Tag Archives: Quantitative Easing

Cassandra on the only game in town?


This week on Facebook: I wrote (at some length) about The Money Tree in 2018, in the post I mentioned Modern Monetary Theory (MMT) and its claim that, with the political climate turning against the acceptance of austerity, it is time to reject the hegemony of neoliberalism. It is claimed that MMT economics never “run’s out of money” the way people or businesses can. The pandemic caused by Covid-19 has made MMT major topic of debate among politicians economists. Read more of this post

Covid-19 Pandemics & Politics


This week on FaceBook: Covid-19 has fuelled the pandemic and social media¹ by reporting on the coronavirus outbreak with information that satisfies everyone from conspiratory theorists, people who have turned it into a modern anxiety crisis², to so called ‘normal people’. However, what is meant by ‘normal’ is debatable. I have a friend who believes that everyone who appears to be ‘normal’ has a ‘problem of some sort’ —  something that most ‘normal people’ learn to live with.

I remarked in my post last week (Covid-19 global consequences) that this is grist for the mill to politicians especially — (from my perspective, hardly normal people). Nevertheless, this is not the first global pandemic³, nor is it the first to appear in the social media. Perhaps its appearance on the social media has made politicians, their economic advisors and The World Health Organisation (WHO), the first to induce the global anxiety crises that it has. Of course the global anxieties caused by other pandemics are not so apparent and where the blame for any anxiety they may cause globally is speculative.

Where not directly complicit themselves in the process of engineering crises for political purposes, elites and their ideological lickspittles reveal time and again a tenacious capacity to exploit legitimate crises—if not for proactive personal gain, then to avoid responsibility for creating them in the first place. The Political Uses of Pandemic

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Covid-19 Global


This week on Facebook: Covid-19 is very much a global political and commercial pandemic and I am posting political and economic articles related to Covid-19¹², known globally as the coronavirus. My reprise posts on the fiscal crises that the world finds itself in post the introduction of fiat money in 1971 — the advent of global deficit financing and a global fiscal deficit are covered by this global pandemic.

A financial and economic crisis will tend to arise from a fiscal deficit if government debt levels contribute to a loss of market confidence in a national economy, reflected in turn in instability in currency and financial markets and stagnation in domestic output. A political and social crisis will tend to arise if both the fiscal deficit itself and the necessary corrective measure implemented to eliminate that deficit result in further losses of employment and output, falling living standards, and rising poverty. Britannica — Fiscal Crises

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Money Creation (reprise)


In 2013 I came across The New Economics Foundation (nef) publication guide to the UK monetary and banking system with the title ‘Where Does Money Come From?’ contending that there is widespread misunderstanding of how new money is created. The original can be read here, implying that the only widespread understanding of ‘money’ lying in its purchasing power seems a reasonable conclusion and may compliment the monetarist viewpoint. Read more of this post

The Quantity Theory of Money


This week on Facebook: I have to think very hard about whether I am a monetarist or not, the answer seems to depend on how strongly I believe that the State guides its political economy by changes to the monetary supply and other forms of fiat money creation. It was an article or remark of Mervyn King in which he displayed misconceptions about money velocity, particularly with regard to quantitative easing, that first brought the Irving Fisher equation of exchange (MV=PT) to my attention. Economist vacillate over measuring Instruments in economics¹ and while I would hardly call myself an economist — I share in their vacillations. Read more of this post

Plastic Cards & Money


This week on Facebook: As I remarked in my post last week, It is interesting that there appears to be different views on when credit cards become money!

Where does “plastic money” like debit cards, credit cards, and smart money fit into this picture? A debit card, like a check, is an instruction to the user’s bank to transfer money directly and immediately from your bank account to the seller. It is important to note that in our definition of money, it is checkable deposits that are money, not the paper check or the debit card. Although you can make a purchase with a credit card, it is not considered money but rather a short term loan from the credit card company to you. When you make a purchase with a credit card, the credit card company immediately transfers money from its checking account to the seller, and at the end of the month, the credit card company sends you a bill for what you have charged that month. Until you pay the credit card bill, you have effectively borrowed money from the credit card company. Measuring Money — M1 and M2

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What does inflation mean!


