why cant we just print some more money?

SunderlandBlackCat

thepinkladez wrote: »

thanks for this thread, interesting reading! i too have absolutly no concept of inflation etc so this is all very interesting. Why dont they teach this type of thing at school!?(probably do in business class!)

It was covered in both O Level Maths & Economics classes when I was at school

spf_2

Maybe this link will help those interested to understand this fiat money system and why the banks cannot be allowed to collapse etc etc?

http://www.eco-tube.com/v/KNOW/Money_Is_Debt.aspx

just play the video, it's a bit long so grab a beer.....

1694

spf wrote: »

Maybe this link will help those interested to understand this fiat money system and why the banks cannot be allowed to collapse etc etc?

http://www.eco-tube.com/v/KNOW/Money_Is_Debt.aspx

just play the video, it's a bit long so grab a beer.....

I'm not sure why you think the banks shouldn't be allowed to collapse. AS you know from watching the video the whole system is destined to collapse!

It needs to be replaced. This is how:

The treasury rather than borrow itself into more debt why doesn't it:

Offer a 100% secure govt savings account that offers low interest interest BUT has a double platinum titanium guarantee on it, the panicky public will love this more than the low interest deters them.

By ignoring EU competition laws they can use the already nationalised Northern Rock as the vehicle for this.

Use the new savers money as a deposit and then fractional reserve it to 9 times this amount.

Lend the fractional reserve money to the commercial banks to free up their liquidity.

Charge the commercial banks interest at a higher rate than offered to savers. (does it need to do this, as the fractional reserve money is free and 9 times as abundant, could it lend the money cheaply and still make a profit?)

Use the interest to pay off the National debt


And save the nation!!!!


The protection limit for commercial banks should gradually be lowered and that of NR gradually increased to allow a steady trickle rather than a flood of those transfering.

Most would transfer there money digitally, The treausry/NR could stipulate it must be electronic. The banks would therefore not face a hard cash run and could continue to limp along with there own operations for businesses etc.

The faster payments system exists and could be used to transfer money from commercial banks to NR instantly.

No banks crash, savings are safe, the treasury is in control.

Then make arrangements for the commercial banks to be wound up over time. Reduce there fractional reserce ratios till it is one2one etc.

From then on all commercial banks are illegal, one publicy owned state bank is all that remains. All profits from the activity of banking are spent by the government on public services.

stacy

search for zeitgeist on utube it tells you all about how banks started ect and how theyre in debt from the start because every note printed they owe money on which is why they cant just print off loads more and about the wars ect ect its very interesting there are lots of them so i think just watch the first one.

spf_2

1694 wrote: »

I'm not sure why you think the banks shouldn't be allowed to collapse. AS you know from watching the video the whole system is destined to collapse

I personally agree with you 100%, unfortunately there is too much self interest from the decision makers. Had the various governments not plied billions back into the system this week I would have believed that the system you describe could become a reality, but they did...... Maybe next time around...........

ZTD

pam_smith wrote: »

Why cant the bank of england just print some more money if they run short?
Pam

They have been. They are doing. They will do even more.

Increase in the money supply had been running at 10%+ for a few years now.

And where do you think this £200,000,000,000 bailout is going to come from.

ZTD

ad9898 wrote: »

Of course if you have any kind of debt, then inflation isn't too bad for you, its just bad for everyone else.

Inflation wipes out debts and punishes those with none. So unless it is going to stop at the very instant your debts become worthless, it's going to hammer you too.

Debtor or creditor, people in Zimbabwe are starving.

Ames

The only reason I vaguely understand it all is because I've got an a level in Economics. I wouldn't have been able to explain it half as well as the people in this thread have though!

ZTD

1694 wrote: »

I'm not sure why you think the banks shouldn't be allowed to collapse. AS you know from watching the video the whole system is destined to collapse!

It needs to be replaced. This is how:

The treasury rather than borrow itself into more debt why doesn't it:

Offer a 100% secure govt savings account that offers low interest interest BUT has a double platinum titanium guarantee on it, the panicky public will love this more than the low interest deters them.

By ignoring EU competition laws they can use the already nationalised Northern Rock as the vehicle for this.

Use the new savers money as a deposit and then fractional reserve it to 9 times this amount.

Lend the fractional reserve money to the commercial banks to free up their liquidity.

Charge the commercial banks interest at a higher rate than offered to savers. (does it need to do this, as the fractional reserve money is free and 9 times as abundant, could it lend the money cheaply and still make a profit?)

Use the interest to pay off the National debt


And save the nation!!!!


The protection limit for commercial banks should gradually be lowered and that of NR gradually increased to allow a steady trickle rather than a flood of those transfering.

Most would transfer there money digitally, The treausry/NR could stipulate it must be electronic. The banks would therefore not face a hard cash run and could continue to limp along with there own operations for businesses etc.

The faster payments system exists and could be used to transfer money from commercial banks to NR instantly.

No banks crash, savings are safe, the treasury is in control.

Then make arrangements for the commercial banks to be wound up over time. Reduce there fractional reserce ratios till it is one2one etc.

From then on all commercial banks are illegal, one publicy owned state bank is all that remains. All profits from the activity of banking are spent by the government on public services.

This won't save anything. The bad debt needs to be liquidated. Either you get it over as one sharp shock, or you drag it out. Rather like having a leg amputated without anesthetic, I'd rather it took a couple of minutes than a couple of hours.

Most people by their nature will do anything to avoid having to do things the hard way. Alas, all that will happen is that they will suffer the pain of having looked for and paid for bail-outs - and still have to do it the hard way.

Soubrette

The actual reason that money and the price are goods are directly related is that the amount of goods and services available is a limited (or finite) resource, in our market economy it is money that is used to allocate that resource ie the more money you have, the more goods and services you can buy.

So if the government prints more money then there is more of the means of allocation but there is still the same amount of goods and services (the resource), sellers will therefore be able to charge more than they did previously because we will be willing to pay more for the goods and services to ensure that they are available to us (rather than another consumer).

Clear as mud

Sou