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posted by LaminatorX on Tuesday March 25 2014, @03:25AM   Printer-friendly

Anonymous Coward writes:

"http://www.theguardian.com/commentisfree/2014/mar/ 18/truth-money-iou-bank-of-england-austerity

Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, 'there'd be a revolution before tomorrow morning.'

Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window."

 
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  • (Score: 3, Interesting) by keplr on Tuesday March 25 2014, @04:07AM

    by keplr (2104) on Tuesday March 25 2014, @04:07AM (#20769) Journal

    The worth of a thing is the price it will bring. Economics is doomed to one day be subsumed by psychology. The dismal science indeed.

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  • (Score: 3, Interesting) by Daniel Dvorkin on Tuesday March 25 2014, @09:39AM

    by Daniel Dvorkin (1099) on Tuesday March 25 2014, @09:39AM (#20883) Journal

    The worth of a thing is the price it will bring.

    Price is a proxy for value, and not always a particularly reliable one in the case of volatiles. It's silly to argue that a gallon of gasoline is worth precisely 8.2% more when it's $4.10 a gallon than it was a week ago at $3.78, and will be worth 4.4% less next week at $3.92.

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