This week on Facebook: I am still being asked, “Who is it that this debt is owed to. The examples of  public debt that I referred to last Sunday appear’s to be of little concern to an electorate who assume that economic growth can continue unabated. The electorate’s assumption appears to be that the distribution of this perceived economic growth will be used to support the State’s spending on a social welfare programme. It ignores the history of their public administration’s attitude to debt and particularly to austerity. It was Germany that adopted the earliest modern social welfare programme under the aegis of Otto von Bismarck in 1889 (3).

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Sunday 4/8/2019


This Sunday on Facebook: It’s impossible to separate money from inflation in a fiat money world, then it is also impossible to separate money from the gold standard if the rate of exchange is determined by the State.

Money, it’s a crime
Share it fairly, but don’t take a slice of my pie
Money, so they say
Is the root of all evil today
But if you ask for a rise, it’s no surprise
That they’re giving none away

Pink Floyd’s lyrics, “Share it fairly but don’t take a slice of my pie“, hold as true today as nearly 50 years ago when the song was written. A ‘slice of my pie’ is always the issue. In my post of 2011, I wrote that the war reparations of WWI that were imposed on Germany 100 years ago caused the resignation of John Maynard Keynes from the British delegation. In Keynes’ book The Economic Consequences of the Peace Keynes pointed out that the principle of accumulated wealth based on inequality was a vital part of the pre-First World War order of Society and ‘progress’ as it was understood then. Echoing a principle common in todays world that it is unnatural for a population minority to accumulate such huge wealth when so few enjoyed the comforts of life.

The hyperinflation brought about by The Weimar Republic, compounded by the Treaty of Versailles a 100 years ago, being tempered by the thought that it couldn’t happen to money in the UK. Of course I didn’t count on the Bretton Woods Agreement introducing fiat money to the world in 1971.  In my naivety (I was very young at the time), I assumed that politicians acted as the representative of their electorate. Instead the State’s public debt is a common function of all working economies. There has been an increase in the debt to GDP ratios throughout the world in past decades and yet The U.S. Dollar Still Dominates Global Reserves.

Perhaps it is time that the eccentric heroine of Christopher Isherwood’s novella Sally Bowles is resurrected — thought I doubt very much that any new terms will be invented for the inflation created by the State in a fiat money world.

Part of the fascination of Weimar Berlin lies in the mirror it holds up to our own time. In Cabaret, fictional Nazis beat up the gay hero and kill cabaret owners who dare to criticise, or simply to make people laugh at, pomp and stupidity. If the musical is at last being staged in a Berlin that never made much of Isherwood, then it may be because the producers want to emphasise alarming parallels. A newly vibrant German and European capital, Berlin today has record unemployment and recession is a returning threat. Some of the young have embraced the violent right, with its hatred of foreigners and permissiveness, and parade menacingly through the streets. Wicked joys (2004)

 

Inflation!


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

Sunday 28/7/2019


I did consider withdrawing this post, but it has made me look at ‘Measuring Worth‘ in a new light and is useful to me. Specifically it made me consider how complex the issue of inflation actually is in a fiat money world. Especially in the light of the Retail Price Index and the Consumer Price Index that comprise the items making up the UK’s ‘shopping baskets’.

The best that I could do was to measure the value of one pound (UK) using three sequential periods from 1947 until 1970 and from 1972 until 2018. I missed out 1971 as it was the year that fiat money was introduced into the global economy. Even so the cost of inflation to the consumer for a basket of goods not included in the RPI or CPI indices was hard to identify. This is particularly true of groceries that are considered to be a necessary expenditure. Food is approximately 10% of the basket depending on the percentage variability of the other included items.  The following notes below point out that measurements of inflation are based on a fiscal policy that is related to the RPI, CPI indices.

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Martin Widlake's Yet Another Oracle Blog

Oracle performance, Oracle statistics and VLDBs

The Land Is Ours

a Landrights campaign for Britain

The Bulletin

This site was created for members and friends of My Telegraph blog site, but anyone is welcome to comment, and thereafter apply to become an author.

TCWG Short Stories

Join our monthly competition and share story ideas...

Ed Conway

Blogs and charts and stuff

Public Law for Everyone

Professor Mark Elliott

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