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Banking mythes with the neo liberal economy

This topic contains 35 replies, has 7 voices, and was last updated by  jens > 7 days ago.

Discussions Politics Today Banking mythes with the neo liberal economy

Viewing 10 posts - 11 through 20 (of 36 total)
  • #1703979
    jens
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    Member since: May 3, 2006
    Topics: 15
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    jens

    Paulinem  –  whatever  you call it  – Keynesian, Social Credit,  Capitalist, Socialist or Neo-Liberal  economics –

    they are all subject to the  same laws of Nature (i.e. physics, chemistry, mathematics,  etc..) regardless  of our ways and  rules of  organizing ourselves –

    and experience  has  shown  that more  widespread  participation in  enterprise  despite all its  failings and  crimes  possible within it –

    is safer  and economically more widely rewarding through a widespread  liberal banking  system than  through a politically managed  monopoly  bank, which is not  subject  to the need of profitability and therefore  may lead to politically inspired bigger economic mistakes than what a multitude of  independent  banks can normally be capable of.

    They are all  subject to failure and collapse if issuing  credit beyond the  capacity (or willingness) of debt  repayment – especially in the  case of  negative  profitability of the  credit use.

    Does that  make sense ?

     

    #1703991
    critic
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    Member since: June 6, 2011
    Topics: 17
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    critic

    Hi- Jens 🙂

    When you posted this….

    they are all subject to the same laws of Nature (i.e. physics, chemistry, mathematics, etc..) regardless of our ways and rules of organizing ourselves –

    I could see your confusion not only because you could not reference which laws you refer to but also when you posted …..

    Does that make sense ?

    in essence

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    #1703998
    jens
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    Member since: May 3, 2006
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    jens

    Critic – the  law of physics I am referring to is,  that  for  us humans it is impossible to create anything on the material level out of  nothing.

    That’s why  it is impossible to  create  wealth  without  saving  and profitable investment out of the  fruits of  your  labour, 

    Unprofitable work (consuming more energy than what the  fruits of your labour  make available to you) leads  you  quicker to starvation the  harder  you  work, and even the  fruits of profitable  labour  leave  you  poor  if it is all  consumed  hand-to-mouth, and  nothing is saved for reserves and  profitable  investment.

    No need to  say,  that unprofitable investment  can also lead to starvation, especially if  done increasingly on  credit, as e.g. in the  case of serious  gambling.

     

    #1704000
    paulinem
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    Member since: July 8, 2006
    Topics: 9
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    paulinem

    Critic – the  law of physics I am referring to is,  that  for  us humans it is impossible to create anything on the material level out of  nothing.

    Jens you are WRONG …..The Australian  trading banks ie  ANZ ASB BNZ  CAN and DO Create money out of nothing via the computer and  THEY are creating credit out of nothing today and yesterday…in fact  ever since Roger Douglas changed our economy from Keynesian to Liberal in 1984 they have done this .

    What these banks  do need to do to ensure a profit is to make sure the borrower of this CREATED CREDIT has the where for all to repay the CREATED out  of nothing CREDIT back to the bank WITH GOOD Interest ie REAL money is  expected to be given  by the borrower of the  created credit to repay the loan/mortgage etc

    Before 1984  OUR ( owned by the people of NZ) reserve bank created money out of NOTHING to serve ans give to the community ie family benefit paid out by Govt to all mothers with children. Often used as a deposit to buy a home after it was capitalized by the mother into a lump sum.

    Muldoon had to borrow to get overseas cash re the think big project required overseas money to buy over seas products required for the construction…our NZ created credit was of no interest to those that sold these overseas products, they needed overseas funds .

    #1704058
    jens
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    Member since: May 3, 2006
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    jens

    paulinem – can you please tell us then, why can you not  create  credit out of  nothing  yourself?

    My understanding is, that if you did not  have  adequate  backing for it,  your  credit  be  worthless, and would  not you be more in need of  credit  than being able  to grant it ?

    When a govt. Reserve Bank prints  debt  free money not backed  by adequate  savings (capital) resources, it  is at the  expense of   reducing   value of the  money in  your  pocket and in the  banks, so even that is not  something created out of  nothing.

    When the banks  grant you  overdraft credit “out of nothing”, they  have to be  prepared to dish out the  cash well before you repay the  debt, as I believe  has been explained  already.

    So please explain again – how can that be “out of  nothing” ?

    Only when you have  repaid  the  credit “out of  nothing”,  the bank will be completely relieved  of the  possible  need of cash  for  your  credit “out of  nothing” – and the  bank has  helped you to wealth ownership  (creation) well before you could have saved  the  total  cost of the asset  by yourself alone.

     

     

     

     

     

     

    #1704101
    paulinem
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    paulinem

    Jens stop being silly and wake up a trading bank can and DO create credit out of nothing…reputation etc big profits as  announced s mortgagees paying back a mortgage in REAL MONEY.Makes banks like ANZ very very wealthy today with exorbitant profits .

    For years people industry etc have got credit granted to them based on reputation etc etc

    No I am not disscussing this topic anymore with you my name isnt Crtic and you have shown time after time you dont want to face reality of banking today in comparison to when you grew up from childhood to adulthood…yes back then banks were  more accountable unlike today !

    #1704150
    jens
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    Member since: May 3, 2006
    Topics: 15
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    jens

    O.K. – with due respect then, paulinem –

    Yes, even though I don’t want to  agree that bank credit is  created out of nothing, it  does  create  extra currency in  circulation to the  extent of not all of a  bank credit loan having been  converted into cash by the  time the  original  overdraft credit is all  repaid.

