"Positive Money" a Debt Crisis Solution?

[psionl0]

Yeah, that's strike one. It's in video format, which is strike two. The name "Positive money" is strike three. And just in case someone calls that a ball, it's advertised as a "Simple solution", which is strike four.

Fancy that! You managed to dismiss the entire concept without considering a single fact!

 

[Wezznco]

Yeah, that's strike one. It's in video format, which is strike two. The name "Positive money" is strike three. And just in case someone calls that a ball, it's advertised as a "Simple solution", which is strike four.

This is the exact assumptive attitude I wanted to avoid.

Thank you psion. I'm curious as to why the banks lending power diminishes if full reserve banking is implemented? Surely the money out there can still be lent? Does it just prevent future gains from newly invested money?

So you believe this Positive Money (horrific PR) to hold some viability?

You said that the government would benefit from such a system because it gives them financial independence... are the only losers here the banks?

Thanks again, I wish I could multiquote you all lovingly but unfortunately the work computer uses IE5 which leads to a very laborious quoting method using code.

 

[JJM 777]

Still don´t know what the suggested Positive Money is, so let me guess:

A positive debt. You just get 5000 EUR on your bank account, without a debt anywhere. It is all plus for you. Money for Nothing (registered trade mark of Dire Straits, Inc.).

 

[psionl0]

Thank you psion. I'm curious as to why the banks lending power diminishes if full reserve banking is implemented? Surely the money out there can still be lent? Does it just prevent future gains from newly invested money?

Any newly created money would initially find its way into current accounts (or notes and coins) which the banks are unable to lend out. Banks can only lend money from their own equity (which is also full reserve) or from money invested in interest bearing accounts. In the long run, as more money gets introduced into the economy, the banks' equity will shrink relative to the money supply which reduces the percentage of the money supply that the banks can lend from.

So you believe this Positive Money (horrific PR) to hold some viability?

It's one of the better proposals that I have seen (compared to The Money Masters, Digital Coin and Mathematically Perfected Economy). It's not the whole solution however. There is still the problem that if banks are able to re-lend the money they collect in interest payments then overall debt will rise relative to the money supply.

You said that the government would benefit from such a system because it gives them financial independence... are the only losers here the banks?

As far as I can see, this is the case. All other forms of debt financing (bonds, stocks, securities etc) will be unaffected by the change.

Thanks again, I wish I could multiquote you all lovingly but unfortunately the work computer uses IE5 which leads to a very laborious quoting method using code.

It shouldn't matter if you use IE or lynx. Just click on the ["] button for each post you want to include in your multiquote and click on

for the final post you want to include and all of the posts will appear in your reply window.

 

[timhau]

Fancy that! You managed to dismiss the entire concept without considering a single fact!

True. But given that my time is limited, if it bears all the outer marks of kookery, I'll skip it. You're welcome to do otherwise.

 

[The Central Scrutinizer]

Yeah, that's strike one. It's in video format, which is strike two. The name "Positive money" is strike three. And just in case someone calls that a ball, it's advertised as a "Simple solution", which is strike four.

Exactly.

If there was anything to this nonsense, I'd be reading about it in the Wall Street Journal and/or New York Times, both of which I read every day. I wouldn't have to be alerted by email.

 

[The Central Scrutinizer]

True. But given that my time is limited, if it bears all the outer marks of kookery, I'll skip it. You're welcome to do otherwise.

Exactly, again.

Note to psychics, energy healers, goldbugs, and other assorted nutwads: This is a skeptics forum. We aren't interested in "learning the facts" by watching any of your YouTube videos, or investigating every email with a subject line of "The truth they don't want you to know about!!!". If you have a claim, 1) make it, then 2) prove it. Based on my 10+ years of experience here, and seeing various loonies come and go, most of you will not even be able to accomplish #1.

Additional note: Pointing to nutwad video #2 as proof of nutwad video #1, is not considered valid evidence.

 

[Francesca R]

Helpfully they provided a three minute video in lieu of the more normal hour or series of hours. Not long into it is the copied refrain "banks create money from thin air!" and "it's not even paper, just digits typed into a computer".

That conveyed to me all I needed to hear about these folks.

 

[kevsta]

Helpfully they provided a three minute video in lieu of the more normal hour or series of hours. Not long into it is the copied refrain "banks create money from thin air!" and "it's not even paper, just digits typed into a computer".

