tag:blogger.com,1999:blog-7530776363222965313.post6295374976859920740..comments2023-10-07T13:16:34.756+02:00Comments on Simon Thorpe's Ideas on the Economy: Quantitiative easing is 'laying the seeds for the next crisis'Simon Thorpehttp://www.blogger.com/profile/02605233720415886802noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7530776363222965313.post-81371257865217621472012-03-18T22:05:00.972+01:002012-03-18T22:05:00.972+01:00Hi Simon hope you are well?
My apologies havent ha...Hi Simon hope you are well?<br />My apologies havent had much of a chance to get back to you over the last few weeks on the MMT stuff yes that Wapo is us (that has taken a lot of my time as its really got into the mainstream, so fighting battles all over the place which is great, for me mostly over at the DT, plenty of MMTs on the guardian which i do now & again comment on but too many agree with me there unlike the DT where apparently im some communist! 3 times in 4 days I got called that!)., wrote a long long post and lost it (blamed disqus but to be fair probably had more to do with the bottle of red) had a quick look at your proposal vid and I like, only had time to look at the short version but will find time to look at the longer one.<br /><br />Ok about this post Peter Sands has it wrong, what the central banks have been doing is adding to reserves, which under the old FRB models and the money multiplier effect it would increase the money supply masively but what it misses is banks do not work like that anymore (and in fact positivemoney put up a vid the other day from one the NEF guys which agrees with MMT on these points) so yes you have am expansion in the monatary base but that would not feed though into broad money. <br />What you are missing here is the central bank relationship with treasuries. They are not seperate.<br />I will quote Warren Mosler (and he should know)<br /><br />Reserve accounting uses the standard accounting identities, but the <br />meaning of “liability” is not “debt.” The husband-wife analogy for <br />Central Bank-Treasury accounting relationships is apt. Since a husband <br />and wife are responsible for each others debts, neither can be indebted <br />to the other. That is to say reserve accounting is a fiction that does <br />not represent real relationships,<br /><br />RegardsSimon Thorpehttps://www.blogger.com/profile/02605233720415886802noreply@blogger.com