Comments on: Simple banking – ignore base rates http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Thu, 09 Feb 2012 20:05:58 +0000 hourly 1 By: Josh http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15315 Josh Sat, 02 May 2009 20:37:47 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15315 Freddy, if you want to know about the merits of a free banking system that is not controlled by a central bank, please read this from the Mises Institute http://mises.org/journals/qjae/pdf/qjae10_2_3.pdf It's about Sweden Freddy, if you want to know about the merits of a free banking system that is not controlled by a central bank, please read this from the Mises Institute

http://mises.org/journals/qjae/pdf/qjae10_2_3.pdf

It’s about Sweden

]]> By: Paul http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15314 Paul Sat, 02 May 2009 10:13:11 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15314 Matt, It really is very very simple. In a free capitalist system the rates are set by the market ( ie the customers ) on a supply and demand basis. In our current system our rates are set by political interference to artificially make the economy grow. Yes a lot of greedy bankers took advantage of the access to "cheap money" as did you if you have a mortgage or other loans. For those that go on about more financial regulation you only have to implement the existing rules. The RBS take over of ABN Ambro is a case in point. This broke virtually every rule in the book but it was allowed to go ahead by the Secretary of State for Business ( a politician remember). When Clinton ( a liberal politician ) repealled the Glass-Stegal act in 1999, that was the signal for Wall St. to go overboard on cheap money. Stop blaming capitalism for all ills until we actually have a capitalist system and can see if it works or not. Matt,

It really is very very simple. In a free capitalist system the rates are set by the market ( ie the customers ) on a supply and demand basis.

In our current system our rates are set by political interference to artificially make the economy grow. Yes a lot of greedy bankers took advantage of the access to “cheap money” as did you if you have a mortgage or other loans. For those that go on about more financial regulation you only have to implement the existing rules. The RBS take over of ABN Ambro is a case in point. This broke virtually every rule in the book but it was allowed to go ahead by the Secretary of State for Business ( a politician remember).

When Clinton ( a liberal politician ) repealled the Glass-Stegal act in 1999, that was the signal for Wall St. to go overboard on cheap money.

Stop blaming capitalism for all ills until we actually have a capitalist system and can see if it works or not.

]]> By: adam http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15313 adam Sat, 02 May 2009 08:51:13 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15313 I agree with the general desire to make some changes to the financial system. We cannot have a situation where every time there is a recession the government has to put huge sums of money at risk to stop the worlds banking system collapsing in a chain reaction. I agree with the general desire to make some changes to the financial system.
We cannot have a situation where every time there is a recession the government has to put huge sums of money at risk to stop the worlds banking system collapsing in a chain reaction.

]]> By: Bazman http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15312 Bazman Fri, 01 May 2009 21:14:37 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15312 Credit card companies lending money at 30% plus interest rates and talking it up, with base rates the lowest ever. Says it all. Credit card companies lending money at 30% plus interest rates and talking it up, with base rates the lowest ever. Says it all.

]]> By: Adrian Peirson http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15311 Adrian Peirson Fri, 01 May 2009 17:21:08 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15311 It's good to see that others can see what is going on behind the scenes. Everything going on is about control of the masses by the Elites, control of the supply and value of 'money' Ultimately leading to a completely ficticious money supply called electronic money where we will work for the elites for Credits. Step out of line and your Credits will be switched off, this is why they want a cashless society, if you walk around with gold coins in your pocket, they cannot stop you buying your groceries. this is why we are increasingly prohibited from hunting, this is why the foot and mouth outbreak was eventually ttaced back to a Govt Lab, they want to destroy the Little Farmer who has independance ( didn't the soviet's also kill off all their small independant farmers ) 2000 Dairy Farmers have gone under in the Past 4 yrs. Now with this Overhyped Swine flu, are they goingt to start killing of Pig farming too. I note despite the fact that they have put us on level 5, the Borders are WIDE open still. They want this disease to spread. This is why they have destroyed our fishing, the globalists intention is to have us entrapped, so we must buy from Tesco, this is why new houses are built with no working fireplaces, the Globalists do not want you to be able to burn Wood on your fire. this is why they are cuting off rural bus services, they want us Herded into cities so we can be Farmed and fleeced. This is why in order to fish, you now need a Rod Licence, why we are increasingly prohited from Hunting. It is all about control, Control of access to Food, fuel and the 'Money' to be able to buy those commodoties in order to survive. CONTROL CONTROL CONTROL. This is why the govt and the Bankers like fiat and electronic money and NOT Gold. I wont post the link Because it's a long vid and Mr Redwood will not have time to review it all but I can recommend Endgame by Alex Jones or the Obama Decepetion again by Alex Jones, or the Creature from Jekyl Island ( the Creature being the PRIVATE Federal reserve Created by the Equally PRIVATE Bank of england on Jekyl Island in Secret in 1913. All available on Google video. It’s good to see that others can see what is going on behind the scenes.
Everything going on is about control of the masses by the Elites, control of the supply and value of ‘money’
Ultimately leading to a completely ficticious money supply called electronic money where we will work for the elites for Credits.
Step out of line and your Credits will be switched off, this is why they want a cashless society, if you walk around with gold coins in your pocket, they cannot stop you buying your groceries.
this is why we are increasingly prohibited from hunting, this is why the foot and mouth outbreak was eventually ttaced back to a Govt Lab, they want to destroy the Little Farmer who has independance ( didn’t the soviet’s also kill off all their small independant farmers )
2000 Dairy Farmers have gone under in the Past 4 yrs.
Now with this Overhyped Swine flu, are they goingt to start killing of Pig farming too.
I note despite the fact that they have put us on level 5, the Borders are WIDE open still.
They want this disease to spread.
This is why they have destroyed our fishing, the globalists intention is to have us entrapped, so we must buy from Tesco, this is why new houses are built with no working fireplaces, the Globalists do not want you to be able to burn Wood on your fire.
this is why they are cuting off rural bus services, they want us Herded into cities so we can be Farmed and fleeced.

