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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, Flamebait) by Boxzy on Tuesday March 25 2014, @05:38AM

    by Boxzy (742) on Tuesday March 25 2014, @05:38AM (#20814) Journal

    Dogdammit you idiot, you invented yet another example where there is no choice but to pay. I'll go back to oil. Every country in the world is forced to buy and sell oil in dollars. This isnt a case where there is another market, Iraq tried selling oil in Euros, a week later Mr Bush decided to invade. The US relies on its ownership of the oil trade, this is NOT free trade, this is not economics, this is brute force. Your series of pretty insults are pretty, no doubt of that but seem ugly to any other country.

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  • (Score: 0, Flamebait) by Tork on Tuesday March 25 2014, @05:43AM

    by Tork (3914) Subscriber Badge on Tuesday March 25 2014, @05:43AM (#20817)
    When there's no supply, demand goes up.... and you just proved it. *Sigh* Now I understand why my economics 101 teacher was bald at such an early age.
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  • (Score: 2) by maxwell demon on Tuesday March 25 2014, @09:11AM

    by maxwell demon (1608) on Tuesday March 25 2014, @09:11AM (#20873) Journal

    It is power. Which is also based largely on faith.

    Oh, you think the Iraq war disproves it? Well, there's the old quote from Carl Sandburg, "Sometime they'll give a war and nobody will come." OK, the soldiers did go there. But why? Because they had faith. Either faith in that it was the right thing to do, or faith in that the military system would have the power to punish them if they didn't go. And yes, the second thing, while true, is also based on faith: Namely the faith of those who do the punishing that they may, or even must, punish it.

    All power is based on faith. If nobody believed Obama would have any power, Obama would not have any power, regardless of the results of the last elections, or of what the constitution says. People would just ignore him, and there would be little he could do about it.

    And since money is ultimately a form of power, it is not really a surprise that money is also based on faith.

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