Cyprus-Forum.com

[Robin Hood]

Its the central bank that has jurisdiction over the amount of notes and coins in circulation.

You clearly have limited idea about how this works. Just stop pretending you know something because you read a couple of books.

Now go back to the drawing board before posting silly solutions that will only work within the realms of the imagination.

You insult my knowledge on the subject and display your own ignorance. I have spent over 20 years finding out all about the creation of money and the banking system ........... and LR will confirm that!

Maybe 10-12 years ago i gave a little talk to a group of about 20 old farts like me at a lunch we all went to in Pissouri. The 'lecture' was supposedly a ritual made by new members .... so I complied. The idea of banks creating money was laughed at and they were insistant that banks lent depositors money, which was why the banks charged and paid interest. LR was there .... he will confirm that and the reaction because as I remember he was of the same opinion as the 'majority'. I wonder if he has changed his mind since then in the light of more updated information that is so readily available ..... even from the Bank of England?

I suggest you listen to Paphitis he is more on your level of perception regarding Banking and currency creation. I won't waste any more of my time trying to educate you in what is a very complex subject!

[Londonrake]

Its the central bank that has jurisdiction over the amount of notes and coins in circulation.

You clearly have limited idea about how this works. Just stop pretending you know something because you read a couple of books.

Now go back to the drawing board before posting silly solutions that will only work within the realms of the imagination.
You insult my knowledge on the subject and display your own ignorance. I have spent over 20 years finding out all about the creation of money and the banking system ........... and LR will confirm that!

Maybe 10-12 years ago i gave a little talk to a group of about 20 old farts like me at a lunch we all went to in Pissouri. The 'lecture' was supposedly a ritual made by new members .... so I complied. The idea of banks creating money was laughed at and they were insistant that banks lent depositors money, which was why the banks charged and paid interest. LR was there .... he will confirm that and the reaction because as I remember he was of the same opinion as the 'majority'. I wonder if he has changed his mind since then in the light of more updated information that is so readily available ..... even from the Bank of England?

Absolutely. Although I think the expression "old farts" is unkind. FWIW, you were one of the oldest. In fact there was a vast range of experienced people around the table, including one who had spent his life as a Project Manager on major petrochemical developments around the world. One of your kind. Who knows, he could even have been your Boss once.

TBH, I don't recall anybody laughing at you. Some of the talks were quite dire but all tended to be received with patience and politeness. The general effect of yours IIRC was one of benign interest. That's how most of the "initiates" chats tended to go down. I do recall one particular member - a Yorkshireman (renowned for their stubborn awkwardness in my experience) expressing a penetrating view. That was about it. Also, I don't recollect expressing any personal opinion on the occasion.

What I will say is. One of the members was a man who, as a 15 year old, started work as a "runner" for a bank in the City of London. Over the following 50 years he rose to become one of the most senior execs in the Halifax. In fact a key man in their conversion to a bank. When he expressed the belief that much of what you said about money creation wasn't really correct you said - as a man who has never set foot in any bank other than as a customer - that he didn't understand as much about the world of finance as yourself. Add that to your contemptuous views regarding some of Paphitis's - a current civilian commercial pilot - posts on flying, based upon your decades ago PPL experience and I would ask - is it really me that's arrogant?.

Remember. You asked for this.

[cyprusgrump]

Sigh...


Deposits still fund loans even if we take everything else RH says as being true. Because, by 4.30 each day, a bank must find a deposit that funds whatever loans it has made. That it couldn’t is what made Northern Rock bust, they couldn’t borrow – ie, create deposits – through the interbank system. They were able to issue mortgages, they did issue mortgages, that didn’t create the deposits and therefore they had to attract deposits from elsewhere to fund those loans. Which they couldn’t – they were bust.

If Banks really could create money they would never go bust, there would never be a 'run' on a bank that couldn't pay its depositors back.

[Londonrake]

Sigh...


Deposits still fund loans even if we take everything else RH says as being true. Because, by 4.30 each day, a bank must find a deposit that funds whatever loans it has made. That it couldn’t is what made Northern Rock bust, they couldn’t borrow – ie, create deposits – through the interbank system. They were able to issue mortgages, they did issue mortgages, that didn’t create the deposits and therefore they had to attract deposits from elsewhere to fund those loans. Which they couldn’t – they were bust.

