Pound at all time low? Well that was a lot of fuss about nothing...

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Starts off ok ish - Commercial banks are licensed by UK govt to create £s. They are the only institutions, apart from govt, legally allowed to create £s.

Then he rapidly descends into economically illiterate gibberish.

He's spent too much time with the 'central banks are evil' donuts. I was half expecting him to go on about bitcoin ...

For example:

. 'you ask the bank for £200,000' is simplistic and not how it works. If the bank doesn't think you are creditworthy for the £200,000 then you won't get it it. Technically, the bank discounts your signature on the agreement/your creditworthiness into the £200,000 loan.

. at 1:11 - 'this is how all money is created in the world' ... that's boll0x. It's how all money is created in the private sector. He is seemingly blissfully unaware of the public sector.

. 2:03 - the BoE is wholly owned by UK Govt, HMT is the sole shareholder. UK Govt tells the bank what to do every single day and it must comply. Govt has, notionally, devolved monetary policy to the bank but it has the power to direct it the bank in any way it sees fit. The entire Court of Directors are political appointees.

2:17 - the BIS controls the BoE and the 'money supply' of the world??? ... sorry, that's just pure sh!te. I doubt he'd be able to explain what he thought the money supply is and how it can be controlled at all.

it continues in a similar vein. It's all completely risible.

The Henry Ford quote is as relevant today as it was when he made it.
 
I'm the tenner in the back pocket able to by a pint type of bloke and lot of this stuff goes over my head. So I posted up in what does the team think kind of way.
 
JohnD said:
What are his credentials?
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No one one seems to have told him why loan rates are always higher than base rates. It's a big clue.

Some economists do wonder if money should be shifted entirely to government control.

He also doesn't mention why currencies went FIAT.

Given who he is i am a bit surprised.

:) Me I wonder how many GBP actually exist.
 
gant said:
I'm the tenner in the back pocket able to by a pint type of bloke and lot of this stuff goes over my head. So I posted up in what does the team think kind of way.
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Sure, I get that. It's almost as though the language used around govt fiscal ops is designed to confuse and put people off.

Most are content to believe the narratives I alluded to here. However, once you understand the pretty simple mechanics and the implications of that understanding it's impossible not to look at things differently.
 
GBP
3% currency, 18% reserves and 79% in banks.

In the distant past various sizes of bronze axes were used as money. Hoards of small useless ones have been found.
 
wellyfish said:
Nope.
Banks don't loan out people's savings, the loan itself creates a new deposit.
It's new money as soon as the bank approve the loan. For example:

. I originally have £10k in my bank account
. I apply for a £10k loan
. Bank approves the loan
. The loan issue creates a new deposit of £10k in my account
. Bank now has a new asset of £10k + interest
. I now have a new liability of £10k +interest
. I now have £20k in my account, £10k of which is new money from the loan
Click to expand...

It isn't new money, it cannot possibly be. The manipulation of the numbers of £s on paper only reduces the buying power of all other £s in circulation, so your £10k, whilst new to you, will be made up of price rises of goods and services in the economy at a later date, hence - what people don't realise - money printing is inflation.

If your "money can be created from nothing" statement were true then why doesn't the government solve all our problems by printing us all a million pounds each?
 
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