vimothy
yurp
You think my thought is unsubstantiated?
I never said that.
You think my thought is unsubstantiated?
The institutions that are handed the ability to manufacture currency almost without constraint and based on no concrete wealth have no business attaching interest to it. They can not treat us as an investment risk, they are there to serve our need for an abstract exhange mechanism, if such a thing is necessary at all. The fact that the system is not set up that way should be very telling. I don't know why you insist on supporting it.
What should a bank be then? Just somewhere we deposit and withdraw money? And if this is the case then how would a bank make sufficient money to provide all their branches, cash points and other technology, pay their staff, and make some profit so that their endeavours were worthwhile (startup costs, running costs) etc etc?
Why/how would a bank lend money if there was no guarantee that their loans would be repaid? It is precisely because of the inherent risks involved in lending money that banks have to charge interest...
I'm not talking about Barclays down the high street, I'm talking about banks that issue and regulate currency.
Right... central banks. Anyone know of any good reasons why central banks have to charge interest on the money they issue to governments? There must be stated reasons whether on not they are valid.
Opportunity cost + risk premium
Rising prices is not intrinsic to free-market capitalism. It is a monetary phenomenon caused by increasing money supply. Money, like anything else, is subject to the laws of supply and demand. The more abundant the money, the lower its value.
If the amount of money were to remain constant relative to population, we would see a general decrease in the prices of goods as technologies and transportation efficiencies improved. This would be a boon to consumers.
Ok so if that is the case then, is there a strong argument to be made that indeed central bankers - by increasing and decreasing the amount of money in circulation relative to pop - are fucking the general public over by making them more and more indebted while raking in huge profits?
I'd say so.Ok so if that is the case then, is there a strong argument to be made that indeed central bankers - by increasing and decreasing the amount of money in circulation relative to pop - are fucking the general public over by making them more and more indebted while raking in huge profits?
Obviously they are in a position to manipulate the macro.That's too strong a statement, IMO. The heads of central banks have possibly the most difficult job in finance. I mean, really, who the fuck knows how macro even works? (Limits of knowledge, once again)! And many of them (Bernancke, Greenspan, King, e.g.) are sympathetic to Friedman's monetarism and come from a broadly libertarian stand-point.
EDIT: And in any case, they're independent of the government in all right-thinking states.
Obviously they are in a position to manipulate the macro.