tag:blogger.com,1999:blog-2098432983500045934.post1389868124080428754..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: "Growth Phase" growthThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-2098432983500045934.post-88490294883061539092017-03-08T03:59:57.907-05:002017-03-08T03:59:57.907-05:00Thanks for that.Thanks for that.Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-32808076598064912792017-03-07T10:04:10.621-05:002017-03-07T10:04:10.621-05:00Here is Werner:
"This explains why banks are ...Here is Werner:<br />"This explains why banks are special: They are not (just) financial intermediaries. They have a license to ‘print money’ by creating credit. There is no such thing as a ‘bank loan’. Banks do not lend money, they create money."<br /><br />This isn't really accurate. At least not at all times. <br />During the housing bubble private investors financed more than $10 trillion in US mortgages through Mortgage Backed Securities. In other words, no deposits were created by these loans but securities were created instead. <br /><br />In 2006 those securities were regarded to be as good as cash. They were universally being used for cash transactions. Even by mid 2008 the securities were still being called "money good" and were usually<br />accepted as money, but by the end or 2008 nobody would accept them as<br />money. What this means is that in a very short amount of time a huge<br />chunk of money disappeared from the economy. The chunk of money that evaporated was larger than the chunk of money that banks had created (bank deposits) by making bank loans. <br /><br />To paraphrase Minsky anybody can create money - getting others to accept it as money is the trick. <br /><br />Commercial banks really aren't special in terms of the ability to create money. They are special in times of crises when other forms of money are not being accepted. And that is probably the Fed's only real job - to make sure that the chunk of money that bank's create doesn't disappear in times of crises. The Great Depression was so bad because the Fed failed to do its job.jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-3040444387295877272017-03-07T03:46:06.978-05:002017-03-07T03:46:06.978-05:00"The big problem I have with Werner is he act..."The big problem I have with Werner is he acts as if all debt is bank loans."<br /><br />I don't think so. It is the creation of net new money by the banking sector that 'drives' the economy?Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-86042193277954392642017-03-06T22:10:28.631-05:002017-03-06T22:10:28.631-05:00"You make it sound as if the whole of monetar..."You make it sound as if the whole of monetary policy is a hoax."<br /><br />A hoax by whom?<br /><br />When I listen to Fed statements I hear them mostly saying they are reacting to economic conditions. I don't think what the Fed is doing is a hoax, but what some others say the Fed is doing is definitely a hoax. <br /><br />The big problem I have with Werner is he acts as if all debt is bank loans. Bank loans are only 13% of total US debt. If it was closer to 100% Werner's theories would probably be valid. But you can't just pretend the world is something it isn't.jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-53724987301432136632017-03-06T16:50:57.234-05:002017-03-06T16:50:57.234-05:00Hello,
This is his latest interview.
“For many y...Hello,<br /><br />This is his latest interview.<br /><br />“For many years, we’ve been told that finance is good and more finance is better. But it doesn’t seem everyone in the UK is sharing the benefits. On this program, we ask a very simple question – can a country suffer from a finance curse?<br />Host Ross Ashcroft is joined by City veteran David Buik and the man who coined the term Quantitative Easing, International Banking and Finance Professor Richard Werner.”<br />https://www.rt.com/shows/renegade-inc/379579-uk-finance-curse-suffer/#.WL23u0Kzmeg.twitter<br /><br />Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-77487667651399199682017-03-06T15:43:15.619-05:002017-03-06T15:43:15.619-05:00Thanks Postkey. I did some searching myself and fo...Thanks Postkey. I did some searching myself and found a PDF where Werner takes the standard equation of exchange and compares it to the Irving Fisher version and explains the difference simply and well: The standard version excludes financial transactions. Wow.<br /><br />The link has your name in it, by the way:<br />https://www.postkeynesian.net/downloads/Werner/RW301012PPT.pdf<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-10821194963338845872017-03-06T13:12:03.835-05:002017-03-06T13:12:03.835-05:00“Importantly for our disaggregated quantity equati...“Importantly for our disaggregated quantity equation, credit creation can be disaggregated, as we can obtain and analyse information about who obtains loans and what use they are put to. Sectoral loan data provide us with information about the direction of purchasing power - something deposit aggregates cannot tell us. By institutional analysis and the use of such disaggregated credit data it can be determined, at least approximately, what share of purchasing power is primarily spent on ‘real’ transactions that are part of GDP and which part is primarily used for financial transactions. Further, transactions contributing to GDP can be divided into ‘productive’ ones that have a lower risk, as they generate income streams to service them (they can thus be referred to as sustainable or productive), and those that do not increase productivity or the stock of goods and services. Data availability is dependent on central bank publication of such data. The identification of transactions that are part of GDP and those that are not is more straight-forward, simply following the NIA rules.”<br />http://eprints.soton.ac.uk/339271/1/Werner_IRFA_QTC_2012.pdfPostkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-17143135346113513892017-03-06T06:58:14.140-05:002017-03-06T06:58:14.140-05:00Interesting link, all 26.33 of it.
"... the ...Interesting link, all 26.33 of it.<br /><br />"... the correct conclusion is that the economy is driving Fed interest rates."<br /><br />You make it sound as if the whole of monetary policy is a hoax. That's a little hard to accept.<br /><br />If I listened right, Richard Werner says credit growth drives economic growth. Okay, Steve Keen says the same thing, and many other people, and me. But it seems Werner wants to just jump in and start expanding credit, with no regard for the accumulation of debt and no regard for the cost of that accumulation. Maybe that's because of the questions that were asked, but something is definitely lacking in that discussion.<br /><br />Thanks for the link. Maybe I'll listen to it again.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-51964042272755522372017-03-05T09:24:03.353-05:002017-03-05T09:24:03.353-05:00"Growth definitely slowed when the interest r..."Growth definitely slowed when the interest rate went up. Growth slowed because the interest rate went up."<br /><br />I can't understand how you can look at that graph and make such a statement. It seems pretty obvious to me that Fed interest rates are lagging behind GDP which suggests the correct conclusion is that the economy is driving Fed interest rates. <br /><br />Richard Werner explains:<br />https://www.youtube.com/watch?v=6pU3tw5let4jimnoreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-83693999537742909702017-03-05T07:27:43.064-05:002017-03-05T07:27:43.064-05:00ps: The VBA code is NOT fancy. I didn't even u...ps: The VBA code is NOT fancy. I didn't even use range names in the code. I actually wrote cell and cell range addresses into the code, an embarrassingly bad practice. It works, but it ain't pretty.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com