This is why in order to fish, you now need a Rod Licence, why we are increasingly prohited from Hunting.
It is all about control, Control of access to Food, fuel and the ‘Money’ to be able to buy those commodoties in order to survive.
CONTROL CONTROL CONTROL.
This is why the govt and the Bankers like fiat and electronic money and NOT Gold.

I wont post the link Because it’s a long vid and Mr Redwood will not have time to review it all but I can recommend Endgame by Alex Jones
or the Obama Decepetion again by Alex Jones,
or the Creature from Jekyl Island ( the Creature being the PRIVATE Federal reserve Created by the Equally PRIVATE Bank of england on Jekyl Island in Secret in 1913.

All available on Google video.

]]> By: Waramess http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15310 Waramess Fri, 01 May 2009 13:36:47 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15310 You're right and the lend lease scheme operates to the exclusive advantage of the dealers specifically because the Fed sees the fiat currency as the ultimate stealth tax raiser and a flight to gold would end it all. The USA in particular can issue vast amounts of paper and because the countries generating an income need to put their money somewhere the dollar benefits. Not for much longer I suspect. The Chinese have already waved the flag so they are now having to think very hard whether to continue to supply goods to the USA for worthless bits of paper that they then exchange for other bits of worthless paper (treasury bills). Once the dollar is seen for what it is, rather than a good store of value then the game is up for the currency You’re right and the lend lease scheme operates to the exclusive advantage of the dealers specifically because the Fed sees the fiat currency as the ultimate stealth tax raiser and a flight to gold would end it all.

The USA in particular can issue vast amounts of paper and because the countries generating an income need to put their money somewhere the dollar benefits.

Not for much longer I suspect. The Chinese have already waved the flag so they are now having to think very hard whether to continue to supply goods to the USA for worthless bits of paper that they then exchange for other bits of worthless paper (treasury bills).

Once the dollar is seen for what it is, rather than a good store of value then the game is up for the currency

]]> By: Lola http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15309 Lola Fri, 01 May 2009 13:29:32 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15309 Seconded. And, from the current experiences of my business (financial services) and its clients, I can also categorically state that the banks are increasingly out of control, especially the nationalised ones, LloydsHBOS and RBS. Seconded. And, from the current experiences of my business (financial services) and its clients, I can also categorically state that the banks are increasingly out of control, especially the nationalised ones, LloydsHBOS and RBS.

]]> By: Lola http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15308 Lola Fri, 01 May 2009 13:26:02 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15308 Doesn't work like that. Depressions are a result of bad fiat money. Here, in the UK, the inflation has already happened. Brown has expanded the money supply by about 65% corrected for GDP since 2000. In other words the £ today is worth 35% of what it was worth in 2000. Inflation is the excess supply of the commodity we call money. Combine that with its underpricing, and - bang - you've got a credit bubble, a consequential boom, then a bust. The history of boom and bust is the history of bad fiat money run by bad politicians (usually, but not always, of the left). This exposes Brown's mendaciousness that the current crisis is a banking crisis. It isn't. It's a crisis of unsound fiat money (and catastrophic and related banking supervision errors) that has lead to a banking crisis. There are good arguments for returning to the gold standard, and unlike Mr Redwood I am not concerned that that would create windfall profits for gold miners and countries with gold fields. In lots of ways fiat money is like Faith. If we believe in it it will be. And money is power. Not the possession of it, but the control of it. This is the same as Faith. Faiths once sought to control knowledge, for reasons of power. Now secular governments seek to control money for the same reason. Personally, as I ultimately totally distrust all politicians as eventually they are all corrupted by power (no, that's unfair - enough are corrupted by power to overwhelm the good ones), I want the control of money taken away from them. And as I also don't believe in 'experts' aka the 'clever man in Whitehall' I would rather rest my faith on the wisdom of crowds, that is 'The Market'. Which is where Gold, its admirable qualities as money and its price comes in. Doesn’t work like that. Depressions are a result of bad fiat money. Here, in the UK, the inflation has already happened. Brown has expanded the money supply by about 65% corrected for GDP since 2000. In other words the £ today is worth 35% of what it was worth in 2000. Inflation is the excess supply of the commodity we call money. Combine that with its underpricing, and – bang – you’ve got a credit bubble, a consequential boom, then a bust. The history of boom and bust is the history of bad fiat money run by bad politicians (usually, but not always, of the left). This exposes Brown’s mendaciousness that the current crisis is a banking crisis. It isn’t. It’s a crisis of unsound fiat money (and catastrophic and related banking supervision errors) that has lead to a banking crisis.

