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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: 1) by Tork on Tuesday March 25 2014, @04:16AM

    by Tork (3914) Subscriber Badge on Tuesday March 25 2014, @04:16AM (#20778)
    They're not. Value is value, money is a way of expressing it. He wasn't actually talking about money, he was trying to save face after demonstrating his lack of understanding of the very first principle they teach you in economics 101.
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  • (Score: 2) by Boxzy on Tuesday March 25 2014, @04:29AM

    by Boxzy (742) on Tuesday March 25 2014, @04:29AM (#20785) Journal

    Value is most definitely value. When money collapses, food, building materials, fertilizer, many things remain of value. MONEY DOES NOT. the two are lightyears apart.

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    • (Score: 2) by Tork on Tuesday March 25 2014, @04:30AM

      by Tork (3914) Subscriber Badge on Tuesday March 25 2014, @04:30AM (#20786)
      Nope, that's still supply and demand. It's all tied together.
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    • (Score: 1) by SleazyRidr on Tuesday March 25 2014, @02:57PM

      by SleazyRidr (882) on Tuesday March 25 2014, @02:57PM (#20976)

      What about when someone comes up with a better fertilizer and the price of fertilizer collapses?

      • (Score: 1) by Boxzy on Tuesday March 25 2014, @03:16PM

        by Boxzy (742) on Tuesday March 25 2014, @03:16PM (#20989) Journal

        You are comparing replacement of one product with another product with lack of belief in an intangible faith? Let me rephrase your statement. "what happens to scientists when someone comes up with better science? Do they suddenly believe in god?" Makes no sense.

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        • (Score: 2) by SleazyRidr on Tuesday March 25 2014, @07:21PM

          by SleazyRidr (882) on Tuesday March 25 2014, @07:21PM (#21133)

          I have no idea from where you pulled conjectures about the belief in God. I was making the point that the "real" assets you mentioned are also subject to price fluctuations, albeit to a more limited extent than money, owing to their more limited application.