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07-24-2012 05:37 PM 8 years ago

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InvertedDude

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Buckeye

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07-24-2012 06:09 PM 8 years ago

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Dennis (RIP)

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Circling the drain.............Liberty once lost, is lost forever.

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07-25-2012 08:44 AM 8 years ago

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shawmcky

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Wait for the"Big"one,Italy,all the "help"funds will be gone,what happens then?The drain is getting a whole lot bigger.It is reported that shale gas will be the saviour of the U.S.A.Good fracking luck to you

Team- unbiased opinion.K.I.S.S principle upheld here

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07-25-2012 09:54 AM 8 years ago

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InvertedDude

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07-25-2012 11:12 AM 8 years ago

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shawmcky

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Italy and Spain are the biggest concern for Europe and in no small part,the U.S.A.If the UK had not been able to print our currency we would be in a meltdown even worse than we are already(If that is possible

)The UK is in debt larger than anyone in Europe,our economy is sliding each quarter,this is after massive public spending cuts.The debt and interest is so huge that all the cuts make no dent.The U.S is in much the same position,lets see if cuts dent your debts or just increase the misery of the struggling majority. Who knows what the answer is.Politicians wont,they helped breed this debt monster that has taken down the worlds economic system

Team- unbiased opinion.K.I.S.S principle upheld here

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07-25-2012 11:22 AM 8 years ago

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shawmcky

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Keep your eye on the stock markets at home and abroad,and hope your investments and pensions are going to be worth something when needed.Anyone been looking at losses this week alone?Team- unbiased opinion.K.I.S.S principle upheld here

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07-26-2012 12:25 AM 8 years ago

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Dusty1000

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The UK is in debt larger than anyone in Europe

Net UK public debt is 66% of GDP which is lower than most European countries. Including the cost of the bank bailouts it's 147% of GDP, but that's down from 160% at the height of the financial crisis and is being repaid by the banks it was lent to, gradually. Gross UK debt which includes all private sector debt is in real terms, the 2nd largest in the world, however.

http://www.economicshelp.org/blog/2...ebt-by-country/

But the vast bulk of this is held by the financial sector, and financial sector debt is a good thing because it means the financial sector must own assets equal to the amount of debt. As it's several times the amount of GDP of the real economy, most of the assets and debt must be foreign - perhaps in the old colonies.

our economy is sliding each quarter,this is after massive public spending cuts.

The sad truth is that a large part of the real economy depends on government spending, so if the government spends less, the economy contracts. In any case I believe any change in GDP is overstated, because the figure is adjusted for inflation, and in line with other governments, ours has consistently changed the way inflation is calculated, resulting in it appearing lower, ever since we had high inflation in the '70s. They say the reason for changing the way it's calculated is because the old method was inaccurate. So either the high inflation in the '70s didn't happen and was overstated, or else the rate of inflation nowadays is understated. Both cannot be true. Equally, either growth in GDP was understated in the '70's, or else it's overstated now. Going by what I see, I'd say the latter is true.

Who knows what the answer is.

Mervyn King thinks we should reform the Bank Charter Act of 1844, because it didn't forsee the creation of electronic money.

Here's a good article from the Federal Reserve Bank of Chicago on money creation.

Who Creates Money?

Changes in the quantity of money may originate with actions of the Federal Reserve System (the central bank), depository institutions (principally commercial banks), or the public. The major control, however, rests with the central bank.

The actual process of money creation takes place primarily in banks.' As noted earlier, checkable liabilities of banks are money. These liabilities are customers' accounts. They increase when customers deposit currency and checks and when the proceeds of loans made by the banks are credited to borrowers' accounts.

In the absence of legal reserve requirements, banks can build up deposits by increasing loans and investments so long as they keep enough currency on hand to redeem whatever amounts the holders of deposits want to convert into currency. This unique attribute of the banking business was discovered many centuries ago

http://upload.wikimedia.org/wikiped...y_Mechanics.pdf

It goes on to explain how the amount of money banks can create is restricted by a fractional reserve ratio, but while that's true in the US and Eurozone for example, there is no such legal reserve ratio in the UK. So I doubt the UK central bank has as much control over commercial banks and their creating money compared to the US and Eurozone central banks. While the government here does tell the banks to keep a certain amount of reserves, over and above that they are seemingly free to create all the electronic money they like by making loans to whoever they like.

If the Bank Charter Act was amended to include electronic money, then just as the Bank of England is the sole issuer of banknotes, it would also be the sole issuer of electronic money. Commercial banks would still be free to lend, but they would only be able to lend what they have, rather than create new money by lending what they don't have.

Mervyn King has also said, ''out of all possible banking systems, the one we have today is the worst.'' Since money is created by commercial banks, it's created as debt. So the economy first has to perform well enough to pay the interest on the money it uses, before anyone else can benefit. So one might ask, why should money be created and lent, as opposed to created and spent, since spending money is what makes the economy grow? If all the profit the economy produces to pay interest was reinvested in the economy instead, the economy would do considerably better than it does.

Here's an article I came across the other day which argues the case for this:

The Case For A "Greenback" Pound

And a couple of sites I came across a while ago with more details. One for the UK:

http://www.positivemoney.org.uk/

And one for the US.