Tag Archives: Banks
This week on Facebook: I have posted a lot on the subject of money, often referring to Investopedia, the International Monetary Fund, European Central Bank (which is not a ‘central‘ bank at all) and the Encyclopaedia Britannica¹.
- Investopedia: Everyone uses money.
- IMF: Money may make the world go around, as the song says.
- ECB: The nature of money has evolved over time.
Holding the views I do about money and especially ‘the double coincidence of wants‘ problem, I now find myself torn between the notions of commodity money and fiat money. Of course whether or not either money has value ultimately comes back to the double coincidence of wants, this time being set by the Foreign Exchange Market².
The value of a country’s currency depends on whether it is a “free float” or “fixed float”. Free floating currencies are those whose relative value is determined by free market forces, such as supply / demand relationships. A fixed float is where a country’s governing body sets its currency’s relative value to other currencies, often by pegging it to some standard. Free floating currencies include the U.S. Dollar, Japanese Yen and British Pound, while examples of fixed floating currencies include the Chinese Yuan and the Indian Rupee. Foreign Exchange Market
The reasons for a State investing in another State’s money may be quite complex, which raises the question of if China’s wealth is in the free floating USA dollars debt that it owns, or the fixed floating currency of the Yuan. Read more of this post
This week on Facebook: Last Sunday I tried to show the inflationary effect of fiat money that was introduced at Bretton Woods in 1971. While I think it was something that I failed to do successfully, I may have indicated how difficult it is to arrive at a figure for inflation that is not subject to government fiscal policy. Read more of this post
This week on Facebook: To follow on from last week I reprised this post in which I reviewed money and debt from previous postings. With only slight variations the post remains much the same and now includes a new one from 2011 (click on image below).
¯This week on Facebook: The ascendancy of unconstrained finance has always been a feature of wealth and poverty, exacerbated in 1981 (and since) by the cost of a social welfare programme. With deficit financing used to increase the inevitable shortfall in government budgets and the cost being borne by a fiscal policy that is an increasing burden on the taxpayer already burdened with government financial errors.
State prediction of economic growth have not been realised and the general public have, of recent years, mostly been subjected to austerity. This austerity is created by debts encouraged by The City and low incomes encouraged by State fiscal policy.
This week on Facebook: I can’t think of an answer to a financial dilemma constantly driven by political imperatives and am not so conceited that I would ever try to suggest one¹. Regression at my age is a common occurrence and my diffuse dissatisfactions increase day by day, with my belief that the world “is going to hell in a handcart”. On becoming an octogenarian next May what other view would I hold! Perhaps my interest in history is an expression of that regression. I constantly regard events as being a case of “one step forward two steps back” and history replete with stories of debt. Read more of this post
This week on Facebook: Money and debt caused me to review my postings from five years ago, and one from even earlier (2011). I posted Money money money…. in January 2013 and then Crises & Credit in February, the first article posted being somewhat allegorical and intending to be amusing. However, it did lead to the second article, which is intended to be specifically about private debt but mentioning both private and public debt. The difference being that private debt is the debt accumulated by individuals or private businesses in the debts of personal loans, credit cards, or business loans (including corporate bonds). Whereas public debt is the sum of the financial obligations incurred by the State and its public administrations. This debt can be accumulated by the government directly or a government agency at any level and is recovered by taxation and income from the sale of government bonds (gilts).
This week on Facebook: Blissful ignorance, Tax Havens and the Paradise Papers —
To each his suff’rings: all are men,Condemn’d alike to groan,The tender for another’s pain;Th’ unfeeling for his own.Yet ah! why should they know their fate?Since sorrow never comes too late,And happiness too swiftly flies.Thought would destroy their paradise.No more; where ignorance is bliss,‘Tis folly to be wise.
This week on Facebook: When I wrote Monday’s article in 2011 about fiat money I never had in mind the cryptocurrency in last week’s post, although I was certainly aware that the ravages created by the inflationary effects of fiat money did not protect wealth. Wealth protection only comes to those with the means of investing in things whose rarity increased their value. The rise in the value of cryptocurrency, particularly as a wealth protector (like that of gold), shouldn’t really have come as the surprise it did. Read more of this post
This week on Facebook: My attention was caught yet again by shills offering fantastic returns on a financial investment. It could be harsh perhaps to use the definition of a shill as, an accomplice of a confidence trickster or swindler who poses as a genuine customer to entice or encourage others [SOED]. However, it’s implausible the think that a shill is anything other than, a person who pretends to give an impartial endorsement of something in which they themselves have an interest [SOED]. Of course the term shill, when used in this context and especially in a derogatory sense, is sure to raise a lot of resentment, especially when shills are simply responding to the volatility of an economic cycle that is the inevitable result of a fiscal policy adopted by a public administration. In today’s world the euphemism financial crisis is used to disguise actions taken by the public administration that exacerbate the economic cycle and inevitably fail to provide a stable economy. Read more of this post
Sir James Faulkner QC regarded juries with disdain, thinking the uneducated hoi-palloi who now sat on them as being incapable of grasping the finer points of common law and particularly those involving finance and economics. Nevertheless, he had just delivered what he considered to be a flawless case for the prosecution. His innate hubris convincing him that the lucid presentation and eloquence of his delivery must surely have convinced even the simplest mind on the jury of the defendant’s guilt. Sitting down he brushed the front of his gown, a preening habit he had developed since taking the silk, smiling self assuredly whilst nodding to The Honourable Mr Justice Pettigrew, confident that he had impressed the judge. In his own mind at least, the outcome of the trial in his favour was assured.
Aware that the jury shared his ennui after having endured such a marathon delivery Mr Justice Pettigrew looked at the pocket watch that he always placed on the bench before him, relieved that it indicated a suitable time for him to call an adjournment until the following morning.
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