Jock's Place - The biggest frauds go unpunished - and we are all victims - Comments

PS - I think we are actually

Jock — Tue, 10 Jul 2007 10:46:48 +0000

PS - I think we are actually movnig towards that free market system of money. It won't all be green and crinkly. But trust based credits in things like internet swapping/auctioning systems are the thin edge of what could be a very interesting wedge.

...and presumably could

Jock — Tue, 10 Jul 2007 10:43:00 +0000

...and presumably could insure privately against it as happens the other way now - we are pretty well forced to take insurance out on loans for the bank's benefit.

Anyhow, the point of the two videos was that in my opinion, it is far more important to realize there is a problem (which both say is never discussed, which is true) that necessarily for any one individual or group to have the perfect solution. However, I'd suggest that all the proposed solutions are better than the current system, which is organized fraud on the grandest of scales.

Second video

Tristan Mills — Tue, 10 Jul 2007 10:33:38 +0000

Again, good on the principles.
I prefer their solution, it leaves government out of the equation to a much greater extent.

The first video's objection to a gold standard doesn't hold as far as I can tell - why would all the gold end up in the hands of a few? They'd have to pay for services and goods which would have to be done in gold or goods.

I think I'd favour a free market system of money - no legal tender beyond gold with banks issuing notes or electronic money to represent the gold they hold for their customers.
In your contract with the bank it should say whether fractional reserve is allowed or not, then you can decide for yourself whether to trust the bank.
No lender of last resort - if a bank goes bust it goes bust and savings will be lost, but you go into it knowing that's a risk.

Oh...sorry...on the

Jock — Tue, 10 Jul 2007 10:04:14 +0000

Oh...sorry...on the sustainable issue. They are right. It is artificial and unsustainable to have to grow merely in order to fulfill the additional requirements (interest) of the mechanism for creating the medium of exchange in the first place. That's not to say that growth is bad for distributing wealth. But what use is it when it distributes wealth from the productive to the parasitical bits of the economy?

...which of course is the

Jock — Tue, 10 Jul 2007 09:52:54 +0000

...which of course is the message of the other one from Mises Institute!

I have to say that is not the usual solution, even from the "left" of the monetary reform spectrum - having politicians fighting over how much to create and when to win elections. Most solutions suggest an independent agency doing the economic sums and creating money not on "demand" from the government of the day but the financial markets. Which, other than the mechanics of it, we already have today with the MPC at the Bank of England. And they seem pretty much trusted.

On the Mises one, they call for absolutely hard money. Me, I'm torn. Actually I think Hayek had the right idea privatizing currencies and letting people choose. But I suspect that he may have been too optimistic about peoples' financial understanding and thus open to fraud - but I'm sure they'd soon learn! And it doesn't stop some people presently trusting their money to the oddest of people!

As to the anti-semitic stuff. I'm sorry that Meyer Amstel happenes to have been Jewish. But I think he's the only Jewish banker mentioned in either film - certainly the Mises one holds most ire for J P Morgan and J D Rockefeller. Rothschild did, however, make that most astonishing claim about not caring who makes a country's laws if he has control of the currency. Are people not to quote him just because as well as being a banker, whom as a group we are blaming for the debt money system, because of all of them he happens to be Jewish?

1930s Germany was wrong - they conflated race with profession. It IS the bankers who have inherited the earth and suck it dry, not any one nationality or race of banker.

The first video

Tristan Mills — Tue, 10 Jul 2007 09:16:03 +0000

Good until they start talking about a 'sustainable economy'. They make the assumption (which I believe to be false) that you cannot have sustainability with growth and that things like population must remain static.

They then propose solving it by giving government sole control over money, something which is sure to lead to disaster as politics comes into play. Politicians are the least qualified to decide how to spend money.

Finally, the conspiracy theory hinted at is only one step away from anti-semitic myths about banking...

I am always amazed that people identify government as part of the problem (protecting banks from runs etc) but then propose that government is the solution. Perhaps they mean government by themselves is the solution...

The biggest frauds go unpunished - and we are all victims

Jock — Tue, 10 Jul 2007 02:39:28 +0000

It's 47 minutes long, but one of the most important lessons you will ever learn, IMHO (NB - some good quotes in this from our Liberal forebears Reginald McKenna, Josiah Stamp, McKenzie King - all feature in our "pantheon" of Liberal economists):

And, lest you believe all this to be the province of eco-socialists, this one from the Mises Institute, in tribute to Murray Rothbard's work on money, attributing the same causes to inflation but advocating a completely different solution:

And now read how the modern central banker does it...he doesn't even bother to turn the printing presses, he makes us pay for his monetary expansion policies:

Ex-Governor George says Bank deliberately fuelled consumer boom

By Jane Padgham

Published: 21 March 2007

The Bank of England deliberately stoked the consumer boom that has led to record house prices and personal debt in order to avert a recession, the former Bank Governor Eddie George admitted yesterday.

Lord George said he and his colleagues on the Monetary Policy Committee "did not have much of a choice" as they battled to prevent the UK being dragged into a worldwide economic slump by slashing interest rates. And he said his legacy to the current MPC was to "sort out" the problems he had caused.

Lord George, who headed the Bank for a decade from 1993, revealed to MPs on the Treasury Select Committee that he knew the approach was not sustainable. "In the environment of global economic weakness at the beginning of this decade... external demand was declining and related to that, business investment was declining," he said. "We only had two alternative ways of sustaining demand and keeping the economy moving forward - one was public spending and the other was consumption.

"We knew that we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term. But for the time being, if we had not done that, the UK economy would have gone into recession just as the United States did."

He said he was "very conscious" that stimulating consumer demand could give rise to problems in the future. "My legacy to the MPC, if you like, has been 'sort that out'," he said. Under Lord George's governorship, rates were slashed from 6 per cent in 2001 to 3.5 per cent in 2003, pushing house price inflation above 25 per cent and high street spending growth to its highest since the late-Eighties boom.

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