is clearly COMMERCIAL and it is not the job of taxpayers to stand behind commercial transactions.<br /><br />As for when that commercial transaction goes BADLY WRONG, as in the recent crisis, the Fed loaned banks around $750bn for about 18 months at a near zero rate of interest. That’s some subsidy, in effect paid for by the population at large. <br /><br />Under full reserve, lenders would charge a higher rate of interest because they are not protected by deposit insurance, thus interest rates would be higher and the bank industry would be smaller. However that new and higher rate ought to be nearer the genuine free market rate, because no subsidy is involved, hence GDP ought to be higher. <br /><br />The bank industry in the UK is a whapping TEN TIMES the size it was in 1970 relative to GDP. Exactly what we’ve gained as a result of that boated bank industry is a mystery.<br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-5023176939265983862019-03-10T11:43:05.020-04:002019-03-10T11:43:05.020-04:00For Americans, the “City of London” is the UK’s fi...For Americans, the “City of London” is the UK’s financial district. It is equivalent to “Moscow City” in Russia, Wall Street in the USA, Rothschild Boulevard in Israel, <i>Marunouchi</i> in Japan, <i> Bankenviertel</i> in Frankfurt, the Beijing Central Business District in China, the Dubai International Financial Centre in the UAE, and so on. <br /><br />Below is a global list of financial districts…<br /><br />https://en.wikipedia.org/wiki/Financial_district<br /><br />Until mankind gets these under control, MMT cannot help us.Konradhttps://www.blogger.com/profile/01739209449391854796noreply@blogger.com