There are good arguments for returning to the gold standard, and unlike Mr Redwood I am not concerned that that would create windfall profits for gold miners and countries with gold fields.

In lots of ways fiat money is like Faith. If we believe in it it will be. And money is power. Not the possession of it, but the control of it. This is the same as Faith. Faiths once sought to control knowledge, for reasons of power. Now secular governments seek to control money for the same reason.

Personally, as I ultimately totally distrust all politicians as eventually they are all corrupted by power (no, that’s unfair – enough are corrupted by power to overwhelm the good ones), I want the control of money taken away from them. And as I also don’t believe in ‘experts’ aka the ‘clever man in Whitehall’ I would rather rest my faith on the wisdom of crowds, that is ‘The Market’. Which is where Gold, its admirable qualities as money and its price comes in.

]]> By: Waramess http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15307 Waramess Fri, 01 May 2009 12:42:07 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15307 "Um, the whole point of a gold standard is that the value of money is defined as a fixed amount of gold." For fixed amount I would suggest you mean fixed quantity. If so I agree but still the value of the pound would fluctuate with the price of a scarce commodity, not given to wild fluctuations other than as a store of value, and with no other use than for jewelrey. Any increase in the gold price would mean an increased demand for sterling and vice versa. Nothing wrong with that when you contrast it with the mess created by politicians and their central banks. Inflation, which is a function of fiat money, robs from the poor who are at the end of the chain whilst governments who create the stuff are the winners. You can see from the depreciation of the pound what sort of personal wealth has been destroyed. As a boy I used to go shopping for my parents and a leg of lamb cost eight bob, now it costs twenty times that. If we had been on the gold standard and the pound was backed by a fixed amount of gold we would have had virtually no inflation. So no. I cannot see your point nor can I see John's point that it might benefit a few gold producers. So what, if it gives us a stable inflation free currency. “Um, the whole point of a gold standard is that the value of money is defined as a fixed amount of gold.”

For fixed amount I would suggest you mean fixed quantity. If so I agree but still the value of the pound would fluctuate with the price of a scarce commodity, not given to wild fluctuations other than as a store of value, and with no other use than for jewelrey.

Any increase in the gold price would mean an increased demand for sterling and vice versa. Nothing wrong with that when you contrast it with the mess created by politicians and their central banks.

Inflation, which is a function of fiat money, robs from the poor who are at the end of the chain whilst governments who create the stuff are the winners. You can see from the depreciation of the pound what sort of personal wealth has been destroyed. As a boy I used to go shopping for my parents and a leg of lamb cost eight bob, now it costs twenty times that. If we had been on the gold standard and the pound was backed by a fixed amount of gold we would have had virtually no inflation.

So no. I cannot see your point nor can I see John’s point that it might benefit a few gold producers. So what, if it gives us a stable inflation free currency.

]]> By: Josh http://johnredwoodsdiary.com/2009/04/30/simple-banking-ignore-base-rates/#comment-15306 Josh Fri, 01 May 2009 10:03:56 +0000 http://www.johnredwoodsdiary.com/?p=3549#comment-15306 Not if they were constrained by some form of gold standard. Fiat money has been a disaster. Some will mess up, but there won't be nobody to bail them out in future. One of the reasons for this mess has been central bank manipulation of the markets. When Brown changed the inflation measure, the BoE had to keep rates down to match the new inflation target. After all, Brown made his name on ''15% interest rates under those dastardly Tories.'' Not if they were constrained by some form of gold standard. Fiat money has been a disaster. Some will mess up, but there won’t be nobody to bail them out in future. One of the reasons for this mess has been central bank manipulation of the markets. When Brown changed the inflation measure, the BoE had to keep rates down to match the new inflation target. After all, Brown made his name on ”15% interest rates under those dastardly Tories.”

]]>