We are all learning

Here is a rough transcription of the presentation for people who are hard of hearing. Apologies for the lack of grammar, I am working to improve the automated transcriptions -
hello lovely people are slightly different title presentation today or a least a different subject angle thing going to go to the Guardian: UK to start with and an article entitled money has been privatised by stealth the greatest privatisation in history has gone unnoticed it’s time to take from the banks the Power to produce money okay by Ben Dyson he starts the article it’s common knowledge that printing your own Singlish so £10 notes at home is frowned upon by her Majesty’s police yet there is a small collection of companies that are authorised to create and spend more new money than the counterfeiters have ever been able to print industry jargon these companies are called monetary and financial institutions but probably you know them as their street name banks take to the money that they create effectively out of nothing isn’t the paper money that bears the logo of the government owned Bank of England it’s the electronic money that flashes up on the screen when you check your balance at an ATM right now this electronic money makes up over 97% of all the money in the economy only 3% of money is still in that old-fashioned form of real cash that can be touched funny I was doing the shopping yesterday and the people in front of me paid with cash was going well haven’t seen that for a while right are let’s go on his how it works now out of your will do let’s have a look Ben Dyson the writer of the article and his credentials so I followed it into the Guardian to check and this is it his profile Ben Dyson is a specialist in money and banking he has spent four years researching and identifying flaws in the current business model used by banks globally to suck you should know stuff here is how it works he says in the article when you ask the bank for money to buy a one-bedroom box in London the money that appears in your account isn’t borrowed from some prudent grandmothers life savings in fact the bank simply types those numbers into your account creating brand-new money that you can now spend as other banks do exactly the same the amount of money in the economy grows and grows every new mortgage creates new money which pushes up house prices just a little more on forces the next buyer to borrow even more from the banks (here and more detailed and fully referenced explanation of this process is given in the book where does money come from published by the new economic foundation through this process of creating money banks have been able to inflict the money supply at a rate of 11.5% a year pushing up the prices of houses and pricing out an entire generation so he was quoting in all referenced NEF the new what was it new economic’s new economic foundation are follow the link to their website and I can recommend it takes to forget how got to it but they got videos in their of armed a few videos on the run giving Peter Schiff and absolute kicking which is to my mind a very good idea why because as will get later in this presentation that is what I’m against if I’m against anything having a prison in summary by prison having fun of one idea put everything through it because that is your idea and is not just got the prison it’s a little thingy references are coming it it’s duct taped to his head the prison that taped to his head and he annoys me immensely because of that it’s not what the prison pumps out it’s just the fact that everything has to be filtered through that prison duct taped now gas taped to his head anyway that the NEF website which is good fun I’ll find a good stab around it and I will be going back over the got some good stuff good new ideas there and they got a new book out things like that anyway Isabel Kaminski on FTI will fulfil picked up on the Dyson article in the Guardian and wrote her own article in Elf TA Vale on the demonisation of debt congratulations to Ben Dyson Soper set best money and banking specialist for finally discovering go money for how it works so quite a lot to take out of disease article we just think it’s sad that it’s taken this long for people to start recognising what’s been staring them in the face for so long now so that upon finally stumbling on this amazing treasure chest of knowledge regarding how central banks work people somehow think that the most obvious solution is the best one without considering the fact that some of the greatest minds who would did bother to take an interest when everyone was more busy watching X factor have likely already considered if not dismissed such concepts getting out of the was a good example of a relatively nerdy yet lay blog trying hard to get to grips with complex developments systems and even the basic foundations of the financial system itself if the one thing we know it’s that it’s not simple strictly via our day-to-day operations we encounter a multitude of varying opinions views and theories we struggle to communicate and make sense of them all sometimes we get things right other times we make mistakes but most of the time we recognise that the system is complex and even with our teams collective specialist experience to fall back on their isn’t a day where we don’t learn something new when reporting on the current crisis and this is why like FT A Vale and especially the girls in Isabel Kaminski Leeza Pollock and Tracey Holloway the boys are good too but the summaries like the girls later in the article are immune it’s a long article and the middle section that am not reading is from the Graber book around first 5000 years of debt which is obviously enjoyed the read and enjoyed and gives us the the restatement of the main Graber ponders position that am the money system has not gone barter money debt it’s actually gone through history debt money and sometimes barter is used when money is the some reason I become unusable but that’s another post but is is read the book and it seems very little was changed on that front even today that referencing ravers are going back to ancient times and the the debt forgiveness and all that sort of stuff except that now plumbing and this is where she got to is pawning her in the olden days plumbing is called repo the repo market whether you call it repo or pawning what it represents is a return to collateralised lending something which is happening now on a major scale and this is the big that of the two things I liked pushing this article the major new economic learning for us I think is that collateralised