If Banks really could create money they would never go bust, there would never be a 'run' on a bank that couldn't pay its depositors back.

HEY!!!! The return of CG ..................................... and his bucket!

[Paphitis]

Sigh...


Deposits still fund loans even if we take everything else RH says as being true. Because, by 4.30 each day, a bank must find a deposit that funds whatever loans it has made. That it couldn’t is what made Northern Rock bust, they couldn’t borrow – ie, create deposits – through the interbank system. They were able to issue mortgages, they did issue mortgages, that didn’t create the deposits and therefore they had to attract deposits from elsewhere to fund those loans. Which they couldn’t – they were bust.

If Banks really could create money they would never go bust, there would never be a 'run' on a bank that couldn't pay its depositors back.

Oh what a pleasant surprise.

Welcome back.

RH keeps on harpin on about the Banks being able to create money but its not actually them, but the Central Banks which control money creation and who sell it wholesale to the Banks which then retail it to the public and business at a slightly higher interest rate to cover their business running costs and post a profit for their shareholders ultimately.

as we all know, the Cenral Banks control the supply by setting the cost of this money with the interest rate they set. When they increase rates, the want to reduce the supply of money. When they decrease interests rates, they are increasing the supply of money etc.

I'm no expert but what RH is saying is total nonsense.

[Robin Hood]

RH keeps on harpin on about the Banks being able to create money but its not actually them, but the Central Banks which control money creation and who sell it wholesale to the Banks which then retail it to the public and business at a slightly higher interest rate to cover their business running costs and post a profit for their shareholders ultimately.

as we all know, the Cenral Banks control the supply by setting the cost of this money with the interest rate they set. When they increase rates, the want to reduce the supply of money. When they decrease interests rates, they are increasing the supply of money etc.

I'm no expert but what RH is saying is total nonsense.

Your mouth may be considerably larger than average, and your unbridled self opinion obviously knows no bounds, but unlike you these people are banking professionals and know what they are talking about.

So enlighten me, what is the source of your typical know nothing brain fart? Following is the Bank of England’s OFFICIAL view on the subject ..... a source which is a very reliable and credible for information regarding money creation.

Money creation in the modern economy - By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s (BoE) Monetary Analysis Directorate

Footnote, quote .........

This article has discussed how money is created in the modern economy. Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers. And in contrast to descriptions found in some textbooks, the Bank of England does not directly control the quantity of either base or broad money. The Bank of England is nevertheless still able to influence the amount of money in the economy. It does so in normal times by setting monetary policy — through the interest rate that it pays on RESERVES (i.e. Liabilities = your deposits) held by commercial banks with the Bank of England. More recently, though, with Bank Rate constrained by the effective lower bound, the Bank of England’s asset purchase programme has sought to raise the quantity of broad money in circulation. This in turn affects the prices and quantities of a range of assets in the economy, including money. My emphasis.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

[Paphitis]

RH keeps on harpin on about the Banks being able to create money but its not actually them, but the Central Banks which control money creation and who sell it wholesale to the Banks which then retail it to the public and business at a slightly higher interest rate to cover their business running costs and post a profit for their shareholders ultimately.

as we all know, the Cenral Banks control the supply by setting the cost of this money with the interest rate they set. When they increase rates, the want to reduce the supply of money. When they decrease interests rates, they are increasing the supply of money etc.

I'm no expert but what RH is saying is total nonsense.

Your mouth may be considerably larger than average, and your unbridled self opinion obviously knows no bounds, but unlike you these people are banking professionals and know what they are talking about.

So enlighten me, what is the source of your typical know nothing brain fart? Following is the Bank of England’s OFFICIAL view on the subject ..... a source which is a very reliable and credible for information regarding money creation.

Money creation in the modern economy - By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s (BoE) Monetary Analysis Directorate

Footnote, quote .........

