tag:blogger.com,1999:blog-7530776363222965313.post3674662185531387091..comments2023-10-07T13:16:34.756+02:00Comments on Simon Thorpe's Ideas on the Economy: How long has this been going on? Simon Thorpehttp://www.blogger.com/profile/02605233720415886802noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7530776363222965313.post-28187826059108211782013-02-19T15:06:24.100+01:002013-02-19T15:06:24.100+01:00Hi again,
So - we agree! Good to hear it. The ...Hi again, <br /><br /><br /><br />So - we agree! Good to hear it. The Modernising Money book is really very impressive, and makes these points beautifully. But, in addition, they propose a well-thought out way of getting out of the mess. I can't wait to hear someone from the Banks trying to justify the current system - quite simply impossible in my opinion.Simon Thorpehttps://www.blogger.com/profile/02605233720415886802noreply@blogger.comtag:blogger.com,1999:blog-7530776363222965313.post-87424258834339851922013-02-18T15:40:59.897+01:002013-02-18T15:40:59.897+01:00I agree that banks do create money 'out of thi...I agree that banks do create money 'out of thin air'. What I meant by 'inaccurate' is that fractional reserve banking is not a good description of how banks actually operate because it implies that banks need deposits before they start making loans and that the fractional reserve process and the multiplier then go into operation. Actually, what you are saying is 100% correct and I agree. It is the post-Keynesian view of banking (and the view of Keynes in his Treatise on Money) and it appears to be entirely consistent with bankers' views. Congratulations on the work in Positive Money. Will write about it tomorrow in La Jornada. (I'm an economist at El Colegio de Mexico, where I teach comparative economic theory).Simon Thorpehttps://www.blogger.com/profile/02605233720415886802noreply@blogger.comtag:blogger.com,1999:blog-7530776363222965313.post-83267220263554297992013-02-18T09:30:46.670+01:002013-02-18T09:30:46.670+01:00Well, I've nearly finished Modernising Money (...Well, I've nearly finished Modernising Money (by the Positive Money group) and it seems to be clearly the case that banks really do create money.... and they justify that by the fractional reserve banking mechanism. Why is that inaccurate?<br /><br /><br />SimonSimon Thorpehttps://www.blogger.com/profile/02605233720415886802noreply@blogger.com