The Bank of England’s paper on money creation, and a reply to David Graeber

Printed money

That David Graeber was not happy with my previous blog did not surprise me. Yet, his reply gave me cause to pause and to reflect. Had I missed something? Had I misunderstood the point he made in his Guardian comment? Here is again Graeber’s response to my blog: “I don’t see why anyone should take you seriously as an ecomomist (sic) if you haven’t even figured out the point of the essay was not a “discovery” of fractional reserve banking but exactly the opposite: that the fractional reserve / money multiplier explanation of … [Read more...]

What is wrong about the euro, and what is not

Photo of Angela Merkel

Every Monday morning the readers of the UK’s Daily Telegraph are treated to a sermon on the benefits of Keynesian stimulus economics, the dangers of belt-tightening and the unnecessary cruelty of ‘austerity’ imposed on Europe by the evil Hun. To this effect, the newspaper gives a whole page in its ‘Business’ section to Roger Bootle and Ambrose Evans-Pritchard, who explain that growth comes from government deficits and from the central bank printing money, and why can’t those stupid Europeans get it? The reader is left with … [Read more...]

We are on the road to serfdom

Road

We are now five years into the Great Fiat Money Endgame and our freedom is increasingly under attack from the state, liberty’s eternal enemy. It is true that by any realistic measure most states today are heading for bankruptcy. But it would be wrong to assume that ‘austerity’ policies must now lead to a diminishing of government influence and a shrinking of state power. The opposite is true: The state asserts itself more forcefully in the economy, and the political class feels licensed by the crisis to abandon whatever … [Read more...]

Europe’s voters say ‘No’ to economic reality

Balls of euro banknotes

"Europe fights back against austerity" was how The Daily Telegraph headlined its weekend election coverage. "Anti-austerity movements are gathering pace across Europe following political earthquakes in France and Greece. A total of 12 European governments have now been dismissed in three years." As the European welfare state is officially in its death-throes none of us should be surprised if political strife gets cranked up to eleven. I firmly expect that we will see much more of this in the future. While I can understand … [Read more...]