This article has discussed how money is created in the modern economy. Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers. And in contrast to descriptions found in some textbooks, the Bank of England does not directly control the quantity of either base or broad money. The Bank of England is nevertheless still able to influence the amount of money in the economy. It does so in normal times by setting monetary policy — through the interest rate that it pays on RESERVES (i.e. Liabilities = your deposits) held by commercial banks with the Bank of England. More recently, though, with Bank Rate constrained by the effective lower bound, the Bank of England’s asset purchase programme has sought to raise the quantity of broad money in circulation. This in turn affects the prices and quantities of a range of assets in the economy, including money. My emphasis.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

The whole world is rejoicing because justice is being served on a platter to defeat this evil that you support.

Youb are a very bent and sad purson. One wonders how you can even sleep at night or live with yourself.

For 14 months you have been egging on an illegal invasion and supporting the murder of hundreds of thousands of Ukrainians in their own homeland.

heppy recolution and coup day old chum! there has never been a sweeter coup in living memory.

[Maximus]

Its the central bank that has jurisdiction over the amount of notes and coins in circulation.

You clearly have limited idea about how this works. Just stop pretending you know something because you read a couple of books.

Now go back to the drawing board before posting silly solutions that will only work within the realms of the imagination.

You insult my knowledge on the subject and display your own ignorance. I have spent over 20 years finding out all about the creation of money and the banking system ........... and LR will confirm that!

Maybe 10-12 years ago i gave a little talk to a group of about 20 old farts like me at a lunch we all went to in Pissouri. The 'lecture' was supposedly a ritual made by new members .... so I complied. The idea of banks creating money was laughed at and they were insistant that banks lent depositors money, which was why the banks charged and paid interest. LR was there .... he will confirm that and the reaction because as I remember he was of the same opinion as the 'majority'. I wonder if he has changed his mind since then in the light of more updated information that is so readily available ..... even from the Bank of England?

I suggest you listen to Paphitis he is more on your level of perception regarding Banking and currency creation. I won't waste any more of my time trying to educate you in what is a very complex subject!

My intention in joining this discussion was to explain to you why your solution to solve the mortgage and inflation problem will not work. You did ask!

As someone claiming to be knowledgeable about the subject of banking and money, I am surprised how you had to ask how the inflation is created in your "solution" and with statements like;

The BoE does not create ''money' that goes into circulation, only private banks do that and do so from your local Branch right through to Head Office. Every bank has a hypothetical money tree growing in the back yard!

You brought your knowledge in to question

[Maximus]

So enlighten me, what is the source of your typical know nothing brain fart? Following is the Bank of England’s OFFICIAL view on the subject ..... a source which is a very reliable and credible for information regarding money creation.

Money creation in the modern economy - By Michael McLeay, Amar Radia and Ryland Thomas of the Bank’s (BoE) Monetary Analysis Directorate

Footnote, quote .........

This article has discussed how money is created in the modern economy. Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers. And in contrast to descriptions found in some textbooks, the Bank of England does not directly control the quantity of either base or broad money. The Bank of England is nevertheless still able to influence the amount of money in the economy. It does so in normal times by setting monetary policy — through the interest rate that it pays on RESERVES (i.e. Liabilities = your deposits) held by commercial banks with the Bank of England. More recently, though, with Bank Rate constrained by the effective lower bound, the Bank of England’s asset purchase programme has sought to raise the quantity of broad money in circulation. This in turn affects the prices and quantities of a range of assets in the economy, including money. My emphasis.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

Can banks create as much money as they like?

No, they can’t.

Regulation limits how much money banks can create. For example, they have to hold a certain amount of financial resources, called capital, in case people default on their loans. These limits have become stricter since the financial crisis.

Banks also risk going bust if they lend out money left, right and centre. For instance, people borrowing money will probably spend it. If they make payments to people who have accounts at other banks, their bank will need to transfer the money to that other bank by sending it some of its electronic central bank money. So if one bank lends out too much money, at some point it will not have enough electronic money in its account with us to pay the other banks.

https://www.bankofengland.co.uk/explain ... ey-created

You need money to make money!

[Lordo]

What about inflation. We have now had 13 months of increases to interest rates and Inflation still remain high and core inflation is increasing and higher than our competitors. So clearly interest rate hikes are not having an effect. What can be done about Inflation. The government seems to be helpless and leave it all to the Bank of Swines or supposed future growth will has not been more than 2% a year for decades.

So what is the solution?