That conveyed to me all I needed to hear about these folks.

well, the website, like many others these days, also has a helpful navigation structure, containing links to other pages contained within it.

one of them says this "Proof that banks create money" and links to here.

http://www.positivemoney.org.uk/how-banks-create-money/proof-that-banks-create-money/

which should be a lazy video-challenged skeptic's paradise, full of all kinds of quotes from people (who really should know) about the money creation process, and links to various citations, the Bank of England mostly, along with the Fed, Bundesbank etc.

you didnt need to suffer 3 whole minutes of video for that

 

[Francesca R]

Couple of the previous go-rounds of this stuff.

 

[The Central Scrutinizer]

Couple of the previous go-rounds of this stuff.

The same nonsense keeps getting repackaged.

 

[The Central Scrutinizer]

Francesca, do you think the target audience of the video was defined as ex-banker / fund managers, or do you think the language may have been targeted at the general public?

If they go with the "create money out of thin air" nonsense, I would say general public, or more specifically, the loony tune subsection of general public.

 

[kevsta]

If they go with the "create money out of thin air" nonsense, I would say general public, or more specifically, the loony tune subsection of general public.

these people are all "looney tunes" are they ? from the page.

Don’t take our word for it – this is Martin Wolf, chief economics editor for the Financial Times:

“The essence of the contemporary monetary system is creation of money, out of nothing, by private banks’ often foolish lending…”((Martin Wolf, Financial Times, 9th November 2010))

In other words, when banks make loans, they create brand new money (in the form of the numbers in our bank accounts).


Here’s further confirmation from a Bank of England paper. Note that the term ‘bank deposits’ refers to the numbers in your bank account.

“When banks make loans, they create additional [bank] deposits for those that have borrowed the money”1

So when you take out a loan from the bank, the ‘money’ is just typed into your account and created effectively out of nothing. Here’s further proof from Paul Tucker, Deputy Governor of the Bank of England and Member of the Monetary Policy Committee:

“…banks [make loans]2 by simply increasing the borrowing customer’s current account…That is, banks [make loans] by creating money.”3

interesting.

 

[Cuddles]

Perhaps you'd like to try again without all the personal attacks and importing previous arguments?

Replying to this modbox in thread will be off topic  Posted By: Cuddles

 

[psionl0]

Helpfully they provided a three minute video in lieu of the more normal hour or series of hours. Not long into it is the copied refrain "banks create money from thin air!" and "it's not even paper, just digits typed into a computer".

That conveyed to me all I needed to hear about these folks.

Would you have been more impressed if they said, banks create money from securities or bookkeeping entries or something?

 

[Francesca R]

Would you have been more impressed if they said, banks create money from securities or bookkeeping entries or something?

I'm not impressed if the proposition is that fractional reserve ratios and credit multiplication should be outlawed.

I didn't look far enough to know if that is the message. But that's what those soundbites lead to in my experience.

Am I wrong about their premise?

 

[jhunter1163]

The topic of this thread is not each other, nor is it forum management. Do not personalize your arguments and remain civil and polite. Further incivility and derailing will lead to further mod action, including edits, infractions, suspensions, banning, thunder, lightning, hail, famine, pestilence, frogs, boils, locusts, and flies. Thank you for your cooperation.

Replying to this modbox in thread will be off topic  Posted By: jhunter1163

 

[Tippit]

I'm not impressed if the proposition is that fractional reserve ratios and credit multiplication should be outlawed.

I didn't look far enough to know if that is the message. But that's what those soundbites lead to in my experience.

Am I wrong about their premise?

Francesca, how do you explain your previous acknowledgement that money is in fact created "out of thin air", and now your denouncement of that fact? I am being censored, so kindly answer this question before my post gets deleted/moved.

 

[Francesca R]

Francesca, how do you explain your previous acknowledgement that money is in fact created "out of thin air", and now your denouncement of that fact? I am being censored, so kindly answer this question before my post gets deleted/moved.

I haven't "denounced the fact". As far as I recall I have always accepted that credit multiplication creates money (not base money).

I merely commented on what I have come to find usually follows the referenced soundbite. Which is usually a wrong headed and internally inconsistent call to criminalise credit and call banking theft/fraud and recommend money fixed to element 79 in the periodic table.

 

[stilicho]

Francesca, how do you explain your previous acknowledgement that money is in fact created "out of thin air", and now your denouncement of that fact? I am being censored, so kindly answer this question before my post gets deleted/moved.

This "positive money" nonsense will create immediately a demand for credit outside the financial system that will result in the creation of "chits" or "quanta" or something else that people can actually use.

Imperial sixteenth century Spain had the closest modern equivalent to "positive money" and first their economy, then their military, and finally their entire social structure collapsed as a direct consequence.

If I can, I'll locate a YouTube on the efficacy of the Spanish financial system.