lending in the rarefied atmosphere that we don’t understand a thing of the the the the markets banks lending into each other central banks and hedge funds and will very trickiness often it was collateralised lending now they’re so nervous and not understanding the value of things that they’re demanding collateralised at all loans to be collateralised now in the past you could get away with aria payback Thursday I would argue it’s how the system is fixing itself by demanding collateral money cannot be extended out of thin air if every new obligation has to be matched by existing collateral instead the current trend towards collateralised lending just like the one which gripped markets post the great depression ensures that for every working loan the reason equivalent collateral base already in existence debt continues it just becomes collateralised until once again we discover how to price it effectively they going to safety of collateral until they can work out the real value of things and yes this is what we do appreciate that the real value of things is probably a problem and the rest of the article goes on and then the comment section is of magnitude bigger than any other comment section of ever seen in a non-Ã blog and I spent an hour reading it and does is still a long way to go but I’ll give you a couple of examples from the comment section just to expand a bit Landrieu says there is a fundamental flaw in Dyson’s worldview that this blog does not point out he says it common knowledge that printing your own £10 notes at home is frowned upon by her Majesty’s police yet there is a small collection of companies that are authorised to create and spend more new money then counterfeiters have ever been able to print I quoted that the beginning of the Dyson article okay this is Andrew is now the implication is that the bank is able to create money that then belongs to the bank that the bank can spend as it pleases this is not the case money in this cake case bank deposit is created when a bank and a private party agree to a loan arrangement this money in no way represents money owned by the bank the private party owns the money and owes a debt in return the bank owns the loan to be repaid and owes the deposit amount to the private party been through this balance system balance sheet system 70 times what the bank Eurozone is the interest stream of flop flowing from below minus the interest dreams on the deposit this deposit is generally transferred to other parties are the same bank or indifferent banks e.g. when purchasing a house alone goes into the depositors account and then is paid out to the vendor of the house further to this bank cannot just create money if it can’t come to convince a private party to take out a loan therefore it is the confluence of the action by the bank with an action by another private party to create the money not unilateral action by the bank now been lots of brilliant comments and that’s not a brilliant comment but it does help to push the idea that it’s not thanks banks banks it banks banks plus a population goes into banks and gets loans and you can say once the banks that have done clever advertising to get the mean to get the loans but never forget that whole idea of clever advertising to get the people in to get the loans it to party thing this bank loan thing and all this banks banks banks they can’t create the money without you and me they just can’t do it and it and as the pound comment says even when they do it not their money it’s your money or some of the else’s money they get the interest from it which they can make a good working living from that all right isn’t comes in and finish with this in the end she replies many times in the higher comment section and the comment section not strangely enough because its people struggling to understand money and how the whole system can be improved much of the comment section is dedicated to MMT to reply to as many points as possible yes it was definitely a rant admits is it and it was written immediately after reading aforementioned Guardian piece in that style since something about it made my skin crawl honesty she just was revolted by the whole article so just let it rip but it has been good because we got all these people talking about the money system regarding lack of credentials as stated alphabet of villages allay blog and I’m a self don’t have an economic Stig really that is not the problem as also stated people taking in interest in these operations are to be commended having no credentials has never been the problem the problem is when people with the lack of credentials resolutely dismiss everyone else’s credentials but I have no create ensures but I appreciate that other people who do and might therefore have some insight that I don’t even Alea that’s just too Alea Alea gave this on a user blogger Kevin absolute ripping yesterday as well forgetting something completely wrong but she appreciates being told where she is wrong so she can learn I would prefer to learn from them rather than to dismiss them as idiots the whole economists didn’t see the crisis coming is a moot went I encountered many economists and analysts to did see it coming I myself was constantly warning about was what was likely to happen as far back as 2006 and I got that view from reading other people’s work especially Duncans dollar crisis the problem is that some of those warning voices were marginalised by certain hysteria that ran across the mainstream the vast majority of perfectly sane fund managers advisers and pension managers preferred not to listen to reason the fault was not so much with the economic analyst profession but with our own human nature it’s very hard to take criticism let alone admit you have invested your money incorrectly and hopefully that even what her comment goes on and I haven’t been able to do it justice by just taking that I believe if I’m doing anything here I’m trying to get it hard when a prison is duct tape to get taped to you head to rip it off but that’s what I urge everyone to do because it’s the only way to learn and it’s not important that we know things now if anything is important it’s important that we are learning now and later we might be able to give a better balanced view on things but we will not be able to if we keep the prisms take to our heads don’t be like Peter Schiff immediate like that just start edging the gaff tape off get rid of those prisons and start learning I think most of people there on over the peak are that why they’re here the solution get other people to do it as well they might do some good by