    This is a cause of inflation  just like the “debt free money”  printed  by a  govt. bank –  and   a mild rate  of say 1 – 4% of  inflation  is generally  considered  even desirable as a  dis-incentive  to hoard too much idle  cash  for too long “under the mattress”  and out of useful  circulation .

    I don’t  remember if it was  a neo-liberal “rogernomic” initiative  or not –  to limit  excessive  credit  creation through  the Reserve Bank monetary  policy  directive  to keep inflation  between 2 – 4%, –  and I think this  should not be  abandoned.

    But yes, paulinem –  the mistake has been made of  not  having introduced a  security and  prosperity  wealth  ownership creative  universal savings  rate into the  taxation  system with  participation  by all,  to  overcome  the  socio-economic  split into  haves and have-nots with mutually  somewhat antagonistic  interests.

    The correction of this mistake  would improve the  economic performance  and welfare of the  country, by protecting  us  from  the   extremes of of  both,  unbridled  neo-liberalism  and  excessive Keynesianism.

     

    #1704162
    halcyon
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    Member since: May 4, 2014
    Topics: 8
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    halcyon

    Actually paulinem, jens is quite correct in his reply to your last post. One only had to consider the reaction to the Fed’s actions of quantative easing a few years ago. The Greenback ($US) dropped in value. This lead to increasing inflation in America and resulted in greater  hardships for those on low incomes.

    The value of a country’s currency is based on the country’s ability to honor the promise to repay the currency. Remember, our old Pound Notes used to have the words “promises to pay” and the signature of the Reserve Bank Governor on them.

    One only has to look at countries like Venezuela. According to Forbes.Com:- “ On May 30th, I accurately measured Venezuela’s annual inflation rate, and for the first time, it breached 25,000%”  Remember Venezuela has a socialist government and is rich in oil. This demonstrates the problem of quantitate easing.

    So yes, you are correct, a government can print money. But the country has to be in a position to have either income or assets to cover the value of the money. Otherwise we risk hyperinflation.

    “If liberty means anything at all, it means the right to tell people what they do not want to hear.” (George Orwell, The Animal Farm)

    #1704170
    paulinem
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    Member since: July 8, 2006
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    paulinem

    Halycon I have always said that a country creating its own money must be done responsibly …that is the nature of an economy been  good or bad like Zimbarbwee. It was this economy of Keynesian that took NZ out of the depression and housed its people. They gave the mums a family benefit per child, which she could capitalize for the natural  life to adulthood ( when it stopped ) as a deposit for a home.  Here in NZ we had during this time none of the growth in crime and violence as incomes were generally equal and enough to buy the basics

    Also paid for military action in WW2  Korea and Vietnam etc

    BUT I also feel under neo liberalism which has  allowed private trading banks t create their own money is NOT responsible. This has lead to highly over inflated property prices,  due to irresponsible lending of  created mortgages.  They demand REAL money be used to pay them back  re mammoth profits by these mostly Australian owned banks been made ie see above cartoon for banks and Melbourne cup ohhh so true

    I have read in the news today an Auckland property buyer brought property about three or four years ago for 3.4 million. He has just sold it for $62 million, I just dont buy this as natural and normal in the buying and selling market. Banks with irresponsible lending are causing the severe hardship in many homes ie paying the over inflated mortgage  cost or paying exorbitant  cost of rent. This has seen more and more demand for higher and higher wages. Pushed mental health costs etc higher as humans break down under the pressure.

    #1704238
    paulinem
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    Member since: July 8, 2006
    Topics: 9
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    paulinem

    In remembering my own childhood in the 1950s and again when I was raising my kids in the 70s, The economy including mortgages was such  that Mum  could and was in most cases be  a stay at home mum. We used this time taking our children  to play centre  and Kindergarten etc More for company for ourselves of people pf similar age and their kids played with our children. To this day I am still friends with another mum whom then at playcentre age lived close by to myself;.

    In general we spent a considerable amunt of hands on time  time with our growing children. We could as generally Dads earned enough to pay the mortgage and and provide money for food power etc. The Family benefit was also  great help though for the extras you needed. We  Mum’s didnt back then spend considerable time a K Mart Warehouse etc shops buying products we didnt really need.

    Generally we spent our income on the  basics that we needed and stayed at camping grounds for our holiday in sun areas like Queenstown etc in  a borrowed tent etc . My  family of kids and husband stayed free camping on a farmers land ( with permission ) and enjoyed a nice holiday with the river close by.

    I also was not shy to shop at second hand shops. Relatives and friends generally passed their children’s clothes when outgrown them to  family members and friends whom acceapt them with pleasure as often they contained rather nice clothes that I could not afford to buy.

    Move on to the neo liberal  economy, Mortgages are generall crippling high. Rents ae high. Mum has little choice but to put her pre schooler into day care etc as Mum and Dad need to work to get enough money to live and pay basics like rents mortgages  now privately owned electricity, high transport costs. etc etc Much encouragement to spend money earned on Chinese made products at places like K market provides .

    Recently on face book a survey was done with  little kids from about 4 to 8yrs …they were asked to say what they hoped and like what  Santa would bring them for Christmas …well all the normal request for kids this age was said back to the interviewer from these children for Santa to give them .

    Following this they then were asked what they would like Mum or Dad or both to give them for Christmas …ALL said in various ways they would like most was for their mum and dads to give them for Christmas was  every day quality  TIME with the child for the day!

Viewing 10 posts - 11 through 20 (of 36 total)

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